Public Service Pensions Bill (HL Bill 77)

(2) The Secretary of State may by order make—

(a) provision consequential on Schedule 4, and

(b) further provision for, or in connection with, the regulation of public
service pension schemes within the meaning of the Pensions Act 2004
5(as amended by that Schedule).

(3) The provision referred to in subsection (2) includes provision made by
amending any legislation (including this Act).

(4) An order under this section may make different provision for different
purposes.

(5) 10An order under this section is subject to—

(a) the affirmative procedure, if it amends primary legislation, and

(b) the negative procedure, in any other case.

Transitional

18 Restriction of existing pension schemes

(1) 15No benefits are to be provided under an existing scheme to or in respect of a
person in relation to the person’s service after the closing date.

(2) In this Act “existing scheme” means a scheme listed in Schedule 5 (whether
made before or after this section comes into force).

(3) Subsection (1) does not apply—

(a) 20in relation to an existing scheme which is a defined contributions
scheme;

(b) to benefits excepted by Schedule 5 (injury and compensation benefits).

(4) The closing date is—

(a) 31 March 2014 for an existing scheme which is a relevant local
25government scheme, and

(b) 31 March 2015 in any other case.

This is subject to subsection (7).

(5) Scheme regulations may provide for exceptions to subsection (1) in the case
of—

(a) 30persons who were members of an existing scheme, or who were eligible
to be members of such a scheme, immediately before 1 April 2012, and

(b) such other persons as the regulations may specify, being persons who
before that date had ceased to be members of an existing scheme or to
be eligible for membership of such a scheme.

(6) 35Exceptions under subsection (5) may, in particular, be framed by reference to
the satisfaction of a specified condition (for example, the attainment of normal
pension age under the existing scheme or another specified age) before a
specified date.

(7) Where an exception to subsection (1) is framed by reference to the satisfaction
40of a specified condition before a specified date, scheme regulations may also
provide for a different closing date for persons in whose case the condition—

(a) is not satisfied before the specified date, but

(b) is satisfied no more than 4 years after that date.

(8) Provision made under subsection (5) or (7) may in particular be made by
amending the relevant existing scheme.

(9) In subsection (1), the reference to benefits in relation to a person’s service
includes benefits relating to the person’s death in service.

(10) 5In subsection (4), “relevant local government scheme” means regulations
under section 7 of the Superannuation Act 1972 which relate to persons in
England and Wales.

19 Closure of existing injury and compensation schemes

(1) Scheme regulations for a scheme under section 1 may secure that no benefits
10are to be provided under a scheme listed in Schedule 6 that is connected with it.

(2) Where Schedule 6 specifies particular benefits in relation to a scheme, the
power under subsection (1) is exercisable only in relation to those benefits.

(3) Scheme regulations may provide for exceptions to subsection (1).

(4) Provision made under this section may in particular be made by amending the
15connected scheme.

20 Final salary link

Schedule 7 contains provision for a “final salary link” in relation to schemes to
which section 18(1) applies (and see section 30(14)).

Procedure for scheme regulations

21 20Consultation

(1) Before making scheme regulations the responsible authority must consult such
persons (or representatives of such persons) as appear to the authority likely to
be affected by them.

(2) The responsible authority must publish a statement indicating the persons that
25the authority would normally expect to consult under subsection (1) (and keep
the statement up-to-date).

(3) Subsection (1) may be satisfied by consultation before, as well as by
consultation after, the coming into force of this section.

22 Consultation and report

(1) 30This section applies where—

(a) after the coming into force of scheme regulations establishing a scheme
under section 1, the responsible authority proposes to make further
scheme regulations containing provision changing the protected
elements of the scheme within the protected period, or

(b) 35the responsible authority proposes to make scheme regulations
containing retrospective provision which appears to the responsible
authority to have significant adverse effects in relation to members of
the scheme.

