(a) omit the “or” at the end of paragraph (d);

(b) after paragraph (e) insert “, or

(f) the Pension Schemes Act 2014.”

(3) In section 90 (codes of practice), in the definition of “the pensions legislation”
5in subsection (6)—

(a) omit the “or” at the end of paragraph (c);

(b) after paragraph (d) insert—

“(e) Schedule 18 to the Pensions Act 2014, or

(f) the Pension Schemes Act 2014.”

(4) 10In section 254 (representative of non-European scheme to be treated as trustee),
in subsection (3)—

(a) omit the “or” at the end of paragraph (c);

(b) after paragraph (d) insert “, or

(e) the Pension Schemes Act 2014.”

(5) 15In section 291 (duty of trustees or managers to act consistently with law of host
member state), in subsection (4)—

(a) omit the “or” at the end of paragraph (c);

(b) after paragraph (d) insert “, or

(e) the Pension Schemes Act 2014.”

50 20Power to make consequential amendments

(1) The Secretary of State may by regulations make provision that is consequential
on any provision made by this Act.

(2) Regulations under this section may amend, repeal, revoke or otherwise modify
any legislation (whenever passed or made).

(3) 25“Legislation” means—

(a) an Act, or

(b) subordinate legislation as defined by section 21(1) of the Interpretation
Act 1978.

51 Regulations

(1) 30A power to make regulations under this Act is exercisable by the Secretary of
State.

(2) Regulations under this Act are to be made by statutory instrument.

(3) A statutory instrument containing regulations under section 50 that amend,
repeal or otherwise modify a provision of an Act (whether alone or with other
35provision) may not be made unless a draft of the instrument has been laid
before and approved by a resolution of each House of Parliament.

(4) Any other statutory instrument containing regulations under this Act is subject
to annulment in pursuance of a resolution of either House of Parliament.

(5) Subsection (4) does not apply to a statutory instrument containing regulations
40under section 54(3) or (5) only.

(6) A power to make regulations under this Act may be used—

(a) to make different provision for different purposes;

(b) in relation to all or only some of the purposes for which it may be used.

(7) Regulations under this Act may include incidental, supplementary,
consequential, transitional, transitory or saving provision.

52 Crown application

(1) 5In this section “the relevant provisions” means—

(a) Part 2 (collective benefits), and

(b) section 30 (pensions promise obtained from third party).

(2) The relevant provisions apply to a pension scheme managed by or on behalf of
the Crown as they apply to other pension schemes.

(3) 10Accordingly, references in those provisions to a person in the person’s capacity
as a trustee or manager of a pension scheme include the Crown, or a person
acting on behalf of the Crown, in that capacity.

(4) References in the relevant provisions to a person in the person’s capacity as an
employer include the Crown, or a person acting on behalf of the Crown, in that
15capacity.

(5) Nothing in the relevant provisions applies to Her Majesty in Her private
capacity (within the meaning of the Crown Proceedings Act 1947).

53 Extent

(1) This Act extends to England and Wales and Scotland only, subject to the
20following provisions of this section.

(2) Any amendment or repeal made by this Act has the same extent as the
enactment to which it relates.

(3) Section 47 extends to Scotland only.

(4) This Part, apart from section 49, extends also to Northern Ireland.

54 25Commencement

(1) The following come into force on the day on which this Act is passed—

(a) sections 45 and 46 and Schedule 5;

(b) this Part, apart from section 49.

(2) Section 48 comes into force on 1 April 2015.

(3) 30The following come into force on such day or days as may be appointed by
regulations—

(a) Parts 1 to 4;

(b) sections 44, 47 and 49.

(4) Regulations under subsection (3) may appoint different days for different
35purposes.

(5) Regulations may make transitional, transitory or saving provision in
connection with the coming into force of any provision of this Act.

55 Short title

This Act may be cited as the Pension Schemes Act 2014.

SCHEDULES

Section 34

SCHEDULE 1 Early leavers: revaluation of accrued benefits

1 The Pension Schemes Act 1993 is amended as follows.

2 5Before section 83 insert—

“82A Overview and meaning of “relevant commencement date”

(1) This Chapter is about the revaluation of benefits for early leavers.

