Session 2014 - 15
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Notices of Amendments:                               

1009

 

, continued

 
 

Secretary Iain Duncan Smith

 

NC22

 

To move the following Clause

 

         

“Restrictions on conversion of benefits during winding up etc: Northern

 

Ireland

 

(1)    

In Article 73A of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213

 

(N.I. 22)) (operation of scheme during winding up period), after paragraph (6)

 

insert—

 

“(6A)    

During the winding up period no right or entitlement of any member, or

 

of any other person in respect of a member, to a benefit that is not a

 

money purchase benefit is to be converted into, or replaced with, a right

 

or entitlement to a money purchase benefit under the scheme rules.”

 

(2)    

In Article 73B of that Order (Articles 73 and 73A: supplementary), in paragraphs

 

(1) and (3), after “Article 73A(3)” insert “or (6A)”.

 

(3)    

In Article 119 of the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255

 

(N.I. 1)) (restrictions on winding up, discharge of liabilities etc during assessment

 

period), in paragraph (4), before sub-paragraph (a) insert—

 

“(za)    

no right or entitlement of any member, or of any other person in

 

respect of a member, to a benefit that is not a money purchase

 

benefit is to be converted into, or replaced with, a right or

 

entitlement to a money purchase benefit under the scheme

 

rules,”.”

 

Member’s explanatory statement

 

Where an occupational pension scheme is winding up or being assessed for transfer into the

 

Pension Protection Fund, this amendment prevents any right under the scheme to a benefit which

 

is not a money purchase benefit being converted into a money purchase benefit.

 


 

Secretary Iain Duncan Smith

 

NC23

 

To move the following Clause

 

         

“Restriction on payment of lump sums during PPF assessment period:

 

Northern Ireland

 

(1)    

Article 122 of the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255

 

(N.I. 1)) (payment of scheme benefits during assessment period) is amended as

 

follows.

 

(2)    

In paragraph (1), after “Paragraphs (2)” insert “, (2A)”.

 

(3)    

After paragraph (2) insert—

 

“(2A)    

Benefits in the form of a lump sum may be paid to or in respect of a

 

member under the scheme rules during the assessment period only in the

 

circumstances in which, and to the extent to which, lump sum

 

compensation would be payable to or in respect of the member in

 

accordance with this Chapter if—

 

(a)    

the Board assumed responsibility for the scheme in accordance

 

with this Chapter, and

 

(b)    

the assessment date referred to in Schedule 6 were the date on

 

which the assessment period began.”


 
 

Notices of Amendments:                               

1010

 

, continued

 
 

(4)    

In paragraph (3), omit “But”.

 

(5)    

In paragraph (5), for “paragraph (2)” substitute “paragraphs (2) and (2A)”.

 

(6)    

In paragraph (6), for “paragraph (3)” substitute “paragraphs (2A) and (3)”.

 

(7)    

In paragraph (7), after “Paragraphs (2),” insert “(2A),”.

 

(8)    

In paragraph (8), after “paragraphs (2)” insert “, (2A)”.

 

(9)    

In paragraph (9), for “paragraphs (2) and (3)” substitute “paragraphs (2) to (3)”.

 

(10)    

After paragraph (9) insert—

 

“(9A)    

Regulations may make provision as to circumstances in which benefits in

 

the form of a lump sum are to be treated for the purposes of paragraph

 

(2A) as being paid in the circumstances in which lump sum compensation

 

would be payable in accordance with this Chapter.

 

(9B)    

Regulations may create exceptions to paragraph (2A).”

 

(11)    

In paragraph (12), for “paragraph (2)” substitute “paragraphs (2) and (2A)”.

 

(12)    

In paragraph (13), after “paragraph (2)” insert “, (2A)”.”

 

Member’s explanatory statement

 

This clarifies restrictions on the payment of benefits by an occupational pension scheme which is

 

being assessed for transfer into the Pension Protection Fund. It specifies the types of lump sums

 

that can be paid, and includes a power to make further provision in relation to particular

 

circumstances.

 


 

Secretary Iain Duncan Smith

 

NC24

 

To move the following Clause

 

         

“Rights to transfer benefits

 

Schedule (Rights to transfer benefits) contains amendments that confer new

 

statutory rights to transfer benefits.”

 

Member’s explanatory statement

 

This introduces a new Schedule which makes changes to the right a member has to transfer their

 

pension savings prior to accessing those savings.