(2) The responsible authority must—

(a) consult the persons specified in subsection (3) with a view to reaching
agreement with them, and

(b) lay a report before the appropriate legislature.

(3) The persons referred to in subsection (2)(a) are the persons (or representatives
5of the persons) who appear to the responsible authority to be likely to be
affected by the regulations if they were made.

(4) In the case referred to in subsection (1)(a), the report under subsection (2)(b)
must set out why the responsible authority proposes to make the regulations,
having regard to the desirability of not making a change to the protected
10elements of a scheme under section 1 within the protected period.

(5) In this section—

• “the appropriate legislature” means—

  (a)

  Parliament, where the responsible authority is the Secretary of
  State or the Minister for the Civil Service;

  (b)

  15the Scottish Parliament, where the responsible authority is the
  Scottish Ministers;

  (c)

  the National Assembly for Wales, where the responsible
  authority is the Welsh Ministers;

• “protected period” means the period beginning with the coming into force
  20of this section and ending with 31 March 2040;

• “protected elements”, in relation to a scheme under section 1, means—

  (a)

  the extent to which the scheme is a career average revalued
  earnings scheme;

  (b)

  members’ contribution rates under the scheme;

  (c)

  25benefit accrual rates under the scheme.

(6) In this section, references to a change to the protected elements do not include
a change appearing to the responsible authority to be required by or
consequential upon section 12 (employer cost cap).

(7) In a case where this section applies, there is no requirement to consult under
30section 21(1).

23 Other procedure

(1) Scheme regulations are subject to the affirmative procedure if—

(a) they amend primary legislation, or

(b) they contain retrospective provision which appears to the responsible
35authority to have significant adverse effects in relation to members of
the scheme.

(2) Scheme regulations are subject to the negative procedure in any other case.

(3) If scheme regulations otherwise subject to the negative procedure are
combined with scheme regulations subject to the affirmative procedure, the
40combined regulations are subject to the affirmative procedure.

New schemes: supplementary

24 Extension of schemes

(1) Scheme regulations for a scheme under section 1 may make provision for the
payment of pensions and other benefits to or in respect of—

(a) 5persons who are specified in section 1(2), but

(b) in relation to whom the responsible authority could not otherwise
make a scheme under section 1.

(2) Scheme regulations for a scheme under section 1 may make provision to deem
persons of any description to fall within a given description of persons
10specified in section 1(2).

(3) Scheme regulations for a scheme under section 1 may specify persons, not
being persons specified in section 1(2), as persons to whom the scheme may
potentially relate.

(4) The persons specified under subsection (3) may be any persons (other than
15persons specified in section 1(2)) that the responsible authority considers
appropriate.

(5) The responsible authority may then at any time determine that the scheme is
to relate to some or all of those persons.

(6) By virtue of such a determination the provisions of the scheme regulations for
20the payment of pensions and other benefits then apply in relation to the
persons to whom the determination relates.

(7) Subsection (6) is subject to any special provision made in the scheme
regulations for the persons in question.

(8) The responsible authority for a scheme under section 1 must publish a list of
25the persons to whom the scheme relates by virtue of determinations under
subsection (5) (and keep the published list up-to-date).

(9) A determination under subsection (5) may have retrospective effect.

25 Non-scheme benefits

The scheme manager or employer for a scheme under section 1 may make such
30payments as the scheme manager or employer considers appropriate towards
the provision, otherwise than by virtue of the scheme, of pensions and other
benefits to or in respect of persons to whom the scheme relates.

26 Consequential and minor amendments

Schedule 8 contains consequential and minor amendments.

35Existing schemes: supplementary

27 Existing local government schemes

(1) This section applies in relation to regulations under section 7 of the
Superannuation Act 1972 which relate to persons in England and Wales which
are in force immediately before the coming into force of this section.