(2) The table contains an overview of the contents of this Chapter.

(3) 20In this Chapter “the 2014 Act commencement date” means the date
on which paragraph 2 of Schedule 1 to the Pension Schemes Act 2014
comes into force.”

3 In section 83, for subsection (1A) substitute—

“(1A) In subsection (1) “relevant benefits” means benefits that are—

(a) 25retirement benefits payable to a member, or

(b) benefits payable in respect of a member.

(1AA) This Chapter does not apply to any benefits payable by virtue of
pension credit rights except, in the case of a salary related
occupational pension scheme, to the extent that they involve the

member being credited by the scheme with notional pensionable
service.

(1AB) Where this Chapter applies in relation to a benefit payable by virtue
of a pension credit right, then—

(a) 5if entitlement to the relevant pension credit arose before the
2014 Act commencement date, the benefit is to be treated for
the purposes of sections 84(1) and 84B(1) as attributable to
pensionable service before that date;

(b) if entitlement to the relevant pension credit arose on or after
10the 2014 Act commencement date, the benefit is to be treated
for the purposes of sections 84(1) and 84B(1) as attributable to
pensionable service on or after that date.

(1AC) “Pension credit rights” means rights that are attributable (directly or
indirectly) to a pension credit.”

4 15For section 84 substitute—

“84 Old basis of revaluation: occupational pension schemes

(1) A benefit of the kind mentioned in section 83(1)(a) must be revalued
in accordance with this section if it is attributable to pensionable
service before the 2014 Act commencement date.

(2) 20The benefit must be revalued using the final salary method unless it
is—

(a) a money purchase benefit (see subsection (3)),

(b) an average salary benefit revalued in accordance with
subsection (4), or

(c) 25a flat rate benefit revalued in accordance with subsection (5).

(3) If the benefit is a money purchase benefit it must be revalued using
the money purchase method.

(4) If the benefit is an average salary benefit it must be revalued using
the average salary method if the trustees or managers of the scheme
30consider the average salary method to be more appropriate than the
final salary method.

(5) If the benefit is a flat rate benefit it must be revalued using the default
method if the trustees or managers of the scheme consider the
default method to be more appropriate than the final salary method.

84A 35Old basis of revaluation: personal pension schemes

(1) A benefit of the kind mentioned in section 83(1)(b) must be revalued
in accordance with this section if it is attributable to contributions
received before the 2014 Act commencement date.

(2) The benefit must be revalued using the money purchase method.

84B 40New basis of revaluation: occupational pension schemes

(1) A benefit of the kind mentioned in section 83(1)(a) that is a collective
benefit must be revalued using the default method.

(2) A benefit of the kind mentioned in section 83(1)(a) that is not a
collective benefit must be revalued in accordance with the following

provisions of this section if it is attributable to pensionable service on
or after the 2014 Act commencement date.

(3) The benefit must be revalued using the default method unless it is—

(a) a money purchase benefit (see subsection (4)),

(b) 5a salary related benefit (see subsections (5) and (6)), or

(c) a flat rate benefit revalued in accordance with subsection (7).

(4) If the benefit is a money purchase benefit it must be revalued using
the money purchase method.

(5) If the benefit is a salary related benefit it must be revalued using the
10final salary method unless it is revalued in accordance with
subsection (6).

(6) If the benefit is an average salary benefit it must be revalued using
the average salary method if the trustees or managers of the scheme
consider the average salary method to be more appropriate than the
15final salary method.

(7) If the benefit is a flat rate benefit it must be revalued using the final
salary method if the trustees or managers of the scheme consider the
final salary method to be more appropriate than the default method.

84C New basis of revaluation: personal pension schemes

(1) 20A benefit of the kind mentioned in section 83(1)(b) must be revalued
in accordance with this section if it is attributable to contributions
received on or after the 2014 Act commencement date.

(2) The benefit must be revalued using the default method unless it is a
money purchase benefit.

(3) 25If the benefit is a money purchase benefit it must be revalued using
the money purchase method.

84D Hybrid benefits

(1) This section modifies the revaluation requirements in this Chapter in
relation to hybrid benefits.