 


 

Secretary Iain Duncan Smith

 

NC25

 

To move the following Clause

 

         

“Restriction on transfers out of public service defined benefits schemes: Great

 

Britain

 

(1)    

The Pension Schemes Act 1993 is amended as follows.

 

(2)    

In section 95 (ways of taking right to cash equivalent), in subsection (2), after

 

“occupational pension scheme” insert “that is not an unfunded public service

 

defined benefits scheme”.


 
 

Notices of Amendments:                               

1011

 

, continued

 
 

(3)    

In section 95, after subsection (2) insert—

 

“(2A)    

In the case of a member of an occupational pension scheme that is an

 

unfunded public service defined benefits scheme, the ways referred to in

 

subsection (1) are—

 

(a)    

for acquiring transfer credits allowed under the rules of another

 

occupational pension scheme if—

 

(i)    

the benefits that may be provided under the other

 

scheme by virtue of the transfer credits are not flexible

 

benefits,

 

(ii)    

the trustees or managers of the other scheme are able and

 

willing to accept payment in respect of the member’s

 

transferrable rights, and

 

(iii)    

the other scheme satisfies requirements prescribed in

 

regulations made by the Secretary of State or the

 

Treasury;

 

(b)    

for acquiring rights allowed under the rules of a personal pension

 

scheme if—

 

(i)    

the benefits that may be provided under the personal

 

pension scheme by virtue of the acquired rights are not

 

flexible benefits,

 

(ii)    

the trustees or managers of the personal pension scheme

 

are able and willing to accept payment in respect of the

 

member’s transferrable rights, and

 

(iii)    

the personal pension scheme satisfies requirements

 

prescribed in regulations made by the Secretary of State

 

or the Treasury;

 

(c)    

for purchasing from one or more insurers such as are mentioned

 

in section 19(4)(a), chosen by the member and willing to accept

 

payment on account of the member from the trustees or

 

managers, one or more annuities which satisfy requirements

 

prescribed in regulations made by the Secretary of State or the

 

Treasury;

 

(d)    

for subscribing to other pension arrangements which satisfy

 

requirements prescribed in regulations made by the Secretary of

 

State or the Treasury.

 

(2B)    

The Treasury may by regulations provide for sub-paragraph (i) of

 

subsection (2A)(a) or (b) not to apply in prescribed circumstances or in

 

relation to prescribed schemes or schemes of a prescribed description.

 

(2C)    

In subsection (2A) “unfunded public service defined benefits scheme”

 

means a public service pension scheme that—

 

(a)    

is a defined benefits scheme within the meaning given by section

 

37 of the Public Service Pensions Act 2013, and

 

(b)    

meets some or all of its liabilities otherwise than out of a fund

 

accumulated for the purpose during the life of the scheme.”

 

(4)    

In section 95(5)(a), for “subsection (2) is” substitute “subsections (2) and (2A)

 

are”.

 

(5)    

In section 95(6)—

 

(a)    

after “subsections (2)” insert “, (2A)”;

 

(b)    

after “subsection (2)” insert “or (2A)”.

 

(6)    

In section 96 (further provisions concerning exercise of option under section 95),

 

in subsection (2)(b), after “subsection (2)” insert “, subsection (2A)”.


 
 

Notices of Amendments:                               

1012

 

, continued

 
 

(7)    

In section 100 (withdrawal of applications), in subsection (2), after “subsection

 

(2)” insert “, subsection (2A)”.

 

(8)    

The amendments made by this section have no effect in relation to an application

 

made under section 95(1) of the Pension Schemes Act 1993 before 6 April 2015.

 

(9)    

Until the coming into force of the first regulations made under a provision of

 

section 95(2A) of the Pension Schemes Act 1993 specified in the first column of

 

the table, regulations made under the provision of section 95(2) of that Act

 

specified in the corresponding entry in the second column apply (with any

 

necessary modifications) for the purposes of the provision specified in the first

 

column—

 

Provision of section 95(2A)

Provision of section 95(2)

 
 

Paragraph (a)(iii)

Paragraph (a)(ii)

 
 

Paragraph (b)(iii)

Paragraph (b)(ii)

 
 

Paragraph (c)

Paragraph (c)

 
 

Paragraph (d)

Paragraph (d).”

 
 

Member’s explanatory statement

 

This amendment restricts the right under the Pension Schemes Act 1993 to transfer from one

 

pension scheme to another, so as to prevent a member of an unfunded public service defined

 

benefits scheme using that right to transfer to another pension scheme in which they can obtain

 

flexible benefits.

