(5) In this section “employer duties” means any duty of an employer under
any provision of sections 2 to 11 and 54 or of regulations made under
those sections.”

(3) In consequence of subsection (2), the following are repealed—

(a) 5section 292A of the Pensions Act 2004;

(b) section 5(4) of the Pensions Act 2008;

(c) section 18 of the Pensions Act 2011.

39 Alternative quality requirements for UK defined benefits schemes

(1) The Pensions Act 2008 is amended as follows.

(2) 10After section 23 insert—

“23A Alternative quality requirements for UK defined benefits schemes

(1) The Secretary of State may by regulations provide that a defined
benefits scheme that has its main administration in the United
Kingdom satisfies the quality requirement in relation to a jobholder if
15any one or more of the following is satisfied—

(a) the scheme is of a prescribed description and satisfies the
quality requirement under section 20 in relation to that
jobholder;

(b) the cost of providing the benefits accruing for or in respect of
20the relevant members over a relevant period would require
contributions to be made of a total amount equal to at least a
prescribed percentage of the members’ total relevant earnings
over that period;

(c) in the case of each of at least 90% of the relevant members, the
25cost of providing the benefits accruing for or in respect of the
member over a relevant period would require contributions to
be made of a total amount equal to at least a prescribed
percentage of the member’s total relevant earnings over that
period.

(2) 30For this purpose—

• “contributions” means contributions to the scheme by, or on
  behalf or in respect of, a relevant member;

• “relevant earnings” means earnings of a prescribed description;

• “relevant members” means members of the scheme of a prescribed
  35description;

• “relevant period” means a period specified in or determined in
  accordance with the regulations.

(3) A percentage prescribed under subsection (1)(b) or (c) must be at least
8%.

(4) 40Regulations under subsection (1)(b) or (c) may make provision—

(a) about how to calculate whether the requirement is satisfied,
including provision requiring the calculation to be made in
accordance with prescribed methods or assumptions;

(b) requiring benefits of a prescribed description to be disregarded
45in determining whether the requirement is satisfied;

(c) that a scheme only satisfies the requirement if the scheme
actuary certifies that it does; and for this purpose “scheme
actuary” has the prescribed meaning.

(5) Section 13(3) (meaning of “earnings”) applies for the purposes of this
5section as it applies for the purposes of that section.

(6) The Secretary of State must from time to time review any regulations in
force under subsection (1).

(7) A review must be carried out—

(a) during 2017, and

(b) 10after that, no more than three years after the completion of the
previous review.”

(3) In section 24 (quality requirement: UK hybrid schemes), in subsection (1)(b),
for “23” substitute “23A”.

(4) In section 28 (certification that quality requirement or alternative requirement
15is satisfied)—

(a) after subsection (3A) insert—

“(3B) This section also applies to a defined benefits scheme that has its
main administration in the United Kingdom and is of a
description prescribed under section 23A(1)(a).”;

(b) 20in subsection (4), after paragraph (d) insert—

“(e) for a scheme within subsection (3B), means the quality
requirement under section 23A(1)(a).”

(5) In section 29 (transitional periods for money purchase and personal pension
schemes), in subsections (1) and (3) omit “for money purchase and personal
25pension schemes”.

(6) Section 30 (transitional period for defined benefits and hybrid schemes) is
amended as follows.

(7) In subsection (3), at the end of the substituted subsection (2) insert—

“A reference in this subsection to a scheme does not include a scheme to which
30section 30(11)(a) or (b) applies.”

(8) In subsection (5), in the substituted subsection (2)—

(a) in paragraph (a), after “defined benefits scheme” insert “other than a
scheme to which section 30(11)(a) applies”;

(b) in paragraph (aa) (inserted by section 40 of this Act), after “a hybrid
35scheme” insert “other than a scheme to which section 30(11)(b) applies”;

(c)
after paragraph (c) (inserted by section 40 of this Act), insert—

“(d) becomes an active member, with effect from the
automatic enrolment date, of an automatic enrolment
scheme which is a defined benefits scheme to which
40section 30(11)(a) applies, or

(e) becomes a defined benefits member , with effect from
the automatic enrolment date, of an automatic
enrolment scheme which is a hybrid scheme to which
section 30(11)(b) applies.”