(2) 30“Hybrid benefit” means a benefit the rate or amount of which
depends on which of two or more alternative methods of calculation
produces the highest, or lowest, rate or amount.

(3) For hybrid benefits—

(a) first, calculate the benefit using each of those methods and
35revalue in accordance with this Chapter, and

(b) then, determine which method of calculation produces the
highest, or lowest, rate or amount.

84E Revaluation by other methods: general

The fact that an occupational pension scheme provides for the
40amount of the pension or other benefit for a member or for any other
person in respect of the member to be increased during the pre-
pension period—

(a) by the percentages specified during that period under
section 151(1) of the Social Security Administration Act 1992

(directions specifying percentage increases for up-rating
purposes), or

(b) under any arrangement which, in the opinion of the Secretary
of State, maintains the value of the pension or other benefit by
5reference to the rise in the general level of prices in Great
Britain during that period,

does not in itself result in conflict with section 84 or 84B, if the
increase falls to be determined by reference to an amount from which
the guaranteed minimum for a member or a member’s widow,
10widower, surviving same sex spouse or surviving civil partner has
not been deducted.

84F Revaluation by other methods: transitional protection in certain cases

(1) This section applies to a scheme which, before the 2014 Act
commencement date, provided for any description of benefits to
15which this Chapter applies to be revalued by a method that the
scheme was allowed to use under subsection (3A) or (3B) of old
section 84.

(2) The scheme may continue to use that method of revaluation in
relation to that description of benefits for so long as it continues to
20contain that provision.

(3) In subsection (1), “the old section 84” means section 84 as it had effect
immediately before the substitution made by Schedule 1 to the
Pension Schemes Act 2014.”

5 After section 85 insert—

“85A 25Power to add revaluation methods for personal pension schemes

(1) Regulations may make provision enabling or requiring benefits of
the kind mentioned in section 83(1)(b) to be revalued by the average
salary or final salary method in specified cases.

(2) Regulations under this section—

(a) 30may amend this Chapter (and may, in particular, amend the
average salary or final salary method as applied in relation to
benefits of the kind mentioned in section 83(1)(b));

(b) may not change the revaluation method to be used for a
benefit the right to which has already accrued.”

6 35After section 86 insert—

“86A The revaluation methods

The revaluation methods referred to in this Chapter are defined by
the provisions listed in the table.

86B Definitions of benefits referred to in this Chapter

(1) In this Chapter—

• 5“average salary benefit” means a benefit under an occupational
  pension scheme the rate or amount of which is calculated by
  reference to the member’s average salary over the period of
  service to which the benefit relates;

• “final salary benefit” means a benefit under an occupational
  10pension scheme that is calculated by reference to the
  member’s pensionable earnings, or highest, average or
  representative pensionable earnings, in a specified period
  ending at, or defined by reference to, the time when the
  member’s pensionable service in relation to that scheme
  15ends;

• “flat rate benefit” means a benefit under an occupational
  pension scheme the rate or amount of which is calculated by
  reference solely to the member’s length of service;

• “salary related benefit” means a benefit under an occupational
  20pension scheme the rate or amount of which is calculated by
  reference to the salary of the member.

(2) In subsection (1) “pensionable earnings”, in relation to a pension
scheme and a member of it, means earnings by reference to which
benefits under the scheme are calculated.”

7 25In section 186(3) (statutory instruments subject to affirmative procedure),
after paragraph (b) insert—

“(ba) regulations under section 85A, or”.

8 In Schedule 3 to that Act (revaluation methods), before paragraph 1 insert—

“The default method

A1 30The default method is to revalue the benefits in any way in which
they would have been revalued if—

(a) in the case of an occupational pension scheme, the
member’s pensionable service had not terminated, or

(b) in the case of a personal pension scheme, contributions in
35respect of the member had not ceased to be paid.”

9 Omit paragraphs 3A and 4 of that Schedule.

10 In paragraph 5(1) of that Schedule, for “if his pensionable service had not
terminated” substitute “if—

(a) in the case of an occupational pension scheme, the member’s
40pensionable service had not terminated, or

(b) in the case of a personal pension scheme, contributions in respect of
the member had not ceased to be paid.”