(2) To the extent that—

(a) such regulations make provision for the payment of pensions and other
benefits to or in respect of a person in relation to the person’s service on
or after 1 April 2014, and

(b) 5that provision could be made under scheme regulations,

the regulations are to have effect as if they were scheme regulations relating to
local government workers in England and Wales.

(3) Accordingly, to that extent a scheme under such regulations is to have effect as
a scheme under section 1.

28 10Existing schemes for civil servants: extension of access

Schedule 9 amends the Superannuation Act 1972 so as to extend access to
schemes under section 1 of that Act (schemes as respects civil servants, etc).

Public body pension schemes

29 New public body pension schemes

(1) 15The following provisions of this Act apply in relation to a new public body
pension scheme (and any statutory pension scheme that is connected with it)
as to a scheme under section 1 (and any connected scheme)—

(a) section 3(1) and (2) and Schedule 3 (scheme regulations);

(b) section 4 (scheme manager);

(c) 20sections 5 and 6 (pension board), if the scheme has more than one
member;

(d) sections 8 to 10 (scheme design);

(e) sections 11 and 12 (cost control);

(f) sections 14 to 16 (information and records).

(2) 25For the purposes of subsection (1), the provisions referred to in that subsection
are to be read with the following modifications—

(a) references to scheme regulations are to be read as references to the rules
of the scheme;

(b) references to the responsible authority are to be read as references to the
30public authority which established the scheme.

(3) A new public body pension scheme, and any variation to the rules of the
scheme, requires the consent of the Treasury.

(4) This section does not apply to a new public body pension scheme which relates
to a devolved body or office.

(5) 35In this Act—

• “public body pension scheme” means a scheme (other than an existing
  scheme) established by a public authority for the payment of pensions
  and other benefits to or in respect of members or staff of a statutory
  body or the holder of a statutory office;

• 40“new public body pension scheme” means a public body pension scheme
  established after the coming into force of this section.

30 Restriction of certain existing public body pension schemes

(1) This section applies to a public body pension scheme which relates to members
or staff of a body, or the holder of an office, listed in Schedule 10.

(2) The public authority responsible for the scheme must make provision to secure
5that no benefits are provided under the scheme to or in respect of a person in
relation to the person’s service after a date determined by the authority.

(3) Subsection (2) does not apply—

(a) in relation to a public body pension scheme which is a defined
contributions scheme, or

(b) 10to injury or compensation benefits.

(4) The public authority responsible for a scheme to which subsection (2) applies
may provide for exceptions to the provision made under subsection (2) and
section 18(6) and (7) apply in relation to any such exceptions (reading
references to scheme regulations as references to rules of the scheme).

(5) 15Provision made under subsection (2) or (4) may in particular be made by
amending the public body pension scheme.

(6) In subsection (2), the reference to benefits in relation to a person’s service
includes benefits relating to the person’s death in service.

(7) If any of the persons to whom a scheme to which subsection (2) applies relates
20are not eligible for membership of a scheme under section 1, the public
authority responsible for the scheme may establish a new scheme for the
payment of pensions or other benefits to or in respect of those persons (and see
section 29).

(8) Where a scheme to which subsection (2) applies was established in exercise of
25a statutory function or other power, the function or power may not be
exercised again so as to establish a new defined benefits scheme in relation to
the body or office.

(9) In the case of a scheme established by deed of trust, subsections (2) and (4)
apply irrespective of the provisions of the deed or the law relating to trusts.

(10) 30A Treasury order may amend Schedule 10 so as to—

(a) remove any body or office specified there;

(b) add any body or office to it (by name or description),

but may not add a devolved body or office.

(11) A Treasury order under subsection (10) may make consequential or
35supplementary provision, including in particular provision made by
amending any legislation.

(12) A Treasury order under subsection (10) is subject to the negative procedure.

(13) It is immaterial for the purposes of subsection (1) whether a scheme is made
before or after the coming into force of this section.

(14) 40Schedule 7 contains provision for a “final salary link” in relation to schemes to
which subsection (2) applies.

