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Pensions BillPage 10

15 Pension compensation: annual increases in periodic compensation

(1) In Schedule 7 to the Pensions Act 2004 (pension compensation provisions)

paragraph 28 (annual increase in periodic compensation) is amended as

follows.

(2) 5In sub-paragraph (3) in paragraph (a) of the definition of “appropriate

percentage” for “retail prices index” substitute “general level of prices in Great

Britain”.

(3) After sub-paragraph (3) insert—

(3A) For the purposes of paragraph (a) of the definition of “appropriate

10percentage” in sub-paragraph (3), the Secretary of State may (from

time to time) decide, as the Secretary of State thinks fit, the manner

in which percentage increases in the general level of prices in Great

Britain are to be determined.

(3B) The Secretary of State must publish any decision made under sub-

15paragraph (3A).

(4) In paragraph 37(1) of that Schedule (definitions) omit the definition of “retail

prices index”.

(5) In Schedule 5 to the Pensions Act 2008 (pension compensation payable on

discharge of pension compensation credit) paragraph 17 (annual increase in

20periodic compensation) is amended as follows.

(6) In sub-paragraph (4) in paragraph (a) of the definition of “the appropriate

percentage” for “retail prices index” substitute “general level of prices in Great

Britain”.

(7) After sub-paragraph (4) insert—

(4A) 25For the purposes of paragraph (a) of the definition of “the

appropriate percentage” in sub-paragraph (4), the Secretary of State

may (from time to time) decide, as the Secretary of State thinks fit, the

manner in which percentage increases in the general level of prices

in Great Britain are to be determined.

(4B) 30The Secretary of State must publish any decision made under sub-

paragraph (4A).

16 Indexation requirements for cash balance benefits

(1) Section 51 of the Pensions Act 1995 (annual increase in rate of certain pensions)

is amended as follows.

(2) 35In subsection (1) for “subsection (6)” substitute “subsections (6) and (7)”.

(3) After subsection (6) insert—

(7) This section does not apply to any pension (or part of a pension) under

a relevant occupational pension scheme which—

(a) is a cash balance benefit (see section 51ZB), and

(b) 40first comes into payment on or after the day on which section 16

of the Pensions Act 2011 comes into force.

(8) An occupational pension scheme is a “relevant occupational pension

scheme” if—

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(a) it has not, on or after the appointed day, been contracted-out by

virtue of satisfying section 9(2) of the Pension Schemes Act 1993,

or

(b) it has, on or after the appointed day, been so contracted-out, but

5no person is entitled to receive, or has accrued rights to, benefits

under the scheme attributable to the period when it was so

contracted-out.

(4) After section 51ZA of the Pensions Act 1995 insert—

51ZB Meaning of “cash balance benefit”

(1) 10For the purposes of section 51(7)(a), a pension provided to or in respect

of a member of an occupational pension scheme is a “cash balance

benefit” if conditions 1 and 2 are met.

(2) Condition 1 is that the rate of the pension is calculated by reference to

a sum of money (“the available sum”) which is available under the

15scheme for the provision of benefits to or in respect of the member.

(3) Condition 2 is that under the scheme—

(a) there is a promise about the amount of the available sum, but

(b) there is no promise about the rate or amount of the benefits to

be provided.

(4) 20The promise mentioned in subsection (3)(a) includes in particular a

promise about the change in the value of, or the return from, payments

made under the scheme by the member or by any other person in

respect of the member.

(5) The promise mentioned in subsection (3)(b)

(a) 25includes a promise that the amount of the available sum will be

sufficient to provide benefits of a particular rate or amount;

(b) does not include a promise that the rate or amount of a benefit—

(i) will be a proportion of the rate or amount of another

benefit in relation to which there is no promise about the

30rate or amount, or

(ii) will represent a proportion of the available sum.

Pension Protection Fund

17 Pension Protection Fund

Schedule 4 (which makes provision relating to the Pension Protection Fund)

35has effect.

Financial assistance scheme

18 Financial assistance scheme: amount of payments

(1) In section 286 of the Pensions Act 2004 (financial assistance scheme) after

subsection (1B) insert—

(1C) 40Regulations under subsection (1) may prescribe circumstances in which

subsection (1A) does not apply.

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(2) In section 18 of the Pensions Act 2007 (financial assistance scheme: increased

levels of payments) after subsection (9) insert—

(9A) The Secretary of State may by regulations—

(a) prescribe circumstances in which subsections (5) and (6) do not

5apply where the scheme manager has made a determination as

specified in subsection (4), and

(b) make alternative provision for the amount of any initial

payment payable to the member or the survivor of the member

in those circumstances,

10and, accordingly, subsection (8) does not apply in those

circumstances.

