Session 2010 - 12
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Other Bills before Parliament


 
 

5

 
 

“23    

Test scheme

 

(1)    

A test scheme is an occupational pension scheme which satisfies—

 

(a)    

the requirement in subsection (2),

 

(b)    

the requirement in subsection (4) or requirements

 

prescribed under subsection (6) (as appropriate), and

 

(c)    

any further requirements that are prescribed.

 

(2)    

The scheme must either—

 

(a)    

provide for a member to be entitled to a pension

 

commencing at the appropriate age and continuing for life,

 

or

 

(b)    

provide for a sum of money to be made available for the

 

provision of benefits to a member commencing at the

 

appropriate age and continuing for life.

 

(3)    

The appropriate age is 65 or any higher age prescribed.

 

(4)    

In the case of a scheme that provides entitlement to a pension as

 

mentioned in subsection (2)(a), the annual rate of the pension at the

 

appropriate age must be—

 

(a)    

1/120th of average qualifying earnings in the last three tax

 

years preceding the end of pensionable service,

 

multiplied by

 

(b)    

the number of years of pensionable service, up to a

 

maximum of 40.

 

(5)    

Section 13(1) (qualifying earnings) applies for the purposes of

 

subsection (4) as if the reference to a pay reference period were a

 

reference to a tax year.

 

(6)    

In the case of a scheme that provides for a sum of money to be made

 

available as mentioned in subsection (2)(b), regulations must

 

prescribe requirements relating to that sum.””

Clause 10

13

Page 8, line 25, leave out subsection (2) and insert—

 

“(2)    

For the heading substitute “Certification that quality requirement or

 

alternative requirement is satisfied””

After Clause 10

14

Insert the following new Clause—

 

“Certification for non-UK schemes

 

(1)    

Section 28 of the 2008 Act is amended as follows.

 

(2)    

After subsection (3) insert—

 

“(3A)    

This section also applies to—

 

(a)    

a money purchase scheme that is an occupational pension

 

scheme within section 18(b);

 
 

 
 

6

 
 

(b)    

a personal pension scheme of a prescribed description for

 

which provision is made under section 27;

 

(c)    

a hybrid scheme that is an occupational pension scheme

 

within section 18(b), to the extent prescribed.”

 

(3)    

In subsection (4) at the end insert—

 

“(d)    

for a scheme within subsection (3A), means a prescribed

 

requirement.”

 

(4)    

In paragraphs (e) and (f) of subsection (6) for “section 26 agreements”

 

substitute “contribution agreements”.

 

(5)    

In subsection (8)—

 

(a)    

for ““section 26 agreements” means the agreement” substitute

 

““contribution agreements” means—

 

(a)    

the agreement”;

 

(b)    

at the end insert “, or

 

(b)    

any agreement of the same or a similar kind that is

 

required, in the case of a scheme within subsection

 

(3A)(b), by regulations under section 27.””

Clause 12

15

Page 10, line 5, leave out “In section 30(5) of the 2008 Act” and insert—

 

“( )    

Section 30 of the 2008 Act is amended as follows.

 

( )    

In subsection (5)”

16

Page 10, line 6, at end insert—

 

“( )    

In subsection (6)(b) omit “(in accordance with section 20(1))”.”

After Clause 14

17

Insert the following new Clause—

 

“Power to exempt certain cross-border employment from enrolment duty

 

In Part 7 of the Pensions Act 2004 (cross-border activities within European

 

Union) after section 292 insert—

 

“292A

  Exemption from enrolment duty under Part 1 of Pensions Act

 

2008

 

Regulations may provide for section 2(1), 3(2), 5(2), 7(3), 9(2) or 54 of the

 

Pensions Act 2008 (employer’s obligations regarding membership of a

 

qualifying scheme) not to apply in relation to a person’s employment of—

 

(a)    

an individual in relation to whom the person is a European

 

employer, or

 

(b)    

someone whom the person reasonably believes to be such

 

an individual.””

 
 

 
 

7

 

Clause 15

18

Page 10, line 24, at end insert—

 

“( )    

Schedule 3 to the 1993 Act (which sets out methods for revaluing accrued

 

benefits for the purposes of section 84 of the 1993 Act) is amended as

 

follows.

 

( )    

After paragraph 1(4) insert—

 

  “(5)  

The sub-paragraphs above are subject to sub-paragraph (6).

 

      (6)  

If paragraph 2A applies to the pension or other benefit, the final

 

salary method is to apply the requirement of the rules of the

 

scheme mentioned in paragraph 2A(1).”

