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Pension Schemes BillPage 10

Regulations under Part 2: general

24 Requirement to obtain actuarial advice

(1) Regulations may require the trustees or managers of a pension scheme to
obtain advice from an actuary before making a specified decision or taking
5other specified steps required by regulations under this Part.

(2) The regulations may, in particular, require the trustees or managers to obtain
the advice from an actuary who has specified qualifications or meets other
specified requirements.

(3) The regulations—

(a) 10may require an actuary to have regard to guidance issued from time to
time by a specified person when advising on matters in accordance
with the regulations;

(b) may impose other requirements on an actuary when advising on
matters in accordance with the regulations.

25 15Sub-delegation

Regulations under this Part may confer a discretion on a person.

26 Publication etc of documents

Regulations under this Part requiring the trustees or managers of a pension
scheme to prepare or obtain any document may impose requirements about—

(a) 20the publication of the document;

(b) the sending of copies to persons specified in the regulations.

27 Enforcement

Regulations under this Part may provide for section 10 of the Pensions Act 1995
(civil penalties) to apply to a person who fails to comply with the regulations.

28 25Overriding requirements

Regulations under this Part may include provision for them to override the
provisions of a pension scheme to the extent that there is a conflict.

Interpretation of Part 2

29 Interpretation of Part 2

(1) 30In this Part—

(2) A power conferred by this Part to make provision corresponding or similar to
10any provision made by a section of another Act includes a power to make
provision corresponding or similar to any provision that may be made by
regulations under that section.

Part 3 General changes to legislation about pension schemes

15Administration and governance

30 Pensions promise obtained from third party

(1) Regulations may provide that the trustees or managers of a defined benefits
scheme or a shared risk scheme must not obtain a pensions promise from a
third party unless conditions specified in the regulations are met.

(2) 20Regulations under this section—

(a) may provide for a specified provision of the regulations to override a
provision of a scheme to the extent that there is a conflict;

(b) may provide for section 10 of the Pensions Act 1995 (civil penalties) to
apply to a person who fails to comply with the regulations.

(3) 25In this section—

(4) In section 34(7) of the Pensions Act 1995 (power of investment and delegation
overrides other legislation etc), for the words from “other than” substitute
35“other than an enactment contained in, or made under—

(a) this Part,

(b) the Pension Schemes Act 1993, or

(c) section 30 of the Pension Schemes Act 2014.”

31 Duty to act in the best interests of members

(1) 40Regulations may impose a duty on the managers of a relevant non-trust based
scheme to act in the best interests of members when taking decisions of a
specified description.

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(2) In this section “relevant non-trust based scheme” means a non-trust based
scheme that is—

(a) a shared risk scheme, or

(b) a defined contributions scheme under which any of the benefits that
5may be provided are collective benefits.

(3) Regulations under this section—

(a) may provide for the duty to act in the best interests of members to
override obligations that are inconsistent with that duty (including
obligations imposed by any instrument, enactment or rule of law), but

(b) 10do not otherwise affect any duty that might arise apart from this
section.

(4) Regulations under this section may provide for the consequences of a manager
breaching (or threatening to breach) the duty to act in the best interests of
members to be the same as the consequences of breaching (or threatening to
15breach) a fiduciary duty owed by the manager to the members and,
accordingly, for the duty to be enforceable in the same way as a fiduciary duty.

(5) In this section—

32 Disclosure of information about schemes

(1) Section 113 of the Pension Schemes Act 1993 (disclosure of information about
25schemes to members etc) is amended as follows.

(2) In subsection (1)—

(a) in the opening words, for “the persons mentioned in subsection (2)”
substitute “persons of prescribed descriptions”;

(b) in paragraph (ca), omit “to the member” and “by him”.

(3) 30Omit subsection (2).

(4) Before subsection (3) insert—

(2A) In complying with requirements specified in the regulations, a person
must have regard to any guidance prepared from time to time by the
Secretary of State.

