Pensions Bill (HL Bill 76)

Recalculation of terminal illness lump sums given in the past year

11 (1) This paragraph applies in relation to a person who is alive on the
commencement date if—

(a) the person has become entitled to a terminal illness lump sum under
5paragraph 25E of Schedule 7 to the Pensions Act 2004 at any time in
the period of one year ending with the commencement date, and

(b) the amount of the terminal illness lump sum was restricted in
accordance with paragraph 26 of that Schedule (compensation cap).

(2) The terminal illness lump sum for the person is to be recalculated under
10Schedule 7 to the Pensions Act 2004 as if the amendments made by Part 1 of
this Schedule had been in force at the time that the person became entitled
to it.

(3) For the purposes of that recalculation, paragraph 26A(7) of Schedule 7 to the
Pensions Act 2004 (inserted by Part 1 of this Schedule) has effect as if—

(a) 15the references to an order made by the Secretary of State were
references to the relevant old order, and

(b) the reference to actuarial adjustment factors were a reference to the
relevant old actuarial adjustment factors.

(4) In sub-paragraph (3)—

• 20“the relevant old order” means the order in force under paragraph 26(7)
  of Schedule 7 to the 2004 Act (as originally enacted) at the time when
  the person became entitled to the terminal illness lump sum;

• “the relevant old actuarial adjustment factors” means the actuarial
  adjustment factors published by the Board under paragraph 26(7) of
  25Schedule 7 to the 2004 Act (as originally enacted) at the time when
  the person became entitled to the terminal illness lump sum.

Meaning of “the pension compensation provisions” in Part 2 of the Pensions Act 2004

12 Section 162(2) of the Pensions Act 2004 is to be treated as including a
reference to this Part of this Schedule among “the pension compensation
30provisions”.

Part 4 Schemes undergoing assessment or winding up on the commencement date

Schemes undergoing assessment on the commencement date

13 (1) This paragraph applies in relation to an eligible scheme that is undergoing
35assessment on the commencement date.

Continue to use the old cap as the basis of assessment

(2) For the purposes of sections 127(2)(a) and 128(2)(a) of the Pensions Act 2004,
ignore any effect that this Schedule has on the compensation which would
be payable if the Board assumed responsibility for the scheme in accordance
40with Chapter 3 of Part 2 of that Act.

(3) For the purposes of section 138(2) of the Pensions Act 2004 take into account
any effect that this Schedule has on the compensation which would be
payable if the Board assumed responsibility for the scheme in accordance
with Chapter 3 of Part 2 of that Act on the assessment date.

5Schemes that begin winding up before the commencement date

14 (1) This paragraph applies in relation to an eligible scheme that is being wound
up if the winding up began (or is treated as having begun) before the
commencement date.

(2) For the purposes of section 73 and 73A of the Pensions Act 1995, ignore any
10effect that this Schedule has on the compensation which would be payable
if the Board assumed responsibility for the scheme in accordance with
Chapter 3 of Part 2 of the Pensions Act 2004.

(3) If for any period the scheme is being wound up and is also undergoing
assessment (“the overlap period”), sub-paragraph (4) applies.

(4) 15For the purposes of section 73A of the Pensions Act 1995 as it applies in
relation to the overlap period, take into account any effect that this Schedule
has on the compensation which would be payable if the Board assumed
responsibility for the scheme in accordance with Chapter 3 of Part 2 of the
Pensions Act 2004.

20Meaning of “undergoing assessment”

15 For the purposes of this Part of this Schedule an eligible scheme is
“undergoing assessment” if an assessment period has begun in relation to
the scheme but has not yet ended.

Meaning of “eligible scheme”

16 25Section 126(4) of the Pensions Act 2004 (list of provisions in relation to which
regulations may provide that a scheme remains an “eligible scheme”) is to be
treated as including a reference to this Part of this Schedule.

Part 5 General

30Interpretation

17 In this Schedule “the commencement date” means the date on which it
comes fully into force.

18 Other expressions used in this Schedule have the same meaning as in Part 2
of the Pensions Act 2004.

Further transitional provision may be made by order

19 The inclusion of Parts 3 and 4 of this Schedule does not prevent transitional
provision being made by order under section 55(8).