11 Omit the following, which are no longer needed given the earlier provisions
of this Schedule—

(a) paragraph 31(3) of Schedule 12 to the Welfare Reform and Pensions
Act 1999;

(b) section 19(1) to (3) of the Pensions Act 2011.

Section 35

SCHEDULE 2 5Early leavers: transfer values

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

2 (1) Section 93 (scope of Chapter 4) is amended as follows.

(2) In subsection (1A), in the opening words, for “this section and the following
10provisions of this Chapter” substitute “subsection (1)(a)”.

(3) In subsection (1B)(b) omit “occupational pension”.

3 (1) Section 93A (salary related schemes: right to statement of entitlement) is
amended as follows.

(2) For subsection (1) substitute—

“(1) 15This section applies to an occupational pension scheme or a personal
pension scheme that is—

(a) a defined benefits scheme,

(b) a shared risk scheme, or

(c) a defined contributions scheme that is not a scheme under
20which all the benefits that may be provided are money
purchase benefits.

(1ZA) The trustees or managers of a scheme to which this section applies
must, on the application of any member, provide the member with a
statement of entitlement.

(1ZB) 25For the purposes of this Chapter a member’s “statement of
entitlement” is—

(a) in the case of an occupational pension scheme, a written
statement of the amount of the cash equivalent at the
guarantee date of any benefits which have accrued to or in
30respect of the member under the applicable rules;

(b) in the case of a personal pension scheme, a written statement
of the amount of the cash equivalent at the guarantee date of
any benefits which have accrued to or in respect of the
member under the rules of the scheme.”

(3) 35In subsection (1A), for “(1)” substitute “(1ZB)”.

(4) In subsection (4), after “in the case of any” insert “occupational pension”.

(5) In the heading, for “Salary related schemes” substitute “Schemes with a
promise or target”.

4 (1) Section 94 (right to cash equivalent) is amended as follows.

(2) For subsection (1) substitute—

“(1) Subject to the following provisions of this Chapter—

(a) a member of a scheme to which section 93A applies who—

(i) has received a statement of entitlement under that
5section, and

(ii) has made a relevant application within three months
beginning with the guarantee date in respect of the
statement,

acquires a right to the guaranteed cash equivalent;

(a)
10a member of an occupational pension scheme to which
section 93A does not apply acquires a right, when the
member’s pensionable service terminates (whether before or
after 1 January 1986), to the cash equivalent at the relevant
date of any benefits which have accrued to or in respect of the
15member under the applicable rules;

(c) a member of a personal pension scheme to which section 93A
does not apply acquires a right to the cash equivalent at the
relevant date of any benefits which have accrued to or in
respect of the member under the rules of the scheme.”

(3) 20In subsection (1A), for “(1)(aa)” substitute “(1)(a)”.

(4) In subsection (2A)—

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

“(x) regulations made under Part 2 of the Pension
Schemes Act 2014;”;

(b) 25in paragraph (b), after sub-paragraph (vii) insert—

“(viii) regulations made under section 28 of the Pension
Schemes Act 2014.”

(5) For subsection (3) substitute—

“(3) Regulations may provide that, in prescribed circumstances—

(a) 30subsection (1)(a) applies to members of a prescribed scheme,
or schemes of a prescribed description, with prescribed
modifications;

(b) subsection (1)(b) or (c) applies to members of a prescribed
scheme, or schemes of a prescribed description, instead of
35subsection (1)(a).”

5 In section 95 (ways of taking right to cash equivalent), in subsection (1), omit
“paragraph (a), (aa) or (b) of”.

6 (1) Section 97 (calculation of cash equivalents) is amended as follows.

(2) In subsection (2)(a), in the opening words, for “except guaranteed cash
40equivalents” substitute “for the purposes of section 94(1)(b) and (c)”.

(3) In subsection (2)(aa), for “, including a guaranteed cash equivalent,”
substitute “(acquired by virtue of section 94(1)(a), (b) or (c))”.

(4) In subsection (3A)(a)—

(a) for “salary related occupational pension scheme” substitute “scheme
45to which section 93A applies”;

(b) for “section 93A)” substitute “that section)”.