 

( )    

After paragraph 2 insert—

 

“2A(1)  

This paragraph applies to the pension or other benefit if the rules

 

of the scheme under which it is payable contain a requirement

 

that the accrued benefit be revalued by adding to the accrued

 

benefit an amount of at least the relevant amount.

 

      (2)  

“The accrued benefit” has the same meaning as in paragraph 1.

 

      (3)  

“The relevant amount” means the amount which, ignoring

 

paragraph 1(5) and (6), would be the additional amount specified

 

in paragraph 1(1A), (1B), (1C) or (1D) (as the case may be) were

 

the appropriate higher revaluation percentage and the

 

appropriate lower revaluation percentage to be determined on

 

the following basis.

 

      (4)  

The higher revaluation percentage and the lower revaluation

 

percentage for the revaluation period mentioned in paragraph

 

2(7) are to be taken to be the percentages which would have been

 

specified in the Secretary of State’s order—

 

(a)    

had the following been substituted for paragraph

 

2(3)(a)—

 

“(a)    

the percentage increase in the retail prices

 

index for the reference period in relation to the

 

revaluation period (“the inflation percentage”),

 

and”,

 

(b)    

had, in paragraph 2(3A)(a), the words “the percentage

 

which appears to the Secretary of State to be” been

 

omitted,

 

(c)    

had paragraph 2(4) been omitted,

 

(d)    

had, in paragraph 2(5), the words “sub-paragraph (3)(a)”

 

been substituted for “that sub-paragraph”,

 

(e)    

had, in paragraph (b) of the definitions of “the higher

 

maximum rate” and “the lower maximum rate” in

 

paragraph 2(6), the words “retail prices index” been

 

substituted for “general level of prices”, and

 

(f)    

had the following been inserted after paragraph 2(6)—

 

“(6A)  

In this paragraph “retail prices index” means—

 
 

 
 

8

 
 

(a)    

the general index of retail prices (for all items)

 

published by the Statistics Board (or any

 

predecessor), or

 

(b)    

where that index is not published for a month,

 

any substituted index or figures published by

 

the Board (or any predecessor).”””

19

Page 10, line 27, leave out “subsection (4) substitute—” and insert “subsections (3)

 

and (4) substitute—

 

“(3)    

Subsection (2) does not apply to the annual rate of a pension under

 

an occupational pension scheme, or to a part of that rate, if under

 

the rules of the scheme the rate or part is for the time being being

 

increased at intervals of not more than twelve months by at least the

 

relevant percentage.”

20

Page 10, line 33, leave out from beginning to end of line 36 on page 11 and insert—

 

“(4ZA)    

Subsection (2) does not apply to the annual rate of a pension under

 

an occupational pension scheme, or to a part of that rate, if

 

subsection (4ZB) applies to the rate or part.

 

(4ZB)    

Subject to subsection (4ZD), this subsection applies to the rate or

 

part if, under the rules of the scheme, the rate or part is for the time

 

being being increased, and since the relevant time has always been

 

increased, at intervals of not more than twelve months by at least—

 

(a)    

the percentage increase in the retail prices index for the

 

reference period, being a period determined, in relation to

 

each periodic increase, under the rules, or

 

(b)    

if lower, the default percentage for that period.

 

(4ZC)    

In subsection (4ZB) “the relevant time” means—

 

(a)    

the beginning of 2011 or, if later, the time when the pension

 

became a pension in payment, or

 

(b)    

if the pension was transferred to the scheme from another

 

occupational pension scheme as a pension in payment after

 

the beginning of 2011, the time of the transfer.

 

(4ZD)    

If the pension was transferred to the scheme as mentioned in

 

subsection (4ZC)(b), subsection (4ZB) does not apply to the rate or

 

part unless, immediately before the transfer, subsection (4ZB) (read

 

with this subsection if relevant) applied to the rate or part by

 

reference to the scheme from which the pension was transferred (or

 

would have applied had subsection (4ZB) been in force

 

immediately before the transfer).”

21

Page 11, line 39, leave out “(4)” and insert “(3)”

22

Page 11, line 42, leave out “to (4ZD)” and insert “and (4ZB)”

23

Page 11, line 46, leave out “to (4ZD)” and insert “and (4ZB)”

Clause 17

24

Page 13, line 23, after “period” insert “on or after that day”

25

Page 13, line 41, after “(3)(b)” insert “includes a promise that”

 
 

 
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Revised 31 October 2011