(9) After subsection (10) (inserted by section 40 of this Act) insert—

“(11) In subsection (2) references to a scheme do not include—

(a) a defined benefits scheme that satisfies the quality requirement
in relation to the jobholder by reason only of section 23A(1)(a),
5or

(b) a hybrid scheme if—

(i) the appropriate paragraph of section 24(1) for any
provisions of the scheme is paragraph (b) (those
provisions are referred to below as “the defined benefits
10section”),

(ii) the defined benefits section satisfies section 23A(1)(a) as
applied by section 24(1)(b), and

(iii) the defined benefits section does not satisfy any of the
other requirements mentioned in section 24(1)(b).”

40 15Automatic enrolment: transitional period for hybrid schemes

(1) Section 30 of the Pensions Act 2008 (transitional period for defined benefits and
hybrid schemes) is amended as follows.

(2) In subsection (2)(b) and (c), for “a hybrid scheme” substitute “a defined benefits
member of a hybrid scheme”.

(3) 20In subsection (3), in the substituted subsection (2)—

(a) after “becomes” insert “(a)”;

(b) for “or a hybrid scheme” substitute “, or

(b) a defined benefits member, with effect from the end of
that period, of an automatic enrolment scheme which is
25a hybrid scheme.”

(4) In subsection (5), in the substituted subsection (2)—

(a) in paragraph (a), for “or a hybrid scheme, or” substitute—

“(aa) becomes a defined benefits member, with effect from the
closure date, of an automatic enrolment scheme which is
30a hybrid scheme,”;

(b) after paragraph (b) insert—

“(c) becomes a money purchase member, with effect from
the automatic enrolment date, of an automatic
enrolment scheme which is a hybrid scheme,”.

(5) 35After subsection (9) insert—

“(10) For the purposes of this section—

(a) a person is a “money purchase member” of a hybrid scheme if—

(i) the person is an active member of the scheme, and

(ii) all the benefits accruing in respect of his or her
40membership are money purchase benefits, and

(b) a person is a “defined benefits member” of a hybrid scheme if
the person is an active member of the scheme other than a
money purchase member.”

(6) Subsection (7) applies if—

(a) an employer whose first enrolment date is before the date on which the
amendments made by this section come into force (“the
commencement date”) has given a jobholder notice under section 30(3)
of the 2008 Act,

(b) 5the conditions in section 30(2) of that Act have continued to be satisfied
during the period beginning with the employer’s first enrolment date
and ending with the day before the commencement date, and

(c) had the amendments made by this section come into force on
19 December 2012, the condition in section 30(2)(c) of that Act would
10not have been satisfied at a time during that period.

(7) Section 30(5) to (7) of the 2008 Act (as amended by this section) applies in
relation to the jobholder with the following modifications—

(a) references in section 30(5) and (6) of that Act to the closure date are to
be read as references to the commencement date, and

(b) 15references in section 30(5) and (6) of that Act to the automatic
enrolment date are to be read as references to—

(i) 19 December 2012, or

(ii) if later, the employer’s first enrolment date;

and section 30(3) and (4) of that Act does not apply.

(8) 20Expressions used in this section and in section 30 of the 2008 Act have the same
meaning in this section as in that section.

41 Penalty notices under sections 40 and 41 of the Pensions Act 2008 etc

(1) In sections 40(1)(d) and 41(1)(d) of the Pensions Act 2008 (fixed and escalating
penalty notices), at the end insert “, so far as relevant to the exercise of any of
25its functions under or by virtue of this Part”.

(2) In section 72 of the Pensions Act 2004 (powers to require information), in
subsection (1A), for “Chapter 2 of Part 1 of the Pensions Act 2008 or section 51
of that Act” substitute “or by virtue of Part 1 of the Pensions Act 2008”.

42 Unpaid scheme contributions

(1) 30The Pension Schemes Act 1993 is amended as follows.