 


 

Secretary Iain Duncan Smith

 

NC26

 

To move the following Clause

 

         

“Reduction of cash equivalents: funded public service defined benefits

 

schemes: Great Britain

 

(1)    

The Pension Schemes Act 1993 is amended as follows.

 

(2)    

In section 97 (calculation of cash equivalents), in subsection (1)—

 

(a)    

after “verified” insert “—

 

(a)    

”;

 

(b)    

at the end insert “, and

 

(b)    

where a designation has been made under section 97A or

 

97B, in accordance with regulations under section 97C.”

 

(3)    

After section 97 insert—

 

“97A  

Designation of funded public service defined benefits schemes

 

(1)    

This section applies to funded public service defined benefits schemes

 

other than schemes to which section 97B applies (equivalent provision

 

for certain Scottish schemes).

 

    

A scheme to which this section applies is referred to below as an “eligible

 

scheme”.


 
 

Notices of Amendments:                               

1013

 

, continued

 
 

(2)    

The relevant person may designate an eligible scheme as a scheme to

 

which regulations under section 97C are to apply for a specified period

 

of no more than 2 years.

 

(3)    

The power under subsection (2) may be exercised only if the relevant

 

person considers that—

 

(a)    

there is an increased likelihood of payments out of public funds,

 

or increased payments out of public funds, having to be made

 

into the scheme so that it can meet its liabilities, and

 

(b)    

the increased likelihood is connected with the exercise or

 

expected future exercise of rights to take a cash equivalent

 

acquired under section 94.

 

(4)    

The power under subsection (2) may be exercised in relation to the whole

 

or any part of a scheme.

 

(5)    

In the application of subsection (3) to part of a scheme, paragraph (a) is

 

to be read as if it referred to the scheme’s liabilities relating to that part.

 

(6)    

A designation under subsection (2)—

 

(a)    

may be extended (on more than one occasion) for a period of no

 

more than 2 years;

 

(b)    

may be revoked.

 

(7)    

The relevant person must give notice in writing of a designation or its

 

extension or revocation to the trustees or managers of the scheme (except

 

in a case where the relevant person is the trustees or managers).

 

(8)    

If the trustees or managers of an eligible scheme, or part of such a

 

scheme, which is not designated under this section consider that the

 

conditions in paragraphs (a) and (b) of subsection (3) are met in relation

 

to the scheme or part they must notify—

 

(a)    

the Treasury, and

 

(b)    

(where relevant) each Minister of the Crown by whom, or with

 

whose approval, the scheme was established.

 

(9)    

If the trustees or managers of a scheme, or part of a scheme, which is

 

designated under this section consider that the conditions in paragraphs

 

(a) and (b) of subsection (3) are no longer met in relation to the scheme

 

or part they must notify—

 

(a)    

the Treasury, and

 

(b)    

(where relevant) each Minister of the Crown by whom, or with

 

whose approval, the scheme was established.

 

(10)    

In this section—

 

“eligible scheme” has the meaning given by subsection (1);

 

“funded public service defined benefits scheme” means a public service

 

pension scheme that—

 

(c)    

is a defined benefits scheme within the meaning given by section

 

37 of the Public Service Pensions Act 2013, and

 

(d)    

meets its liabilities out of a fund accumulated for the purpose

 

during the life of the scheme;

 

“local authority” means—

 

(e)    

a county or district council in England,

 

(f)    

a county or county borough council in Wales,

 

(g)    

a London borough council,


 
 

Notices of Amendments:                               

1014

 

, continued

 
 

(h)    

the Greater London Authority,

 

(i)    

the Common Council of the City of London in its capacity as a

 

local authority, or

 

(j)    

the Council of the Isles of Scilly;

 

“payment out of public funds” means a payment provided directly or

 

indirectly—

 

(k)    

out of—

 

(i)    

the Consolidated Fund or any other account or

 

source of money which cannot be drawn or

 

spent other than by, or with the authority of, the

 

Treasury, or

 

(ii)    

the Welsh Consolidated Fund, or

 

(l)    

by a local authority;

 

“the relevant person” means—

 

(m)    

in relation to a scheme established by virtue of paragraph 12 of

 

Schedule 6 to the Constitutional Reform and Governance Act

 

2010 (or treated as so established), the Independent

 

Parliamentary Standards Authority and the trustees of the

 

Parliamentary Contributory Pension Fund;

 

(n)    

in relation to a scheme established by virtue of paragraph 16 of

 

Schedule 6 to the Constitutional Reform and Governance Act

 

2010 (or treated as so established), the trustees of the

 

Parliamentary Contributory Pension Fund;

 

(o)    

in any other case, either of the following—

 

(i)    

the Treasury, or

 

(ii)    

any Minister of the Crown by whom, or with

 

whose approval, the scheme was established.

