Session 2014 - 15
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Consideration of Bill:                               

1105

 

, continued

 
 

(b)    

the amount of a lump sum payable to a member, or in respect of a

 

deceased member, will represent a particular proportion of the available

 

amount.”

 

Member’s explanatory statement

 

This is to be added to Part 4 of the Bill. The definitions are intended to govern the interpretation

 

of the new clauses about independent advice, drawdown and lump sums (also to be added to Part

 

4). The definitions are also applied by some of the amendments to other legislation.

 


 

Secretary Iain Duncan Smith

 

NC33

 

To move the following Clause

 

         

“Interpretation of Part 4

 

UK definitions

 

(1)    

In this Part—

 

“cash balance benefit” has the meaning given by section (Meaning of “cash

 

balance benefit”);

 

“dependants’ drawdown pension”, in relation to a member, has the meaning

 

given by paragraph 18 of Schedule 28 to the Finance Act 2004;

 

“drawdown pension”, in relation to a survivor, has the meaning given by

 

paragraph 4 of Schedule 28 to the Finance Act 2004;

 

“flexible benefit” has the meaning given by section (Meaning of “flexible

 

benefit”);

 

“normal pension age”, in relation to a benefit for a member of a pension

 

scheme or a survivor of a member, means—

 

(e)    

the earliest age at which, or earliest occasion on which, the

 

member or survivor is entitled to receive the benefit without

 

adjustment for taking it early or late (disregarding any special

 

provision as to early payment on the grounds of ill health or

 

otherwise), or

 

(f)    

if there is no such age or occasion, normal minimum pension age

 

as defined by section 279(1) of the Finance Act 2004;

 

“subsisting right”—

 

(g)    

in relation to a member of a pension scheme means—

 

(i)    

any right which has accrued to or in respect of the

 

member to future benefits under the scheme, or

 

(ii)    

any entitlement to benefits under the scheme,

 

(h)    

in relation to a survivor of a member of a pension scheme, means

 

any right to future benefits, or entitlement to benefits, which the

 

survivor has under the scheme in respect of the member;

 

“survivor”, in relation to a member of an occupational pension scheme,

 

means a person who has survived the member and has a right to future

 

benefits, or is entitled to benefits, under the scheme in respect of the

 

member;

 

“trustees or managers” means—

 

(i)    

in relation to a scheme established under a trust, the trustees, and

 

(j)    

in relation to any other scheme, the managers.


 
 

Consideration of Bill:                               

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, continued

 
 

    

Great Britain only definitions

 

(2)    

In any provision of this Part as it extends to England and Wales and Scotland—

 

“money purchase benefits” has the meaning given by section 181 of the

 

Pension Schemes Act 1993;

 

“occupational pension scheme” has the meaning given by section 1 of the

 

Pension Schemes Act 1993;

 

“pension scheme” has the meaning given by section 1(5) of the Pension

 

Schemes Act 1993.

 

    

Northern Ireland only definitions

 

(3)    

In any provision of this Part as it extends to Northern Ireland—

 

“money purchase benefits” has the meaning given by section 176 of the

 

Pension Schemes (Northern Ireland) Act 1993;

 

“occupational pension scheme” has the meaning given by section 1 of the

 

Pension Schemes (Northern Ireland) Act 1993;

 

“pension scheme” has the meaning given by section 1(5) of the Pension

 

Schemes (Northern Ireland) Act 1993.”

 

Member’s explanatory statement

 

This is expected to be added to Part 4 of the Bill and is intended to govern the interpretation of the

 

new clauses about independent advice, drawdown and lump sums (which are also expected to be

 

added to Part 4).

 


 

Secretary Iain Duncan Smith

 

Clause  2,  page  2,  line  2,  at end insert “, and

 

(d)    

such other requirements as may be specified in regulations are met.”

 

Member’s explanatory statement

 

This amendment enables the Secretary of State to make regulations to prescribe additional

 

requirements which must be met in order for a scheme to fall within the defined benefit scheme

 

definition.

 

Secretary Iain Duncan Smith

 

Clause  5,  page  3,  line  4,  at end insert—

 

“( )    

A promise about the level of retirement income is not to be treated as a pensions

 

promise if—

 

(a)    

the promise is conditional on the retirement income coming into payment

 

by a particular date,

 

(b)    

the scheme provides for the member to be first given the promise during

 

such period ending on that date as may be specified in regulations, and

 

(c)    

the promise is not of a description specified in regulations.”