31 Existing public body pension schemes: pension age

(1) A public body pension scheme established before the coming into force of this
section may include—

(a) provision securing that the normal and deferred pension age of a
5person under the scheme is—

(i) the same as the person’s state pension age, or

(ii) 65, if that is higher, and

(b) provision securing that changes in the person’s normal or deferred
pension age occurring in consequence of provision under paragraph (a)
10apply in relation to relevant accrued benefits (as well as other benefits).

(2) In subsection (1)(b) “relevant accrued benefits”, in relation to a person and a
scheme, means benefits accrued after the coming into force of the provision
under subsection (1) which may be paid to or in respect of the person under the
scheme and to which the normal or deferred pension age is relevant.

(3) 15This section does not apply to a public body pension scheme which relates to a
devolved body or office.

Parliamentary and other pension schemes

32 Great offices of state

Schedule 11 makes provision about pension arrangements for the offices of—

(a) 20Prime Minister and First Lord of the Treasury,

(b) Lord Chancellor, and

(c) Speaker of the House of Commons.

33 Parliamentary and other pension schemes: pension age

In Schedule 6 to the Constitutional Reform and Governance Act 2010
25(Parliamentary and other pensions), after paragraph 29 there is inserted—

“Pension age

29A (1) Where the scheme provides for the normal or deferred pension age
of a person under the scheme to be the same as the person’s state
pension age, provision for a change in the person’s normal or
30deferred pension age in consequence of such provision to apply in
relation to relevant accrued benefits (as well as other benefits).

(2) Accordingly, paragraph 19(2) (protection of accrued rights) is to be
disregarded in relation to any such provision.

(3) In this paragraph—

(a) 35“normal pension age”, in relation to a person and a scheme,
means the earliest age at which a person with relevant service
is entitled to receive benefits (without actuarial adjustment)
on leaving that service (and disregarding any special
provision as to early payment of benefits on the grounds of
40ill-health or otherwise);

(b) “deferred pension age”, in relation to a person and a scheme,
means the earliest age at which a person with relevant service

is entitled to receive benefits under the scheme (without
actuarial adjustment) after leaving that service at a time
before normal pension age (and disregarding any special
provision as to early payment of benefits on the grounds of
5ill-health or otherwise);

(c) “state pension age”, in relation to a person, means the
person’s pensionable age as specified from time to time in
Schedule 4 to the Pensions Act 1995;

(d) “relevant accrued benefits”, in relation to a scheme, means
10benefits accrued after the coming into force of provision
under sub-paragraph (1) which may be paid to or in respect
of the person under the scheme and to which the normal or
deferred pension age is relevant.”

34 Members of the European Parliament

15In section 4 of the European Parliament (Pay and Pensions) Act 1979 (pensions
of MEPs), after subsection (3A) there is inserted—

“(3B) Where a scheme under this section provides for the normal or deferred
pension age of a person under the scheme to be the same as the person’s
state pension age, the scheme may make provision for a change in the
20person’s normal or deferred pension age in consequence of such
provision to apply in relation to relevant accrued benefits (as well as
other benefits).

(3C) In subsection (3B)—

(a) “normal pension age”, in relation to a person and a scheme,
25means the earliest age at which a person with service as a
Representative is entitled to receive benefits (without actuarial
adjustment) on ceasing service as a Representative (and
disregarding any special provision as to early payment of
benefits on the grounds of ill-health or otherwise);

(b) 30“deferred pension age”, in relation to a person and a scheme,
means the earliest age at which a person with service as a
Representative is entitled to receive benefits under the scheme
(without actuarial adjustment) after ceasing service as a
Representative at a time before normal pension age (and
35disregarding any special provision as to early payment of
benefits on the grounds of ill-health or otherwise);

(c) “state pension age”, in relation to a person, means the person’s
pensionable age as specified from time to time in Schedule 4 to
the Pensions Act 1995;

(d) 40“relevant accrued benefits”, in relation to a scheme, means
benefits accrued after the coming into force of provision under
subsection (3B) which may be paid to or in respect of the person
under the scheme and to which the normal or deferred pension
age is relevant.