(2) In section 123 (payment by Secretary of State of unpaid scheme contributions
on employer insolvency: interpretation)—

(a) in subsection (3), for the definition of “contract of employment” and
related expressions substitute—

• 35““employer”, “employment”, “worker” and “worker’s
  contract” and other expressions which are defined in the
  Employment Rights Act 1996 have the same meaning as
  in that Act (see further subsections (3A) and (3B));”;

(b) in subsection (3), in paragraph (b) of the definition of “holiday pay”, for
40“the employee’s contract of employment” substitute “the worker’s
contract”;

(c) after subsection (3) insert—

“(3A) Section 89 of the Pensions Act 2008 (agency workers) applies for
the purposes of this Chapter as it applies for the purposes of
45Part 1 of that Act.

(3B) References in this Chapter to a worker include references to an
individual to whom Part 1 of the Pensions Act 2008 applies as if
the individual were a worker because of regulations made
under section 98 of that Act; and related expressions are to be
5read accordingly.”

(3) In section 124 (Secretary of State’s duty to pay unpaid contributions)—

(a) for “an employee”, in each place, substitute “a worker”;

(b) for “the employee”, in each place, substitute “the worker”;

(c) for “the employee’s” substitute “the worker’s”;

(d) 10for “employees”, in each place, substitute “workers”.

(4) In section 161, for “contract of employment” substitute “worker’s contract”.

(5) In section 165(7)—

(a) in paragraph (a), for “contract of employment the employee” substitute
“worker’s contract the worker”;

(b) 15in paragraph (b), for “employee” substitute “worker”.

Other

43 Power to restrict charges or impose requirements in relation to schemes

Schedule 18 permits the Secretary of State to make regulations—

(a) restricting the charges that may be imposed on members of certain
20pension schemes;

(b) imposing requirements relating to administration or governance that
must be satisfied in relation to certain pension schemes.

44 Disclosure of information about transaction costs to members etc

In section 113 of the Pension Schemes Act 1993 (disclosure of information
25about schemes to members etc), after subsection (4) insert—

“(5) The Secretary of State must make regulations under this section
requiring information about some or all of the transaction costs of
work-based money purchase schemes to be given to some or all of the
persons mentioned in subsection (2).

(6) 30But subsection (5) does not apply in relation to a scheme of a particular
description if—

(a) as a result of another enactment, requirements are imposed
relating to the disclosure of information about transaction costs
of schemes of that description, and

(b) 35in the opinion of the Secretary of State, those requirements
provide an adequate alternative to what is required by
subsection (5).

(7) In this section—

• “work-based money purchase scheme” means a money purchase
  40scheme that is—

  (a)

  an occupational pension scheme,

  (b)

  a personal pension scheme where direct payment
  arrangements (within the meaning of section 111A) exist

  Pensions BillPage 25

  in respect of one or more members of the scheme who
  are workers, or

  (c)

  a personal pension scheme which is or has been
  registered under section 2 of the Welfare Reform and
  5Pensions Act 1999 (stakeholder pension schemes);

• “worker” means a person—

  (a)

  who is a worker for the purposes of Part 1 of the
  Pensions Act 2008, or

  (b)

  to whom a provision of Part 1 of that Act applies as if the
  10person were a worker because of a provision of Chapter
  8 of that Part;

  but for the purposes of paragraph (b), ignore section 92 of that
  Act.”

45 Power to require pension levies to be paid in respect of past periods

(1) 15The Secretary of State may by regulations provide for the Pensions Act 2004,
and regulations made under it, to have effect, so far as relating to the
requirement to pay pension levy, as if the amendments made by the 2010
regulations had always had effect.

(2) Regulations under this section may in particular—

(a) 20modify the application of the Pensions Act 2004, or regulations made
under it, in relation to amounts of pension levy required to be paid
because of regulations under this section;

(b) provide for interest to be charged at a specified rate on such amounts
(including in respect of periods before the coming into force of
25regulations under this section).

