House of Commons Amendments

Session 2014 - 15
Internet Publications
Other Bills before Parliament

Consideration of Bill:
1091

, 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.”

Consideration of Bill:
1092

, 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”.

Consideration of Bill:
1093

, 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)”.

Consideration of Bill:
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(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”.

Consideration of Bill:
1095

, 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,

Consideration of Bill:
1096

, 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”.

Consideration of Bill:
1097

, 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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