(3D) 45A scheme under this section may provide for any statutory provision
relating to any matter connected with the pensions payable to or in
respect of Members to have effect with respect to or in connection with
Representatives, with such additions, omissions, amendments or other
modifications as may be specified in the scheme.

50In this subsection “statutory provision” means any provision contained
in an Act or in any instrument made under an Act (including an Act or
instrument passed or made after the coming into force of this
subsection).”

General

35 55General interpretation

In this Act—

• “the affirmative procedure” has the meaning given in section 36;

• “armed forces” has the meaning given in Schedule 1;

• “body” includes an unincorporated body or organisation of persons (for
  60example, a committee or board of trustees);

• “career average revalued earnings scheme” has the meaning given in
  section 8(4);

• “civil servants” has the meaning given in Schedule 1;

• “compensation benefits” means benefits by way of compensation for loss
  65of office or employment;

• “connected”, in relation to a scheme under section 1 and another statutory
  pension scheme, or a new public body pension scheme and another
  statutory pension scheme, has the meaning given by section 4(6);

• “defined benefits scheme”: a pension scheme is a “defined benefits
  70scheme” if or to the extent that the benefits that may be provided under
  the scheme are not money purchase benefits (within the meaning of the
  Pension Schemes Act 1993) or injury and compensation benefits;

• “defined contributions scheme”: a pension scheme is a “defined
  contributions” scheme if or to the extent that the benefits that may be
  75provided under the scheme are money purchase benefits (within the
  meaning of the Pension Schemes Act 1993);

• “deferred pension age” has the meaning given in section 10(5);

• “devolved”: a body or office is “devolved” if or to the extent that provision
  about pensions payable to or in respect of members or staff of the body,
  80or a holder of the office—

  (a)

  would be within the legislative competence of the Northern
  Ireland Assembly were that provision contained in an Act of the
  Assembly, or

  (b)

  is not a reserved matter within the meaning of the Scotland Act
  851998;

• “earnings” includes any remuneration or profit derived from an
  employment;

• “employer”, in relation to a pension scheme, means—

  (a)

  any employer of persons to whom the scheme relates,

  (b)

  90the person responsible for the remuneration of an office-holder
  to whom the scheme relates, or

  (c)

  such other persons (in addition to, or instead of, any person
  falling within paragraph (a) or (b)) as scheme regulations or (in
  the case of a public body pension scheme) the rules of the
  95scheme may provide;

• “existing scheme” has the meaning given in section 18(2);

Public Service Pensions BillPage 18

• “final salary”, in relation to a person to or in respect of whom a pension
  under a pension scheme is payable, means the person’s pensionable
  earnings, or highest, average or representative pensionable earnings, in
  a specified period ending at, or defined by reference to, the time when
  5the person’s pensionable service in relation to that scheme terminates;

• “final salary scheme”: a pension scheme is a “final salary scheme” if
  entitlement to the pension payable to or in respect of a person which is
  based on the pensionable service of that person is or may be
  determined to any extent by reference to the person’s final salary;

• 10“fire and rescue workers” has the meaning given in Schedule 1;

• “injury benefits” means benefits by way of compensation for incapacity or
  death as a result of injury or illness;

• “injury or compensation scheme”: a pension scheme is an “injury or
  compensation scheme” if it provides only for injury or compensation
  15benefits (or both);

• “judiciary” has the meaning given in Schedule 1;

• “health service workers” has the meaning given in Schedule 1;

• “legislation” means primary or secondary legislation;

• “local authority” means—

  (a)

  20a local authority in England and Wales within the meaning of
  Part 1 of the Local Government and Housing Act 1989;