(3) In this section—

• “the 2010 regulations” means—

  (a)

  regulations 2, 3 and 8 of the Pension Protection Fund and
  Occupational Pension Schemes (Miscellaneous Amendments)
  30Regulations 2010 (S.I. 2010/196S.I. 2010/196), and

  (b)

  regulation 2 of the Occupational Pension Schemes (Levies)
  (Amendment) Regulations 2010 (S.I. 2010/1930S.I. 2010/1930);

• “pension levy” means—

  (a)

  a levy under regulations made under section 117 of the
  35Pensions Act 2004 (administration levy),

  (b)

  a levy under regulations made under section 174 of that Act
  (initial levy), or

  (c)

  a levy under section 175 of that Act (pension protection levies).

46 Prohibition and suspension orders: directors of corporate trustees

(1) 40The Pensions Act 1995 is amended as follows.

(2) After section 3 insert—

“3A Prohibition orders: directors of corporate trustees etc

(1) A company or Scottish partnership is prohibited from being a trustee of
a trust scheme at any time when an individual who is a director of the

company or a partner in the partnership is prohibited from being a
trustee of the scheme by an order under section 3.

(2) Where a company or partnership which is a trustee of a trust scheme
becomes prohibited under subsection (1) in relation to the scheme, that
5subsection has the effect of removing the company or partnership as a
trustee.

(3) The Authority may, on the application of a company or Scottish
partnership, give notice in writing to the applicant waiving the
prohibition under subsection (1)—

(a) 10in relation to an individual against whom an order under
section 3 has been made, and

(b) either generally or in relation to a particular scheme or
particular description of schemes.

(4) A notice may be given under subsection (3) only if the Authority is
15satisfied that the applicant would be a fit and proper person to be a
trustee of the scheme or schemes to which the notice relates despite the
individual being, or even if the individual were to become, a director of
or partner in the applicant.

(5) A notice given at any time under subsection (3) cannot affect anything
20done before that time.

(6) An application under subsection (3) may not be made—

(a) during the period within which the determination to exercise
the power to make the order against the individual may be
referred to the Tribunal under section 96(3) or 99(7) of the
25Pensions Act 2004 (whether by a company or partnership which
became prohibited under subsection (1) on the making of the
order or by another person), and

(b) if the determination is so referred, until the reference, and any
appeal against the Tribunal’s determination, has been finally
30disposed of.

(7) The Authority must prepare and publish a statement of the policies
they intend to adopt in relation to the exercise of their powers under
this section.

(8) The Authority may revise any statement published under subsection
35(7) and must publish any revised statement.

(9) References in this section to an order under section 3 are to an order
under that section made on or after the date on which section 46(2) of
the Pensions Act 2014 comes fully into force.”

(3) Section 4 (Pensions Regulator’s power to suspend trustee of occupational
40pension scheme) is amended as follows.

(4) In subsection (1)(f), after “paragraph” insert “(aa),”.

(5) In subsection (2)(a), after “or (aa)” insert “or, in a case where the Authority
would have power to suspend a director or partner under paragraph (aa), by
virtue of paragraph (f)”.

(6) 45Schedule 19 contains consequential amendments.

47 Preparation of guidance for pensions illustrations

In section 16 of the Companies (Audit, Investigations and Community
Enterprise) Act 2004 (grants to bodies concerned with accounting standards
etc), in subsection (2), after paragraph (o) insert—

“(oa) 5exercising functions under regulations made under section
113(3A) of the Pension Schemes Act 1993 or section 109(3A) of
the Pension Schemes (Northern Ireland) Act 1993 (preparing
guidance for pensions illustrations);”.

48 Pensions Regulator’s objectives

10In section 5(1) of the Pensions Act 2004, after paragraph (c) insert—

“(cza) in relation to the exercise of its functions under Part 3 only, to
minimise any adverse impact on the sustainable growth of an
employer,”.

49 Maximum period between scheme returns to be 5 years for micro schemes

(1) 15Section 63 of the Pensions Act 2004 is amended as follows.