 

Member’s explanatory statement

 

Under clause 5 a pensions promise is a promise made at a time before the benefit comes into

 

payment. This amendment makes an exception to that provision.


 
 

Consideration of Bill:                               

1107

 

, continued

 
 

Secretary Iain Duncan Smith

 

Clause  7,  page  4,  line  5,  at end insert—

 

““regulations” means regulations made by the Secretary of State;”

 

Member’s explanatory statement

 

This amendment is consequential on amendment 34. Provision about by whom regulations may be

 

made is now to be dealt with in the relevant Part or clause.

 

Secretary Iain Duncan Smith

 

Clause  19,  page  8,  line  29,  at end insert—

 

“( )    

set out matters that the trustees or managers must take into account, or

 

principles they must follow, in formulating the policy;”

 

Member’s explanatory statement

 

The amendment allows regulations which require trustees or managers to have a policy relating

 

to a deficit or surplus to make provision about matters to take into account and principles they must

 

follow.

 

Secretary Iain Duncan Smith

 

Clause  19,  page  8,  line  36,  after “policy” insert “, or any requirements imposed by

 

regulations under section (Power to impose requirements about dealing with a deficit or

 

surplus),”

 

Member’s explanatory statement

 

This amendment allows regulations to require that the policy on deficits and surpluses explains the

 

possible effect on members of any requirements imposed by regulations made under NC3.

 

Secretary Iain Duncan Smith

 

Clause  22,  page  9,  line  24,  after “in” insert “the following—

 

(a)    

 

Member’s explanatory statement

 

This is one of a group of amendments to ensure the policy on calculating cash equivalents applies

 

in all cases where trustees or managers need to calculate a cash equivalent for the member’s

 

benefits.

 

Secretary Iain Duncan Smith

 

Clause  22,  page  9,  line  25,  leave out “93A(1ZB)” and insert “93A(3)”

 

Member’s explanatory statement

 

This is consequential on NS1, which replaces the provision mentioned in clause 22(2).


 
 

Consideration of Bill:                               

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, continued

 
 

Secretary Iain Duncan Smith

 

Clause  22,  page  9,  line  25,  at end insert—

 

“(b)    

section 101H(1) of that Act;

 

(c)    

section 29(2) and (3) of the Welfare Reform and Pensions Act 1999;

 

(d)    

any other provision specified in regulations.”

 

Member’s explanatory statement

 

This amendment extends the scope of the policy on calculating cash equivalents to cover cash

 

equivalents calculated for the purposes of provisions about transfers of pension credit rights and

 

pension sharing on divorce and for other purposes specified in regulations.

 

Secretary Iain Duncan Smith

 

Clause  22,  page  9,  line  26,  leave out “The regulations” and insert “Regulations

 

under subsection (1)”

 

Member’s explanatory statement

 

This is consequential on amendment 9.

 

Secretary Iain Duncan Smith

 

Clause  22,  page  9,  line  29,  after “97” insert “or 101I”

 

Member’s explanatory statement

 

This is consequential on amendment 9.

 

Secretary Iain Duncan Smith

 

Clause  22,  page  9,  line  30,  at end insert “or section 30 of the Welfare Reform and

 

Pensions Act 1999 or any other specified requirements”

 

Member’s explanatory statement

 

This is consequential on amendment 9.

 

Secretary Iain Duncan Smith

 

Clause  22,  page  9,  line  31,  at end insert—

 

“( )    

set out matters that the trustees or managers must take into account, or

 

principles they must follow, in formulating the policy;”

 

Member’s explanatory statement

 

The amendment allows regulations which require trustees or managers to have a policy on

 

calculating cash equivalents to make provision about matters to take into account and principles

 

they must follow.

 

Secretary Iain Duncan Smith

 

Clause  23,  page  9,  line  34,  at end insert—

 

“( )    

Regulations may make provision about the winding up of a pension scheme under

 

which collective benefits may be provided or part of such a scheme.

 

( )    

The regulations may, in particular, make provision about—

 

(a)    

the  distribution of assets (including any order of priority);

 

(b)    

the operation of the scheme during winding up;


 
 

Consideration of Bill:                               

1109

 

, continued

 
 

(c)    

the discharge of liabilities;

 

(d)    

excess assets on winding up.”

 

Member’s explanatory statement

 

This confers a broader power to make provision about the winding up of schemes that provide

 

collective benefits or parts of those schemes. Where appropriate, this will enable provision to be

 

made that is neither corresponding nor similar to the provisions currently listed in clause 23.

