Session 2014 - 15
Internet Publications
Other Bills before Parliament


 
 

Consideration of Bill:                               

1126

 

, continued

 
 

17  (1)  

Section 101P (interpretation) is amended as follows.

 

      (2)  

In subsection (1), at the appropriate places insert—

 

““category”, in relation to benefits, has the meaning given by section

 

101F(6B);”

 

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

 

“flexible benefit”) of the Pension Schemes Act 2014;”.

 

      (3)  

Omit subsection (2).

 

      (4)  

In subsection (3), for “given to the trustees or managers of a salary related

 

occupational pension scheme” substitute “in relation to benefits other than

 

money purchase benefits”.”

 

18         

Omit section 101Q.

 

19         

In section 129 (overriding requirements) for “Chapters II, III, IV and V of Part

 

IV” substitute “Chapters 2 and 3 of Part 4, Chapters 1 and 2 of Part 4ZA”.

 

20         

In section 130 (extra-statutory benefits), in paragraph (b), for “Chapter II, IV

 

or V of Part IV” substitute “Chapter 2 of Part 4 or Chapter 1 or 2 Part 4ZA”.

 

21         

In section 153 (power to modify certain provisions), in subsection (1), for

 

“Chapters II, III and IV of Part IV” substitute “Chapters 2 and 3 of Part 4 and

 

Chapter 1 of Part 4ZA”.

 

22         

In section 179 (linked qualifying service), in subsection (1)(a)—

 

(a)    

in the opening words, for “Chapter 4 or 5 of Part 4” substitute “Chapter

 

1 or 2 of Part 4ZA”;

 

(b)    

in sub-paragraph (iii)—

 

(i)    

for “Chapter 4 of Part 4” substitute “Chapter 1 of Part 4ZA”;

 

(ii)    

for “Chapter 5” substitute “Chapter 2”.

 

23         

In section 181 (interpretation), in subsection (1), in paragraph (b) of the

 

definition of “transfer credits”, for “Chapter 5 of Part 4” substitute “Chapter 2

 

of Part 4ZA”.

 

Pensions Act 1995 (c. 26)

 

24         

The Pensions Act 1995 is amended as follows.

 

25         

In section 67A (the subsisting rights provisions: interpretation), in subsection

 

(9)(a), for sub-paragraph (ii) substitute—

 

“(ii)    

Chapter 2 or 3 of Part 4 of the Pension Schemes Act

 

1993 (certain protection for early leavers) or

 

regulations made under either of those Chapters;

 

(iia)    

Chapter 1 or 2 of Part 4ZA of that Act (transfers and

 

contribution refunds) or regulations made under

 

either of those Chapters;”.

 

26         

In section 73 (preferential liabilities on winding up), in subsection (9), for

 

“Chapter 5 of Part 4” substitute “Chapter 2 of Part 4ZA”.

 

27         

In section 73B (sections 73 and 73A: supplementary), in subsection (7), for

 

“Chapter 4 of Part 4” substitute “Chapter 1 of Part 4ZA”.

 

Learning and Skills Act 2000 (c. 21)

 

28         

In section 135 (pensions: interpretation), in subsection (4), for “section

 

93(1A)” substitute “section 100D”.

 

Pensions Act 2004 (c. 35)

 

29         

The Pensions Act 2004 is amended as follows.

 

30  (1)  

Section 18 (pension liberation: interpretation) is amended as follows.


 
 

Consideration of Bill:                               

1127

 

, continued

 
 

      (2)  

In subsection (2)(a)—

 

(a)    

after “accrued rights” insert “or an entitlement”;

 

(b)    

in sub-paragraph (ii), for “the applicable rules” substitute “the scheme

 

rules”.

 

      (3)  

In subsection (3)—

 

(a)    

for paragraph (a) substitute—

 

“(a)    

section 94 of the Pension Schemes Act 1993 (right to

 

cash equivalent under Chapter 1 of Part 4ZA of that

 

Act)”;

 

(b)    

in paragraph (b), for “Chapter 5 of Part 4” substitute “Chapter 2 of Part

 

4ZA”.

 

      (4)  

In subsection (4)(d), for “the applicable rules” substitute “the scheme rules”.

 

      (5)  

Omit subsection (5).

 

31         

In section 23 (freezing orders), in subsection (4)(g), for “salary related

 

schemes” substitute “benefits other than money purchase”.

 

32         

In section 24 (consequences of freezing order), in subsection (7), for

 

paragraphs (a) and (b) substitute—

 

“(a)    

Chapter 1 of Part 4ZA of the Pension Schemes Act 1993

 

(transfer rights: general), or

 

(b)    

Chapter 2 of that Part (early leavers: cash transfer sums and

 

contribution refunds).”