(5) 35For subsection (4) substitute—

(4) Where the regulations specify requirements to be complied with in the
case of an occupational pension scheme with respect to keeping
recognised trade unions informed, the regulations must make
provision for referring to an employment tribunal any question
40whether an organisation is a recognised trade union.

(4A) For the purposes of subsection (4) a trade union is a recognised trade
union in relation to an occupational pension scheme if it is an
independent trade union recognised to any extent for the purposes of
collective bargaining in relation to members and to prospective
45members of the scheme.

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(6) In subsection (5), for “some or all of the persons mentioned in subsection (2)”
substitute “persons of a prescribed description”.

(7) Omit paragraph 17 of Schedule 12 to the Pensions Act 2004, which is no longer
needed given subsection (3).

5Early leavers

33 Extension of preservation of benefit under occupational pension schemes

(1) Part 4 of the Pension Schemes Act 1993 (protection for early leavers) is
amended as follows.

(2) In section 71 (basic principle as to short service benefit)—

(a) 10in subsection (1), for paragraph (aa) (but not the “or” at the end)
substitute—

(aa) he has at least 30 days’ qualifying service and, if he were
entitled to benefit because of this paragraph, all of it
would necessarily be benefit falling within subsection
15(1A),;

(b) after subsection (1) insert—

(1A) The following fall within this subsection—

(a) collective benefits;

(b) benefits calculated otherwise than by reference to the
20member’s salary.

(3) In section 70 (interpretation of Chapter 1: preservation requirements), in
subsection (1)—

(a) after the definition of “relevant employment” insert—

(b) in the definition of “long service benefit” omit the words from “and in
this definition “benefits” means” to the end of the definition.

(4) 35In section 71, for subsections (7) to (11) substitute—

(7) In subsection (1), “2 years’ qualifying service” or (as the case may be)
“30 days’ qualifying service” means a period of service of the relevant
duration in which the member was at all times employed either—

(a) in pensionable service under the scheme, or

(b) 40in service in employment which was contracted-out by
reference to the scheme, or

(c) in linked qualifying service under another scheme.

(8) For the purposes of subsection (7)—

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(a) a period of service may consist of a single period or two or more
periods, continuous or discontinuous;

(b) no regard is to be had to whether or not the service was of the
same description throughout the period of service.

(9) 5A period of service previously terminated is not to count towards the 2
years’ or (as the case may be) 30 days’ qualifying service unless it
counts towards qualification for long service benefit, and need then
count only to the same extent and in the same way.

(10) Subsection (1)(aa) does not apply in relation to a person’s membership
10of a scheme if—

(a) in a case where the benefit would necessarily all be money
purchase benefit, any period of relevant service began before
the day on which section 36 of the Pensions Act 2014 came into
force (whether or not it also ended before that date);

(b) 15in any other case, any period of relevant service began before
the day on which section 33 of the Pension Schemes Act 2014
came into force (whether or not it also ended before that date).

“Relevant service” means service that counts towards the 30 days’
qualifying service for the purposes of subsection (1)(aa).

(5) 20In section 74 (computation of short service benefit), in subsections (3) and (4),
after “so much of any benefit” insert “, other than collective benefit,”.

(6) In section 36 of the Pensions Act 2014, omit subsections (2) and (3) which are
no longer needed given the earlier provisions of this section.

34 Revaluation of accrued benefits

25Schedule 1 contains amendments about the revaluation of benefits.

35 Transfer values

Schedule 2 contains amendments about transfer values.

36 Restriction on transfers out of public service defined benefits schemes

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

(2) 30In section 93 (scope of Chapter 4 of Part 4: transfer values for early leavers),
after subsection (1B) insert—

(1C) The Treasury may by regulations apply this Chapter with prescribed
modifications in relation to a person who is a member of a public
service defined benefits scheme to prevent the person from taking a
35right to a cash equivalent in such a way that its value is—

(a) transferred to a defined contributions scheme;

(b) converted into a right to collective benefits.