 

Secretary Iain Duncan Smith

 

Clause  23,  page  9,  line  35,  at the beginning insert “The”

 

Member’s explanatory statement

 

This is consequential on amendment 14.

 

Secretary Iain Duncan Smith

 

Clause  23,  page  9,  line  35,  after “may” insert “, in particular”

 

Member’s explanatory statement

 

This is consequential on amendment 14.

 

Secretary Iain Duncan Smith

 

Clause  23,  page  9,  line  36,  leave out “modify” and insert “amend or otherwise

 

modify”

 

Member’s explanatory statement

 

This allows the provisions listed in clause 23 to be amended.

 

Secretary Iain Duncan Smith

 

Clause  23,  page  9,  line  36,  after “sections” insert “38,”

 

Member’s explanatory statement

 

This adds to the list of winding up provisions that may be disapplied or modified etc under clause

 

23.

 

Secretary Iain Duncan Smith

 

Clause  23,  page  9,  line  36,  leave out “and 74” and insert “, 74 and 76”

 

Member’s explanatory statement

 

This adds to the list of winding up provisions that may be disapplied or modified etc under clause

 

23.

 

Secretary Iain Duncan Smith

 

Clause  23,  page  9,  line  37,  leave out “in relation to collective benefits”

 

Member’s explanatory statement

 

This amendment and amendment 21 broaden the power to make provision about winding up. In a

 

case where a scheme contains a mixture of benefits, it might be necessary to make provision about

 

the non-collective benefits as well as the collective benefits.


 
 

Consideration of Bill:                               

1110

 

, continued

 
 

Secretary Iain Duncan Smith

 

Clause  23,  page  9,  line  39,  leave out “in relation to collective benefits”

 

Member’s explanatory statement

 

See Member’s explanatory statement for amendment 20.

 

Secretary Iain Duncan Smith

 

Clause  24,  page  10,  line  5,  leave out “required by regulations under this Part”

 

Member’s explanatory statement

 

This amendment extends the power to specify when trustees and managers must seek actuarial

 

advice so that it can relate to decisions and actions that are beyond the scope of regulations made

 

under Part 2 of the Bill.

 

Secretary Iain Duncan Smith

 

Clause  29,  page  10,  line  34,  at end insert—

 

““deficit”, in respect of a collective benefit, has the meaning given by

 

section 19 (but this definition does not apply in section 20, which

 

contains its own definition);”

 

Member’s explanatory statement

 

This amendment inserts a definition of “deficit” into clause 29, and gives it the same meaning as

 

the definition included in clause 19.

 

Secretary Iain Duncan Smith

 

Clause  29,  page  10,  line  38,  at end insert—

 

““regulations” means regulations made by the Secretary of State;”

 

Member’s explanatory statement

 

See Member’s explanatory statement for amendment 4.

 

Secretary Iain Duncan Smith

 

Clause  29,  page  11,  line  2,  at end insert—

 

““surplus”, in respect of a collective benefit, has the meaning given by

 

section 19;”

 

Member’s explanatory statement

 

This amendment inserts a definition of “surplus” into clause 29, and gives it the same meaning as

 

the definition included in clause 19.


 
 

Consideration of Bill:                               

1111

 

, continued

 
 

Secretary Iain Duncan Smith

 

Clause  30,  page  11,  line  17,  leave out “Regulations may” and insert “The Secretary

 

of State may by regulations”

 

Member’s explanatory statement

 

See Member’s explanatory statement for amendment 4.

 

Secretary Iain Duncan Smith

 

Clause  31,  page  11,  line  40,  leave out “Regulations may” and insert “The Secretary

 

of State may by regulations”

 

Member’s explanatory statement

 

See Member’s explanatory statement for amendment 4.

 

Secretary Iain Duncan Smith

 

Page  14,  line  26,  leave out Clause 35

 

Member’s explanatory statement

 

Clause 35 and Schedule 2 are superseded by NC24 and NS1.

 

Secretary Iain Duncan Smith

 

Page  14,  line  28,  leave out Clause 36

 

Member’s explanatory statement

 

This amendment removes clause 36. For the replacement provision imposing restrictions on

 

transfers out of public service defined benefits schemes in Great Britain, see NC25.

 

Secretary Iain Duncan Smith

 

Clause  43,  page  17,  line  32,  leave out “cash balance benefits or other money

 

purchase” and insert “flexible”

 

Member’s explanatory statement

 

This amendment is consequential on amendment 56.


 
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