 

33         

In section 73 (inspection of premises), in subsection (2)(d)—

 

(a)    

for “Chapter 4 of Part 4” substitute “Chapter 1 of Part 4ZA”;

 

(b)    

for “Chapter 5 of Part 4” substitute “Chapter 2 of Part 4ZA”.

 

34         

In section 135 (restrictions on winding up, discharge of liabilities etc), in

 

subsection (6)(b), for “Chapter 5 of Part 4” substitute “Chapter 2 of Part 4ZA”.

 

35         

In section 138 (payment of scheme benefits), in subsection (3)(b), for “Chapter

 

5 of Part 4” substitute “Chapter 2 of Part 4ZA”.

 

36         

In section 318 (interpretation), in subsection (3)(a), for sub-paragraph (ii)

 

substitute—

 

“(ii)    

Chapter 2 or 3 of Part 4 of the Pension Schemes Act

 

1993 (certain protection for early leavers) or

 

regulations made under either of those Chapters;

 

(iia)    

Chapter 1 or 2 of Part 4ZA of that Act (transfers and

 

contribution refunds) or regulations made under

 

either of those Chapters;”.

 

37  (1)  

Schedule 7 (pension compensation provisions) is amended as follows.

 

      (2)  

In paragraph 20(1)(c), for “Chapter 5 of Part 4” substitute “Chapter 2 of Part

 

4ZA”.

 

      (3)  

In paragraph 32(1)(b), for “Chapter 5 of Part 4” substitute “Chapter 2 of Part

 

4ZA”.

 

Pensions Act 2014 (c. 19)

 

38         

The Pensions Act 2014 is amended as follows.

 

39         

In section 34 (power to prohibit offer of incentives to transfer pension rights),

 

in subsection (7), in the definition of “salary related occupational pension

 

scheme”, for “section 93(1A)” substitute “section 100D”.

 

40         

In Schedule 17 (automatic transfer of pension benefits etc), in paragraph 1—

 

(a)    

in sub-paragraph (4)(d) for “applicable rules” substitute “scheme

 

rules”;


 
 

Consideration of Bill:                               

1128

 

, continued

 
 

(b)    

for sub-paragraph (6) substitute—

 

    “(6)  

In sub-paragraph (4)—

 

(a)    

the reference to “scheme rules” is, in relation to an

 

occupational pension scheme, to be read in

 

accordance with section 100B of the Pension

 

Schemes Act 1993;

 

(b)    

“benefits” means—

 

(i)    

money purchase benefits other than money

 

purchase benefits of a prescribed

 

description, or

 

(ii)    

benefits of a prescribed description.”

 

Northern Ireland amendments

 

Pension Schemes (Northern Ireland) Act 1993 (c. 49)

 

41         

The Pension Schemes (Northern Ireland) Act 1993 is amended as follows.

 

42  (1)  

Chapters 4 and 5 of Part 4 of the Act become Chapters 1 and 2 of a new

 

Part 4ZA.

 

      (2)  

Accordingly—

 

(a)    

before section 89 (and before the Chapter heading above it) insert—

 

Part 4ZA

 

Transfers and contribution refunds”;

 

(b)    

for the Chapter heading above section 89 substitute—

 

“Chapter 1

 

Transfer rights: general”;

 

(c)    

for the Chapter heading above section 97AA substitute—

 

“Chapter 2

 

Early leavers: cash transfer sums and contribution refunds”.

 

43         

In section 52 (payment of state scheme premiums on termination of certified

 

status: supplementary), in subsection (4)(b), for “Chapter 5 of Part IV”

 

substitute “Chapter 2 of Part 4ZA”.

 

44         

In section 69 (form of short service benefit and its alternatives), in subsection

 

(3), for “Chapter IV of this Part” substitute “Chapter 1 of Part 4ZA”.

 

45         

For sections 89 to 90 substitute—

 

“89    

Scope of Chapter 1

 

(1)    

This Chapter applies to a member of a pension scheme if all of the

 

following conditions are met.

 

(2)    

Condition 1 is that the member has accrued rights to any category of

 

benefits under the scheme rules.

 

(3)    

Condition 2 is that no crystallisation event has occurred in relation to

 

the member’s accrued rights to benefits in that category (see

 

subsection (7)).


 
 

Consideration of Bill:                               

1129

 

, continued

 
 

(4)    

Condition 3 is that—

 

(a)    

the member is no longer accruing rights to benefits in that

 

category (see subsection (8)), and

 

(b)    

in the case of benefits that are not flexible benefits, the

 

member stopped accruing those rights at least one year before

 

normal pension age.

 

(5)    

But this Chapter does not apply to—

 

(a)    

a member of a salary related occupational pension scheme

 

whose pensionable service terminated before 1 January 1986

 

and in respect of whom prescribed requirements are satisfied;

 

(b)    

a member of a personal pension scheme which is comprised

 

in an annuity contract made before 4 January 1988.