(3) In section 93, after subsection (2) insert—

(3) In subsection (1C)—

(4) In section 186 (Parliamentary control of orders and regulations), in
subsection (1) (negative procedure), after “Secretary of State” insert “or the
Treasury”.

10Indexation

37 Collective benefits exempt from indexation

(1) In section 51 of the Pensions Act 1995 (annual increase in rate of pension)—

(a) in subsection (1), for “Subject to subsections (6) and (7)” substitute
“Subject to subsections (6) to (7A)”;

(b) 15after subsection (7) insert—

(7A) This section does not apply to any pension, or part of a pension,
that is a collective benefit.

(2) Omit section 21(2) of the Pensions Act 2011, which is no longer needed given
subsection (1).

38 20Regulatory own fund schemes exempt from indexation

(1) Section 51 of the Pensions Act 1995 (annual increase in rate of pension) is
amended as follows.

(2) In subsection (1)(a)(ii) (scheme based exemption) after “public service pension
scheme” insert “or a regulatory own fund scheme (see subsection (9))”.

(3) 25After subsection (8) insert—

(9) In subsection (1)(a)(ii) “regulatory own fund scheme” means a scheme
in respect of which Article 17 of Council Directive 2003/41/EC of 3
June 2003 on the activities and supervision of institutions for
occupational retirement provision applies.

(10) 30Regulations may amend subsection (9) to replace the reference to the
Article mentioned there with a reference to any provision of an EU
instrument that replaces it (with or without changes).

39 Power to create other exemptions from indexation

(1) In section 51 of the Pensions Act 1995 (annual increase in rate of pension), after
35subsection (5) insert—

(5A) Regulations may provide that this section does not apply to a pension,
or part of a pension, of a specified description.

(5B) But regulations under subsection (5A) may not be made in respect of—

(a) a pension, or any part of a pension, under a defined benefits
40scheme,

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(b) a pension, or any part of a pension, which came into payment
before the day on which the regulations come into force, or

(c) a pension, or any part of a pension, which is attributable to
pensionable service before the day on which the regulations
5come into force.

(5C) Regulations under subsection (5A) may amend this Part.

(2) In section 175(2) of that Act (statutory instruments subject to affirmative
procedure), before paragraph (a) insert—

(za) section 51(5A),.

10Independent trustees

40 Removal of requirement to maintain register of independent trustees

(1) Section 23 of the Pensions Act 1995 (power to appoint an independent trustee
of an occupational pension scheme on the insolvency of the person who is the
employer in relation to the scheme etc) is amended as follows.

(2) 15In subsection (1), omit paragraph (b) (requirement for the trustee to be
registered in a register maintained by the Pensions Regulator) and the “and”
before it.

(3) Omit subsections (4) to (6) (regulations to provide for there to be a register of
independent trustees).

20Rules about modification of schemes

41 Rules about modification of schemes

(1) The Pensions Act 1995 is amended as follows.

(2) In section 67 (the subsisting rights provisions)—

(a) in subsection (3), omit paragraph (b) and the “or” before it;

(b) 25after subsection (3) insert—

(3A) Regulations may provide for cases in which the subsisting
rights provisions do not apply.

(3) In section 67A (the subsisting rights provisions: interpretation), in subsection
(3) (meaning of “protected modification”), after paragraph (a) insert—

(aa) 30on taking effect would or might result in any subsisting right of
a member of the scheme which is a right to benefits in respect of
which there is a pensions promise becoming, or being replaced
with, a right to benefits under the scheme rules in respect of
which there is no pensions promise,

(ab) 35on taking effect would or might result in any subsisting right of
a member of the scheme which is a right to retirement income
in respect of which there is a pensions promise becoming, or
being replaced with, a right to benefits other than retirement
income,

(ac) 40on taking effect would or might result in any subsisting right
of—

(i) a member of the scheme, or

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(ii) a survivor of a member of the scheme,

being replaced with a right or entitlement to collective benefits
under the scheme rules,.

