House of Commons Amendments

Session 2014 - 15
Internet Publications
Other Bills before Parliament

Public Bill Committee:
52

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(a)
a reference to being nominated in relation to the scheme,

(b)
a reference to being nominated in relation to arrangements

that include the arrangement,

(c)
a reference to being nominated in relation to the

arrangement, and

(d)
a reference to being nominated in relation to benefits that

include the particular benefits.

Nominees’ drawdown pension

27B
“Nominees’ drawdown pension” means—

(a)
a nominees’ short-term annuity, or

(b)
nominees’ income withdrawal.

Nominees’ short-term annuity

27C(1)
For the purposes of this Part an annuity payable to a nominee is a

nominees’ short-term annuity if—

(a)
it is purchased by the application of sums or assets

representing the whole or any part of the nominee’s flexi-

access drawdown fund in respect of an arrangement,

(b)
it is payable by an insurance company,

(c)
the nominee becomes entitled to it on or after 6 April 2015,

and

(d)
it is payable for a term which does not exceed five years

and ends before the nominee dies.

      (2)
The Commissioners for Her Majesty’s Revenue and Customs may

by regulations make provision in relation to cases in which a

nominees’ short-term annuity payable to a person (“the original

nominees’ short-term annuity”) ceases to be payable and in

consequence of that—

(a)
sums or assets (or both) are transferred from the insurance

company to another insurance company and are applied—

(i)
towards the provision of another nominees’ short-

term annuity (a “new nominees’ short-term

annuity”) by the other insurance company, or

(ii)
otherwise, or

(b)
sums or assets are transferred to the relevant registered

pension scheme.

      (3)
The regulations may provide that—

(a)
in a case where a new nominees’ short-term annuity

becomes payable, the new nominees’ short-term annuity is

to be treated, to such extent as is prescribed by the

regulations and for such of the purposes of this Part as are

so prescribed, as if it were the original nominees’ short-

term annuity, and

(b)
in any other case, the relevant registered pension scheme is

to be treated as making an unauthorised payment in respect

of the member of an amount equal to the aggregate of the

sums, and the market value of the assets, transferred.

Public Bill Committee:
53

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      (4)
For the purposes of sub-paragraphs (2) and (3) a registered pension

scheme is the relevant registered pension scheme if the original

nominees’ short-term annuity was acquired using sums or assets

held for the purposes of the pension scheme.

Nominees’ income withdrawal

27D
“Nominees’ income withdrawal” means an amount (other than an

annuity) which the nominee is entitled to be paid from the

nominee’s flexi-access drawdown fund in respect of an

arrangement.

Nominee’s flexi-access drawdown fund

27E(1)
For the purposes of this Part a nominee’s flexi-access drawdown

fund in respect of an arrangement consists of such of the sums or

assets held for the purposes of the arrangement as are newly-

designated nominee funds.

      (2)
For the purposes of this Part sums or assets held for the purposes of

an arrangement are newly-designated nominee funds if—

(a)
they—

(i)
have, at any time on or after 6 April 2015, been

designated under the arrangement as available for

the payment of nominees’ drawdown pension, and

(ii)
were, immediately before being so designated,

unused drawdown funds or unused uncrystallised

funds, or

(b)
they arise, or (directly or indirectly) derive, from newly-

designated nominee funds under paragraph (a) or from

sums or assets which so arise or derive.

      (3)
Sums or assets held for the purposes of an arrangement after the

member’s death are unused drawdown funds if—

(a)
immediately before the member’s death, they were held for

the purposes of the arrangement and represented (whether

alone or with other sums or assets) the member’s flexi-

access drawdown fund, or drawdown pension fund, in

respect of the arrangement, or

(b)
they arise, or (directly or indirectly) derive, from unused

drawdown funds under paragraph (a) or from sums or

assets which so arise or derive.

      (4)
In the case of a cash balance arrangement, sums or assets held for

the purposes of the arrangement after the member’s death are

unused uncrystallised funds if—

(a)
they represent the whole or any part of the sum that would

have been available immediately before the member’s

death for the provision of benefits to or in respect of the

member if entitlement had arisen immediately before the

member’s death to all benefits under the arrangement to

which entitlement had not previously arisen, and

(b)
since the member’s death they have not been designated as

available for the payment of dependants’ drawdown

pension, not been designated as available for the payment

Public Bill Committee:
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of nominees’ drawdown pension, not been applied towards

the provision of a dependants’ annuity and not been applied

towards the provision of a dependants’ scheme pension.

      (5)
In the case of any other money purchase arrangement, sums or

assets held for the purposes of the arrangement after the member’s

death are unused uncrystallised funds if—

(a)
immediately before the member’s death they were held for

the purposes of the arrangement and at that time—

(i)
were not member-designated funds,

(ii)
were not newly-designated funds,

(iii)
had not been applied towards the provision of a

scheme pension, and

(iv)
had not been applied towards the provision of a

dependants’ scheme pension, or

(b)
they arise, or (directly or indirectly) derive, from unused

uncrystallised funds under paragraph (a) or from sums or

assets which so arise or derive,


and since the member’s death they have not been designated as

available for the payment of dependants’ drawdown pension, not

been designated as available for the payment of nominees’

drawdown pension, not been applied toward the provision of a

dependants’ annuity and not been applied toward the provision of a

dependants’ scheme pension.