(3) In that section in subsection (10) (affirmative resolution procedure) after

“subsection (9)” insert “or (9A)”.

19 Financial assistance scheme: transfer of assets

15In section 286 of the Pensions Act 2004 (financial assistance scheme) in

subsection (3)(c) (power to make provision for property, rights and liabilities

of qualifying pension schemes to be transferred to the scheme manager) for

“the scheme manager” substitute “a prescribed person”.

Miscellaneous

20 20Payment of surplus to employer: transitional power to amend scheme

(1) Section 251 of the Pensions Act 2004 (payment of surplus to employer:

transitional power to amend scheme) is amended as follows.

(2) In subsection (1) after “scheme” insert—

(a) which is one to which section 37 of the Pensions Act 1995

25applies, and

(b).

(3) After subsection (2) insert—

(2A) But subsection (2) does not apply in the case of any of the payments

listed in paragraphs (c) to (f) of section 175 of the Finance Act 2004

30(authorised employer payments other than public service scheme

payments or authorised surplus payments).

(4) In subsection (3) for “then applied” substitute “applied immediately before the

commencement of section 250”.

(5) In subsection (6)—

(a) 35after paragraph (a) insert—

(aa) may be exercised even if the payments to which it relates

are, to any extent, payments to which subsection (2)

does not apply,;

(b) in paragraph (b) for “only be exercised once” insert “be exercised, after

40the commencement of section 20 of the Pensions Act 2011, only once

(whether or not also exercised before 6 April 2011)”;

(c) in paragraph (c) for “five years after the commencement of this section”

substitute “on 6 April 2016”.

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(6) After subsection (6) insert—

(6A) A resolution passed under this section after the commencement of

section 20 of the Pensions Act 2011 may amend or revoke a resolution

passed under this section before 6 April 2011.

(7) 5The amendments made by this section do not affect the continued operation of

any resolution passed under section 251(3) or (4) of the 2004 Act before

6 April 2011.

21 Contribution notices and financial support directions

(1) Section 38 of the Pensions Act 2004 (contribution notices where avoidance of

10employer debt) is amended as follows.

(2) In subsections (5)(c)(i) and (6)(b)(ii) for “determination by the Regulator to

exercise the power to issue” substitute “giving of a warning notice in respect

of”.

(3) After subsection (13) insert—

(14) 15In this section “a warning notice” means a notice given as mentioned in

section 96(2)(a).

(4) Section 43 of the Pensions Act 2004 (financial support directions) is amended

as follows.

(5) In subsection (9) for “determination by the Regulator to exercise the power to

20issue” substitute “giving of a warning notice in respect of”.

(6) After subsection (11) insert—

(12) In this section “a warning notice” means a notice given as mentioned in

section 96(2)(a).

(7) In section 96 of the Pensions Act 2004 (exercise of regulatory functions:

25standard procedure) after subsection (6) insert—

(6A) Subsection (6B) applies in relation to a warning notice given to a

person—

(a) in respect of a contribution notice under section 38, or

(b) in respect of a financial support direction under section 43.

(6B) 30Regulations may provide that no determination notice in respect of the

contribution notice or the financial support direction may be given after

the end of the prescribed period beginning with the day on which the

warning notice is given.

22 Technical amendment to Schedule 4 to the Pensions Act 2007

35In Schedule 4 to the Pensions Act 2007 (abolition of contracting-out for defined

contribution pension schemes) in paragraph 60(4) for paragraphs (b) and (c)

substitute—

(b) in the definition of “the percentage for contributing

earners”—

(i) 40omit the words “(a) in relation to a salary related

contracted-out scheme,”;

(ii) omit paragraph (b) and the preceding “and”;

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(c) in the definition of “the percentage for non-contributing

earners”—

(i) omit the words “(a) in relation to a salary related

contracted-out scheme,”;

(ii) 5omit paragraph (b) and the preceding “and”.

23 Technical amendment to section 42(6) of the Pension Schemes Act 1993

(1) In section 42 of the Pension Schemes Act 1993 (review and alteration of rates of

contributions applicable under section 41) in subsection (6) for “paragraph

2(3)” substitute “the definition of “the percentage for contributing earners” or

10“the percentage for non-contributing earners” in paragraph 2(5)”.

(2) After that subsection insert—

(7) Until paragraph 60(4) of Schedule 4 to the Pensions Act 2007 comes into

force, subsection (6) has effect as if the reference to the definition of “the

percentage for contributing earners” or “the percentage for non-

15contributing earners” were a reference to paragraph (a) of either of

those definitions.

Part 4 Judicial pensions

24 Contributions towards cost of judicial pensions etc

(1) 20After section 9 of the Judicial Pensions and Retirement Act 1993 insert—

Contributions

9A Contributions towards cost of judicial pension etc

(1) The appropriate Minister may, by regulations made with the

concurrence of the Treasury, make provision for and in connection with

25requiring contributions to be made towards the cost of the liability for

relevant benefits.