(4) In subsection (3)(b) of that section, after “rules” insert “, other than a pension
5that is a collective benefit”.

(5) In subsection (5)(a) of that section, after “paragraph (a)” insert “, (aa), (ab),
(ac)”.

(6) In subsection (9) of that section—

(a) in paragraph (a), after sub-paragraph (vii) insert—

(viii) 10regulations made under Part 2 of the Pension Schemes
Act 2014;;

(b) in paragraph (b), after sub-paragraph (v) insert—

(vi) regulations made under section 28 of the Pension
Schemes Act 2014.

(7) 15In section 124 (interpretation), in subsection (1), at the appropriate places
insert—

Other amendments

42 Other amendments to do with Parts 1 and 2

Schedule 3—

(a) contains amendments to do with Parts 1 and 2, and

(b) 25replaces references to “money purchase scheme” so as to limit the
number of different ways of categorising pension schemes.

Part 4 Pensions guidance

43 Pensions guidance

30Schedule 4 contains amendments of the Financial Services and Markets Act
2000, and of other legislation, that are about the giving of pensions guidance to
pension scheme members with a right or entitlement to cash balance benefits
or other money purchase benefits.

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Part 5 Miscellaneous

Remploy

44 Payments into Remploy Limited Pension and Assurance Scheme

5The Secretary of State may make payments into the Remploy Limited Pension
and Assurance Scheme.

Judicial pensions

45 Pension scheme for fee-paid judges

(1) In the Judicial Pensions and Retirement Act 1993, after Part 1 insert—

PART 1A

18A 10Pension scheme for fee-paid judges

(1) The appropriate Minister may by regulations establish a scheme for the
payment of pensions and other benefits to or in respect of fee-paid
judges.

(2) The scheme may make provision for payments to or in respect of a
15person in relation to the person’s service before the scheme is
established.

(3) No benefits are to be provided under a new public service pension
scheme in relation to service in relation to which benefits are to be
provided under a scheme under this section.

20“New public service pension scheme” means a scheme under—

(a) section 1 of the Public Service Pensions Act 2013, or

(b) section 1 of the Public Service Pensions Act (Northern Ireland)
2014 (c. 2)2014 (c. 2).

(4) Regulations under this section may, in particular, include provision
25corresponding or similar to—

(a) any provision made by Part 1, section 20 or Schedule 2 or 2A;

(b) any provision that may be made by regulations under Part 1,
section 20 or Schedule 2 or 2A.

(5) In this section—

(2) Schedule 5 contains related amendments.

Pension Schemes BillPage 19

46 Judicial pensions: pension sharing on divorce etc

In paragraph 1(5) of Schedule 2A to the Judicial Pensions and Retirement Act
1993 (pension credits), for the words from “in respect of the office” to the end
substitute “in respect of the rights from which the pension credit is derived”.

5Marriage of same sex couples

47 Extension to Scotland of certain provisions about marriage of same sex
couples

Sections 17(11), 24D(5), 37(7) and 38A of the Pension Schemes Act 1993
(regulations about relevant gender change cases) extend to Scotland.

10Pension sharing

48 Pension sharing and normal benefit age

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

(2) In section 101B (interpretation), for the definition of “normal benefit age”
substitute—

(3) 25In section 101C (basic principle as to pension credit benefit), for subsection (1)
substitute—

(1) The normal benefit age in relation to a pension credit benefit for a
member of a scheme—

(a) must not be lower than 60, and

(b) 30must not be higher than the permitted maximum.

(1A) The “permitted maximum” is 65 or, if higher, the highest normal
pension age for any benefit that is payable under the scheme to or in
respect of any of the members by virtue of rights which are not
attributable (directly or indirectly) to a pension credit.

35Part 6 General

49 References to “pensions legislation”: amendments to include this Act etc

(1) The Pensions Act 2004 is amended as follows.

(2) In section 13 (improvement notices), in subsection (7)—

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