Meaning of “successor”

27F(1)
“Successor of the member” means an individual—

(a)
nominated by a dependant of the member,

(b)
nominated by a nominee of the member,

(c)
nominated by a successor of the member, or

(d)
nominated by the scheme administrator,


but see sub-paragraph (2).

      (2)
In relation to any particular benefits under an arrangement relating

to a dependant, nominee or successor of the member (“the

beneficiary”) in that capacity, no individual nominated by the

scheme administrator counts as a successor of the member at any

time after the beneficiary’s death when there is an individual, or

charity, nominated by the beneficiary in relation to the benefits.

      (3)
A reference in sub-paragraph (2) to being nominated in relation to

particular benefits under an arrangement includes—

(a)
a reference to being nominated in relation to the scheme,

(b)
a reference to being nominated in relation to arrangements

that include the arrangement,

(c)
a reference to being nominated in relation to the

arrangement, and

(d)
a reference to being nominated in relation to benefits that

include the particular benefits.

      (4)
Where a successor of the member is an individual who is also a

dependant of the member, the individual in the capacity of a

Public Bill Committee:
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successor of the member is to be treated as not also being a

dependant of the member.

Successors’ drawdown pension

27G
“Successors’ drawdown pension” means—

(a)
a successors’ short-term annuity, or

(b)
successors’ income withdrawal.

Successors’ short-term annuity

27H(1)
For the purposes of this Part an annuity payable to a successor is a

successors’ short-term annuity if—

(a)
it is purchased by the application of sums or assets

representing the whole or any part of the successor’s flexi-

access drawdown fund in respect of an arrangement,

(b)
it is payable by an insurance company,

(c)
the successor becomes entitled to it on or after 6 April

2015, and

(d)
it is payable for a term which does not exceed five years

and ends before the successor dies.

      (2)
The Commissioners for Her Majesty’s Revenue and Customs may

by regulations make provision in relation to cases in which a

successors’ short-term annuity payable to a person (“the original

successors’ short-term annuity”) ceases to be payable and in

consequence of that—

(a)
sums or assets (or both) are transferred from the insurance

company to another insurance company and are applied—

(i)
towards the provision of another successors’ short-

term annuity (a “new successors’ short-term

annuity”) by the other insurance company, or

(ii)
otherwise, or

(b)
sums or assets are transferred to the relevant registered

pension scheme.

      (3)
The regulations may provide that—

(a)
in a case where a new successors’ short-term annuity

becomes payable, the new successors’ short-term annuity

is to be treated, to such extent as is prescribed by the

regulations and for such of the purposes of this Part as are

so prescribed, as if it were the original successors’ short-

term annuity, and

(b)
in any other case, the relevant registered pension scheme is

to be treated as making an unauthorised payment in respect

of the member of an amount equal to the aggregate of the

sums, and the market value of the assets, transferred.

      (4)
For the purposes of sub-paragraphs (2) and (3) a registered pension

scheme is the relevant registered pension scheme if the original

successors’ short-term annuity was acquired using sums or assets

held for the purposes of the pension scheme.

Public Bill Committee:
56

, continued

Successors’ income withdrawal

27J
“Successors’ income withdrawal” means an amount (other than an

annuity) which the successor is entitled to be paid from the

successor’s flexi-access drawdown fund in respect of an

arrangement.

Successor’s flexi-access drawdown fund

27K(1)
For the purposes of this Part a successor’s flexi-access drawdown

fund in respect of an arrangement consists of such of the sums or

assets held for the purposes of the arrangement as are newly-

designated successor funds.

      (2)
For the purposes of this Part sums or assets held for the purposes of

an arrangement are newly-designated successor funds if—

(a)
they—

(i)
have, at any time on or after 6 April 2015, been

designated under the arrangement as available for

the payment of successors’ drawdown pension,

and

(ii)
were, immediately before being so designated,

unused drawdown funds of the same deceased

dependant, nominee or successor of the member,

or

(b)
they arise, or (directly or indirectly) derive, from newly-

designated successor funds under paragraph (a) or from

sums or assets which so arise or derive.

      (3)
Sums or assets held for the purposes of an arrangement after the

death of a dependant, nominee or successor (“the beneficiary”) are

unused drawdown funds of the beneficiary’s if—

(a)
immediately before the beneficiary’s death, they were held

for the purposes of the arrangement and represented

(whether alone or with other sums or assets) the

beneficiary’s—

(i)
dependant’s flexi-access drawdown fund,

(ii)
dependant’s drawdown pension fund,

(iii)
nominee’s flexi-access drawdown fund, or

(iv)
successor’s flexi-access drawdown fund,


in respect of the arrangement, or

(b)
they arise, or (directly or indirectly) derive, from unused

drawdown funds of the beneficiary’s under paragraph (a) or

from sums or assets which so arise or derive.”