(2) The prescribed contributions are to be—

(a) made by the person to or in respect of whom the relevant

benefits are to be, or may be, provided;

(b) 30made for the person’s period of service in qualifying judicial

office;

(c) in the form of deductions from the salary payable for that

service.

(3) But no contribution is to be made by a person—

(a) 35for any period of service during which an election under

section 13 is in force in respect of the person;

(b) for any period of service after the person has completed, in the

aggregate, 20 years’ service in qualifying judicial office;

(c) for any other prescribed period of service;

(d) 40in any prescribed circumstances.

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(4) For the purposes of subsection (3)(b), it does not matter whether the

person’s service in qualifying judicial office was service before or after

the commencement of section 24(1) of the Pensions Act 2011 (but no

contribution is to be made for a person’s service before that

5commencement).

(5) In this section—

(2) 15Schedule 5 (which makes provision for contributions towards the cost of

certain other judicial pensions etc) has effect.

Part 5 Miscellaneous and general

Miscellaneous

25 20Grants by the Secretary of State to advisory bodies etc

(1) Section 174 of the Pension Schemes Act 1993 (grants by the Pensions Regulator

to advisory bodies etc) is amended as follows.

(2) After subsection (2) insert—

(3) The Secretary of State may make grants on such terms and conditions

25as the Secretary of State thinks fit to any person or body of persons

providing advice or assistance, or carrying out other prescribed

functions, in connection with occupational or personal pensions.

(3) For the heading substitute “Grants to advisory bodies etc”.

26 Service of documents and electronic working

(1) 30After section 144 of the Pensions Act 2008 insert—

144A Service of documents and electronic working

In sections 303 to 305 of the Pensions Act 2004 (service of documents

and electronic working) references to that Act are to be treated as

including references to the following provisions of this Act—

(2) In section 60 of that Act (requirement to keep records) in subsection (1)(c) for

“, on request, to the Regulator” substitute “to the Regulator on receiving a

40notification requesting them”.

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(3) In section 150 of that Act (extent) in subsection (2)(f) for “143 to 146” substitute

“143, 144, 145 and 146”.

General

27 Extent

5An amendment or repeal by this Act has the same extent as the enactment

amended or repealed.

28 Commencement

(1) Any provision of Part 2 that amends another Act so as—

(a) to modify a power to make an order or regulations, or

(b) 10to confer any such power,

comes into force, for the purposes of the exercise of the power, on the day on

which this Act is passed.

(2) The following provisions of this Act come into force on that day—

(a) section 27;

(b) 15this section;

(c) section 29.

(3) The following provisions of this Act come into force at the end of the period of

2 months beginning with that day—

(a) section 1 (and Schedule 1);

(b) 20section 20;

(c) section 22;

(d) section 23.

(4) The other provisions of this Act come into force in accordance with provision

made by order by the Secretary of State.

(5) 25An order under subsection (4) may appoint different days for different

purposes.

(6) The Secretary of State may by order make transitional, transitory or saving

provision in connection with the coming into force of any provision of this Act.

(7) An order under subsection (4) or (6) is to be made by statutory instrument.

29 30Short title

This Act may be cited as the Pensions Act 2011.

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SCHEDULES

Section 1

SCHEDULE 1 Equalisation of and increase in pensionable age for men and women:

consequential amendments

5Gas Act 1986 (c. 44)1986 (c. 44)

1 In section 48 of the Gas Act 1986 (interpretation of Part 1) in subsection

(2B)(b) for “6th April 1955” substitute “6th December 1953”.

Social Security Administration Act 1992 (c. 5)1992 (c. 5)

2 The Social Security Administration Act 1992 is amended as follows.

3 10In section 2A (claim or full entitlement to certain benefits conditional on

work-focused interview) in subsection (1A) for “6 April 1955” substitute “6

December 1953”.

4 In section 2AA (full entitlement to certain benefits conditional on work-

focused interview for partner) in subsection (1A) for “6 April 1955”

15substitute “6 December 1953”.

5 In section 2D (work-related activity) in subsection (9)(e) for “6 April 1955”

substitute “6 December 1953”.

Pensions Act 1995 (c. 26)1995 (c. 26)

6 In section 126 of the Pensions Act 1995 (equalisation of and increase in

20pensionable age etc) in paragraph (a) for the words from “progressively”

(where it appears first) to the end of the paragraph substitute “and then to

increase it”.

Consumers, Estate Agents and Redress Act 2007 (c. 17)2007 (c. 17)

7 In section 6 of the Consumers, Estate Agents and Redress Act 2007 (general

25provision about functions of National Consumer Council) in subsection

(10)(b) for “6 April 1955” substitute “6 December 1953”.