 

(11)    

The Treasury may by regulations modify the definitions of “local

 

authority” and “the relevant person” in subsection (10).

 

97B    

Designation of funded public service defined benefits schemes:

 

Scotland

 

(1)    

This section applies to a funded public service defined benefits scheme

 

that is—

 

(a)    

a scheme established by, or with the approval of, the Scottish

 

Ministers;

 

(b)    

a scheme established by virtue of sections 73 and 74 of the

 

Transport Act 1962 the liabilities in respect of which were

 

transferred to the Scottish Transport Group by paragraph (c) of

 

section 28(2) of the Transport Act 1968 in so far as that

 

paragraph related to liabilities regarding the securities of David

 

MacBrayne Limited or the Caledonian Steam Packet Company

 

Limited);

 

(c)    

a scheme established by virtue of paragraph 3 of Schedule 3 to

 

the Scottish Development Agency Act 1975;

 

(d)    

a scheme established by virtue of paragraph 15(2) of Schedule 1

 

to the Enterprise and New Towns (Scotland) Act 1990 (read with

 

paragraph 7 of Schedule 3 to that Act);

 

(e)    

a scheme established by virtue of section 81(4)(b) of, or

 

paragraph 3(4)(b) of Schedule 2 to, the Scotland Act 1998.

 

    

A scheme to which this section applies is referred to below as an “eligible

 

scheme”.


 
 

Notices of Amendments:                               

1015

 

, continued

 
 

(2)    

The relevant person may designate an eligible scheme as a scheme to

 

which regulations under section 97C are to apply for a specified period

 

of no more than 2 years.

 

(3)    

The power under subsection (2) may be exercised only if the relevant

 

person considers that—

 

(a)    

there is an increased likelihood of payments out of public funds,

 

or increased payments out of public funds, having to be made

 

into the scheme so that it can meet its liabilities, and

 

(b)    

the increased likelihood is connected with the exercise or

 

expected future exercise of rights to take a cash equivalent

 

acquired under section 94.

 

(4)    

The power under subsection (2) may be exercised in relation to the whole

 

or any part of a scheme.

 

(5)    

In the application of subsection (3) to part of a scheme, paragraph (a) is

 

to be read as if it referred to the scheme’s liabilities relating to that part.

 

(6)    

A designation under subsection (2)—

 

(a)    

may be extended (on more than one occasion) for a period of no

 

more than 2 years;

 

(b)    

may be revoked.

 

(7)    

The relevant person must give notice in writing of a designation or its

 

extension or revocation to the trustees or managers of the scheme (except

 

in a case where the relevant person is the trustees or managers).

 

(8)    

If the trustees or managers of an eligible scheme, or part of such a

 

scheme, which is not designated under this section consider that the

 

conditions in paragraphs (a) and (b) of subsection (3) are met in relation

 

to the scheme or part they must notify the Scottish Ministers.

 

(9)    

If the trustees or managers of a scheme, or part of a scheme, that is

 

designated under this section consider that the conditions in paragraphs

 

(a) and (b) of subsection (3) are no longer met in relation to the scheme

 

or part they must notify the Scottish Ministers.

 

(10)    

In this section—

 

“eligible scheme” has the meaning given by subsection (1);

 

“funded public service defined benefits scheme” means a public service

 

pension scheme that—

 

(p)    

is a defined benefits scheme within the meaning given by section

 

37 of the Public Service Pensions Act 2013, and

 

(q)    

meets its liabilities out of a fund accumulated for the purpose

 

during the life of the scheme;

 

“payment out of public funds” means a payment provided directly or

 

indirectly—

 

(r)    

out of the Scottish Consolidated Fund, or

 

(s)    

by a council constituted under section 2 of the Local Government

 

etc. (Scotland) Act 1994;

 

“the relevant person” means—

 

(t)    

in relation to a scheme falling within subsection (1)(a) to (d), the

 

Scottish Ministers;

 

(u)    

in relation to a scheme falling with subsection (1)(e), the trustees

 

of the Scottish Parliamentary Contributory Pension Fund.


 
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