 

(6)    

In this Chapter a reference to a “category” of benefits is to one of the

 

following three categories—

 

(a)    

money purchase benefits;

 

(b)    

flexible benefits other than money purchase benefits;

 

(c)    

benefits that are not flexible benefits.

 

(7)    

For the purposes of Condition 2 a crystallisation event occurs in

 

relation to a member’s accrued rights to benefits in a category when—

 

(a)    

payment of a pension in respect of any of the benefits has

 

begun,

 

(b)    

in the case of money purchase benefits, sums or assets held for

 

the purpose of providing any of the benefits are designated as

 

available for the payment of drawdown pension (as defined by

 

paragraph 4 of Schedule 28 to the Finance Act 2004), or

 

(c)    

in the case of a personal pension scheme, sums or assets held

 

for the purpose of providing any of the benefits are applied for

 

purchasing an annuity or insurance policy.

 

(8)    

For the purposes of Condition 3 a member stops accruing rights to a

 

category of benefits when there are no longer arrangements in place

 

for the accrual of rights to benefits in that category for or in respect of

 

the member.

 

(9)    

In this section a reference to accrued rights does not include pension

 

credit rights.

 

(10)    

Regulations may—

 

(a)    

provide for this Chapter not to apply in relation to a person of

 

a prescribed description;

 

(b)    

modify the application of this Chapter in relation to a member

 

who has accrued rights to benefits of a prescribed description.

 

(11)    

In the following provisions of this Chapter—

 

(a)    

a reference to a “member” of a pension scheme is a reference

 

to a member to whom this Chapter applies, and

 

(b)    

a reference to a member’s “transferrable rights” are to any

 

rights in relation to a category of benefits by virtue of which

 

this Chapter applies to the member.


 
 

Consideration of Bill:                               

1130

 

, continued

 
 

89A    

Right to statement of entitlement: benefits other than money purchase

 

(1)    

The trustees or managers of a pension scheme must, on the application

 

of any member, provide the member with a statement of entitlement in

 

respect of the member’s transferrable rights in relation to categories of

 

benefits other than money purchase benefits.

 

(2)    

In the case of a member with transferrable rights in relation to two

 

categories of benefits other than money purchase benefits, the

 

application may relate to transferrable rights in relation to either or

 

both of those categories.

 

(3)    

For the purposes of this Chapter a member’s “statement of

 

entitlement” is a written statement of the amount of the cash

 

equivalent at the guarantee date of the transferrable rights to which the

 

application under subsection (1) relates.

 

(4)    

In this Chapter “the guarantee date” means the date by reference to

 

which the value of the cash equivalent is calculated, and must be—

 

(a)    

within the prescribed period beginning with the date of the

 

application, and

 

(b)    

within the prescribed period ending with the date on which the

 

statement of entitlement is provided to the member.

 

(5)    

Regulations may make provision in relation to applications under this

 

section and may, in particular, restrict the making of successive

 

applications.

 

(6)    

If the trustees or managers of a pension scheme fail to comply with

 

subsection (1), Article 10 of the Pensions (Northern Ireland) Order

 

1995 (civil penalties) applies to any trustee or manager who has failed

 

to take all reasonable steps to secure compliance.

 

90      

Right to cash equivalent

 

(1)    

A member of a pension scheme who has received a statement of

 

entitlement under section 89A acquires a right to take the cash

 

equivalent shown in that statement in accordance with this Chapter.

 

(2)    

A member of a pension scheme who has transferrable rights in relation

 

to money purchase benefits acquires a right to take their cash

 

equivalent in accordance with this Chapter.”

 

46  (1)  

Section 91 (ways of taking right to cash equivalent) is amended as follows.

 

      (2)  

For subsection (1) substitute—

 

“(1)    

A member of a pension scheme who has acquired a right to take a cash

 

equivalent in accordance with this Chapter may only take it by making

 

an application in writing to the trustees or managers of the scheme

 

requiring them to use the cash equivalent in one of the ways specified

 

below.

 

(1A)    

In the case of a right acquired under section 90(1), the application

 

must be made—

 

(a)    

within the period of 3 months beginning with the guarantee

 

date shown in the relevant statement of entitlement, and

 

(b)    

if the cash equivalent relates to benefits that are not flexible

 

benefits, by no later than the date that falls one year before the

 

member attains normal pension age.”


 
 

Consideration of Bill:                               

1131

 

, continued

 
 

      (3)  

In subsections (2)(a)(i) and (b)(i) and (3)(a)(i) and (b)(i), for “accrued rights”

 

substitute “transferrable rights”.

 

      (4)  

Omit subsections (7) and (8).

 

47  (1)  

Section 92 (further provisions concerning exercise of option under section 91)

 

is amended as follows.