Pensions Act 2007 (c. 22)2007 (c. 22)

8 The Pensions Act 2007 is amended as follows.

9 In section 13 (increase in pensionable age for men and women)—

(a) 30in subsection (1) omit from “progressively” to the end;

(b) in subsection (3) for “6th April 2024” substitute “6th December 2018”.

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10 In Schedule 3 (increase in pensionable age for men and women) omit

paragraph 4(4).

Section 2

SCHEDULE 2 Abolition of certain additions to the state pension: consequential

5amendments etc

Social Security Contributions and Benefits Act 1992 (c. 4)1992 (c. 4)

1 The Social Security Contributions and Benefits Act 1992 is amended as

follows.

2 In section 55 (pension increase or lump sum where entitlement to retirement

10pension is deferred) in subsection (2) for “paragraphs 4 to 7 make” substitute

“paragraph 4 makes”.

3 (1) Schedule 5 (pension increase or lump sum where entitlement to retirement

pension is deferred) is amended as follows.

(2) Omit paragraph A1(4).

(3) 15In paragraph 2(5)(a) omit “, 5, 5A, 6 or 6A”.

(4) Omit paragraph 2A.

(5) In paragraph 3B(5)(b)(i) omit “or paragraphs 5 to 6A of this Schedule”.

(6) Omit paragraph 3C(5).

(7) In paragraph 4(1A) after “6A” (in each place) insert “(as those provisions

20have effect by virtue of section 2(7) of the Pensions Act 2011)”.

(8) In paragraph 7B(5)(b)(i) after “Schedule” insert “(as those provisions have

effect by virtue of section 2(7) of the Pensions Act 2011)”.

Repeals of spent enactments

4 The following provisions are repealed—

(a) 25paragraph 40 of Schedule 1 to the Social Security (Incapacity for

Work) Act 1994;

(b) paragraph 21(15) and (16) of Schedule 4 to the Pensions Act 1995;

(c) paragraph 7 of Schedule 11 to the Pensions Act 2004;

(d) paragraph 20 of Schedule 1 to the Pensions Act 2007.

Section 3

30SCHEDULE 3 Consolidation of additional pension

Social Security Contributions and Benefits Act 1992 (c. 4)1992 (c. 4)

1 The Social Security Contributions and Benefits Act 1992 is amended as

follows.

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2 (1) Section 45 (the additional pension in a Category A retirement pension) is

amended as follows.

(2) In subsection (2) (as amended by section 102(3) of the Pensions Act 2008) for

“6th April 2020” substitute “a date specified for the purposes of this

5subsection by order (“the specified date”)”.

(3) In subsection (2A) (as inserted by section 102(4) of the Pensions Act 2008)—

(a) in the opening words for “a tax year after 5th April 2020” substitute

“the tax year beginning with the specified date or a subsequent tax

year”;

(b) 10in paragraph (a) for “flat rate introduction” substitute “additional

pension consolidation”;

(c) for paragraph (b) substitute—

(b) in relation to the additional pension consolidation

year and subsequent years, the weekly equivalent of

15the amount calculated in accordance with

Schedule 4B to this Act.

3 In section 46 (modifications of section 45 for calculating the additional

pension in certain benefits) in subsection (5)(a) (as inserted by paragraph

6(3) of Schedule 4 to the Pensions Act 2008) for “6th April 2020” substitute “a

20date specified for the purposes of this subsection by order (“the specified

date”)”.

4 In section 122(1) (interpretation of Parts 1 to 6) insert at the appropriate

place—

5 (1) Section 176 (Parliamentary control) is amended as follows.

(2) After subsection (3) insert—

(3A) Subsection (3) above does not apply to a statutory instrument by

reason only that it contains an order under section 45(2).

(3) 30In subsection (4) after “flat rate introduction year” insert “or the additional

pension consolidation year”.

6 (1) Schedule 4B (additional pension: accrual rates for purposes of section

45(2)(d)) is amended as follows.

(2) In paragraph 1—

(a) 35in sub-paragraph (1) in the opening words after “45(2)(d)” insert “or

(2A)(b)”;

(b) in sub-paragraphs (1)(a) and (b) and (2) after “45(2)(d)” insert “or

(2A)(b) (as the case may be)”.

(3) In paragraph 11 after “45(2)(d)” insert “or (2A)(b)”.

7 (1) 40Schedule 4C (additional pension: calculation of revalued consolidated

amount) (as inserted by Schedule 3 to the Pensions Act 2008) is amended as

follows.

(2) In paragraphs 1 and 2 for “flat rate introduction” substitute “additional

pension consolidation”.

(3) 45Omit paragraph 3.

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