      (2)
The provisions inserted by sub-paragraph (1) have effect even in relation to

cases where the member concerned, or any dependant concerned, dies before

6 April 2015.

Nominees and successors: further drawdown amendments

4
In section 169(1D) (regulations about transfers of drawdown funds) after

paragraph (aa) (which is inserted by this Act) insert “or

(ab)
a nominee’s flexi-access drawdown fund, or

(ac)
a successor’s flexi-access drawdown fund,”.

Public Bill Committee:
57

, continued

5
In section 172(1)(a) (assignment of rights or benefits) after “dependant” insert

“, nominee or successor”.

6
In section 172A(1)(a) (surrender of rights or benefits) after “dependant” insert

“, nominee or successor”.

7
In section 172A(5) (exceptions to provisions on surrender: entitlement to

benefits)—

(a)
in paragraph (b) after “dependant” insert “, or nominee,”,

(b)
after paragraph (b) insert—

“(ba)
a surrender (or agreement to surrender) by a

dependant, nominee or successor of the member (“the

beneficiary”) in return for the conferring, on a

successor of the member, of an entitlement to benefits

after the beneficiary’s death,”, and

(c)
in paragraph (c) for “or dependant” substitute “, dependant, nominee

or successor”.

8
In section 172A(5A) (further provision on surrender exceptions)—

(a)
after “dependant”, in the first place it occurs, insert “, or nominee,”,

and

(b)
after “dependant”, in the second place it occurs, insert “or nominee”.

9
In section 172A after subsection (5A) insert—

“(5B)
Subsection (5)(ba) applies only if the entitlement is held (or is to be

held) by the successor under an arrangement under the pension

scheme relating to the beneficiary or successor.”

10
In section 172A(7) (exceptions to provisions on surrender: prospective

entitlements)—

(a)
in the opening words after “dependant” insert “or nominee or

successor”, and

(b)
in paragraph (a) after “dependant” insert “, or nominee or successor,”.

11
In section 172B(2) (rights of a “relevant member”)—

(a)
in paragraph (a) after “dependant” insert “or nominee or successor”,

and

(b)
after paragraph (aa) insert—

“(ab)
rights representing the nominee’s flexi-access

drawdown fund or successor’s flexi-access

drawdown fund in respect of an arrangement under

the pension scheme,”.

12
In section 172B(7A) (section does not apply to certain increases in rights)

before “dependant’s drawdown pension fund” (in both places) insert

“nominee’s flexi-access drawdown fund, successor’s flexi-access drawdown

fund,”.

13
In section 182(3) (value of arrangement for purposes of borrowing limits) after

paragraph (b) insert—

“(ba)
the amount of such of the sums and the market value of such

of the assets as represent nominees’ flexi-access drawdown

funds in respect of the arrangement (if any),

(bb)
the amount of such of the sums and the market value of such

of the assets as represent successors’ flexi-access drawdown

funds in respect of the arrangement (if any),”.

Public Bill Committee:
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, continued

14
In section 280(2) (index of defined expressions) at the appropriate places

insert—

“dependant (of a member of a
paragraph 15 of Schedule 28”

registered pension scheme)

“nominee (of a member of a
paragraph 27A of Schedule 28”

registered pension scheme)

“nominees’ drawdown pension
paragraph 27B of Schedule 28”

“nominee’s flexi-access drawdown
paragraph 27E of Schedule 28”

fund

“nominees’ income withdrawal
paragraph 27D of Schedule 28”

“nominees’ short-term annuity
paragraph 27C of Schedule 28”

“successor (of a member of a
paragraph 27F of Schedule 28”

registered pension scheme)

“successors’ drawdown pension
paragraph 27G of Schedule 28”

“successor’s flexi-access
paragraph 27K of Schedule 28”

drawdown fund

“successors’ income withdrawal
paragraph 27J of Schedule 28”

“successors’ short-term annuity
paragraph 27H of Schedule 28”

Nomination of charities by nominees and successors of deceased scheme members

15  (1)
Paragraph 18 of Schedule 29 (charity lump sum death benefit) is amended as

follows.

      (2)
After sub-paragraph (2) insert—

  “(2A)
A lump sum death benefit is also a charity lump sum death benefit

if—

(a)
it is paid on the death of an individual who is—

(i)
a nominee of the member, or

(ii)
a successor of the member,

(b)
there are no dependants of the member,

(c)
it is paid in respect of the individual’s nominee’s flexi-

access drawdown fund or successor’s flexi-access

drawdown fund at the date of the individual’s death in

respect of an arrangement relating to the individual in the

capacity of a nominee or successor of the member, and

(d)
it is paid to a charity nominated by the member or, if the

member made no nomination, by the individual.”

      (3)
In sub-paragraph (3) (cases where lump sum exceeds the permitted maximum)

for “or (2)” substitute “, (2) or (2A)”.

      (4)
In sub-paragraph (4) (meaning of “permitted maximum”) after “arrangement”

insert “, or the nominee’s or successor’s flexi-access drawdown fund in respect

of the arrangement,”.



© Parliamentary copyright	Revised 11 November 2014