 

      (2)  

For subsection (1) substitute—

 

“(1)    

A member who has acquired a right to take a cash equivalent under

 

section 90(1) or (2) may exercise the option conferred by section 91(1)

 

in relation to different portions of that cash equivalent in different

 

ways, but a member who exercises that option must do so—

 

(a)    

in relation to the whole of that cash equivalent, or

 

(b)    

if subsection (2) applies, in relation to the whole of the

 

balance mentioned in subsection (3).”

 

      (3)  

For subsection (4) substitute—

 

“(4)    

Where a member of a pension scheme—

 

(a)    

is entitled to make an application under section 91(1) in

 

relation to any category of benefits, and

 

(b)    

is also entitled to give a transfer notice under section 97F(1)

 

to the trustees or managers of the scheme in relation to

 

benefits in the same category (or would be entitled to do so but

 

for section 97G(2)),

 

    

the member may not, if the scheme so provides, make an application

 

under section 91(1) in relation to that category of benefits without also

 

giving a transfer notice under section 97F(1) in relation to that

 

category of benefits.”

 

48  (1)  

Section 93 (calculation of cash equivalents) is amended as follows.

 

      (2)  

After subsection (1) insert—

 

“(1A)    

Where a member applies under section 91 to take a cash equivalent

 

that relates to money purchase benefits, the cash equivalent is to be

 

calculated by reference to the date of the application.”

 

      (3)  

In subsection (2)—

 

(a)    

in the opening words, for “except guaranteed cash equivalents (as

 

defined in section 90(1A)” substitute “that relate to money purchase

 

benefits”;

 

(b)    

in paragraph (aa), for “, including a guaranteed cash equivalent,”

 

substitute “that relates to any category of benefits”.

 

      (4)  

In subsection (3), omit paragraph (a).

 

      (5)  

For subsection (3A) substitute—

 

“(3A)    

For the purposes of subsection (3), the “appropriate date”—

 

(a)    

in relation to a cash equivalent that relates to benefits other

 

than money purchase benefits, means the guarantee date for

 

the purposes of the relevant statement of entitlement under

 

section 89A, and

 

(b)    

in relation to a cash equivalent that relates to money purchase

 

benefits, means the date on which the trustees or managers

 

receive an application from the member under section 91.”


 
 

Consideration of Bill:                               

1132

 

, continued

 
 

49         

For section 94 substitute—

 

“94    

Loss of right to cash equivalent

 

(1)    

A member of a pension scheme who acquires the right to take a cash

 

equivalent under section 90(1) loses that right if no application to take

 

the cash equivalent is made within the period specified in

 

section 91(1A) (but this does not prevent the member later acquiring a

 

new right to take a cash equivalent under section 90(1) in relation to

 

the same benefits).

 

(2)    

A member of a pension scheme loses the right to take a cash equivalent

 

in accordance with this Chapter if the scheme is wound up.”

 

50  (1)  

Section 95 (trustees’ duties after exercise of option) is amended as follows.

 

      (2)  

For subsection (2) substitute—

 

“(2)    

Subject to the following provisions of this section, if the trustees or

 

managers of a scheme receive an application under section 91 they

 

must do what is needed to carry out what the member requires—

 

(a)    

in the case of an application that relates to benefits other than

 

money purchase benefits, within 6 months beginning with the

 

guarantee date shown in the relevant statement of entitlement,

 

and

 

(b)    

in the case of an application that relates to money purchase

 

benefits, within 6 months beginning with the date of the

 

application.”

 

      (3)  

In subsection (3)(a) omit “at any time before the expiry of the 12 months

 

beginning with the termination date”.

 

      (4)  

Omit subsection (3A).

 

51         

After section 96 insert—

 

“96A  

 Prohibition on excluding future accruals etc

 

Except as mentioned in sections 92(4) and 97G(4), a pension scheme

 

may not contain rules that would have the effect of—

 

(a)    

preventing a member from exercising a right under this

 

Chapter in relation to a category of benefits without also

 

exercising a right under this Chapter or otherwise to require a

 

transfer payment to be made in respect of another category of

 

benefits, or

 

(b)    

preventing a member who exercises a right under this Chapter

 

in relation to a category of benefits from accruing rights to

 

benefits in another category.

 

96B    

Meaning of “scheme rules”: occupational pension schemes

 

(1)    

In this Chapter references to the scheme rules, in relation to an

 

occupational pension scheme, are references to—

 

(a)    

the rules of the scheme, except so far as overridden by a

 

relevant legislative provision,

 

(b)    

the relevant legislative provisions, to the extent that they have

 

effect in relation to the scheme and are not reflected in the

 

rules of the scheme, and

 

(c)    

any provision which the rules of the scheme do not contain but

 

which the scheme must contain if it is to conform with the

 

requirements of Chapter 1 of Part 4.


 
previous section contents continue
 

© Parliamentary copyright
Revised 25 November 2014