  (b)

  a council constituted under section 2 of the Local Government
  etc. (Scotland) Act 1994;

• “local government workers” has the meaning given in Schedule 1;

• 25“members of a police force” has the meaning given in Schedule 1;

• “the negative procedure” and “the negative Commons procedure” have
  the meanings given in section 36;

• “normal pension age” has the meaning given in section 10(5);

• “pension board” has the meaning given by section 5(7);

• 30“pension scheme” means a scheme for the payment of pensions or other
  benefits to or in respect of persons with service of a particular
  description;

• “pensionable earnings”, in relation to a pension scheme and a member of
  it, means earnings by reference to which a pension or other benefits
  35under the scheme are calculated;

• “pensionable service”, in relation to a pension scheme, means service
  which qualifies a person to a pension or other benefits under that
  scheme;

• “primary legislation” means an Act, Act of the Scottish Parliament, Act or
  40Measure of the National Assembly for Wales or Northern Ireland
  legislation;

• “public authority” means—

  (a)

  a Minister of the Crown (as defined by section 8 of the Ministers
  of the Crown Act 1975),

  (b)

  45a statutory body or the holder of a statutory office, or

  (c)

  a person exercising a statutory function;

• “public body pension scheme” and “new public body pension scheme”
  have the meanings given in section 29(5);

• “responsible authority”, in relation to a scheme under section 1, has the
  50meaning given by section 2(2);

• “scheme” includes arrangements of any description;

Public Service Pensions BillPage 19

• “scheme advisory board” has the meaning given by section 7(6);

• “scheme manager”, in relation to a scheme under section 1, has the
  meaning given in section 4(2);

• “scheme regulations” has the meaning given in section 1(4);

• 5“secondary legislation” means an instrument made under primary
  legislation;

• “staff”, in relation to a body, includes any employee or officer of the body;

• “state pension age” has the meaning given in section 10(5);

• “statutory body” and “statutory office” mean a body or office established
  10under any legislation;

• “statutory function” means a function conferred by any legislation;

• “statutory pension scheme” means—

  (a)

  a pension scheme which is established by or under any
  legislation, and

  (b)

  15a public body pension scheme which is not so established;

• “teachers” has the meaning given in Schedule 1;

• “Treasury directions” means directions given by the Treasury;

• “Treasury order” means an order made by the Treasury;

• “Treasury regulations” means regulations made by the Treasury.

36 20Regulations, orders and directions

(1) For the purposes of this Act any power of the Secretary of State, the Minister of
the Civil Service, the Treasury, the Lord Chancellor or the Welsh Ministers to
make regulations or an order is exercisable by statutory instrument.

(2) In this Act, the “affirmative procedure” means—

(a) 25in the case of regulations or an order of the Secretary of State or the
Minister of the Civil Service, that the regulations or order may not be
made unless a draft of the instrument containing them or it has been
laid before, and approved by resolution of, each House of Parliament;

(b) in the case of regulations of the Welsh Ministers, that the regulations
30may not be made unless a draft of the instrument containing them has
been laid before, and approved by resolution of, the National Assembly
for Wales.

(3)
In this Act, the “negative procedure” means—

(a) in the case of regulations or an order of the Secretary of State, the
35Minister for the Civil Service, the Lord Chancellor or the Treasury, that
the instrument containing them or it is subject to annulment in
pursuance of a resolution of either House of Parliament;

(b) in the case of regulations or an order of the Welsh Ministers, that the
instrument containing them or it is subject to annulment in pursuance
40of a resolution of the National Assembly for Wales.

(4) In this Act, the “negative Commons procedure”, in relation to Treasury
regulations or a Treasury order, means that the instrument containing them or
it is subject to annulment in pursuance of a resolution of the House of
Commons.

(5) 45For regulations and orders of the Scottish Ministers, see Part 2 of the
Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10)2010 (asp 10).

(6) Treasury directions under this Act may be varied or revoked.