(2) After subsection (3) insert—

“(3A) But subsection (3)(a) has effect as if the reference to three years were a
reference to five years if—

(a) the trustees or managers have complied with paragraph (b) of
20section 62(2),

(b) the information they provided under that paragraph included
the number of members of the scheme, and

(c) that number was no more than 4.”

(3) After subsection (4) insert—

“(4A) 25But subsection (4)(a) has effect as if the reference to three years were a
reference to five years if—

(a) on the date on which the previous scheme return notice was
issued, the number of members of the scheme was recorded in
the register, and

(b) 30that number was no more than 4.”

50 Pension Protection Fund: increased compensation cap for long service

See Schedule 20 for amendments increasing the Pension Protection Fund
compensation cap for people with long pensionable service.

51 Pension Protection Fund: compensation cap to apply separately to certain
35benefits

(1) Paragraph 26 of Schedule 7 to the Pensions Act 2004 (Pension Protection Fund:
compensation cap) is amended as follows.

(2) In sub-paragraph (1)(b), for “sub-paragraph (2)(a) or (b)” substitute “sub-
paragraph (2)(a), (b) or (c)”.

(3) 40In sub-paragraph (2)(a)(ii), for “paragraph (b)(i) does not apply” substitute
“neither of paragraphs (b) and (c) applies”.

(4) In sub-paragraph (2)(b)—

(a) before paragraph (i) insert—

“(zi) benefit A is attributable to the person’s
pensionable service,”;

(b) 5in paragraph (i), after “one or more other benefits” insert “that are
attributable to his pensionable service”.

(5) In sub-paragraph (2), after paragraph (b) insert “, and

(c) this paragraph applies if—

(i) benefit A is attributable to a pension credit from a
10transferor,

(ii) at the same time as the person becomes entitled to
relevant compensation in respect of benefit A he also
becomes entitled to relevant compensation in respect
of one or more other benefits that are—

(iia) 15under the scheme or a connected occupational
pension scheme, and

(iib) attributable to a pension credit from the same
transferor,

(“benefit or benefits B”), and

(iii) 20the aggregate of the annual values of benefit A and
benefit or benefits B exceeds the compensation cap.”

(6) In sub-paragraph (5), after “sub-paragraph (2)(b)” insert “or (c)”.

(7) The amendments made by this section are to be treated as always having had
effect.

(8) 25Regulations under paragraph 26(9) of Schedule 7 to the Pensions Act 2004
(modifications for cases where compensation becomes payable on different
occasions) made in consequence of this section may be made with retrospective
effect.

52 Public service pension schemes: transitional arrangements

(1) 30Section 18 of the Public Service Pensions Act 2013 (restriction of existing
pension schemes) is amended as follows.

(2) After subsection (5) insert—

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

(a) 35persons who were members of a public body pension scheme
specified in the regulations, 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 a
40scheme referred to in paragraph (a) or to be eligible for
membership of such a scheme.”

(3) In each of subsections (6) and (8), after “(5)” insert “or (5A)”.

Part 7 Final provisions

53 Power to make consequential amendments etc

(1) The Secretary of State or the Treasury may by order make consequential,
5incidental or supplementary provision in connection with any provision made
by this Act.

(2) An order under this section may amend, repeal, revoke or otherwise modify
any enactment (whenever passed or made).

(3) “Enactment” includes an enactment contained in subordinate legislation
10within the meaning of the Interpretation Act 1978.

54 Regulations and orders

(1) Regulations and orders under this Act are to be made by statutory instrument.

(2) A statutory instrument containing (whether alone or with other provisions)—

(a) regulations under section 3, 17, 18(3) or (5), 19, 20, 30, 32 or 34,

(b) 15the first regulations under section 10,

(c) an order under section 53 that amends or repeals a provision of an Act,

(d) regulations under Schedule 17,

(e) regulations under paragraph 2 of Schedule 18 or regulations under
paragraph 7 of that Schedule that amend a provision of an Act, or

(f) 20the first regulations under paragraph 1 or 3 of that Schedule,

may not be made unless a draft of the instrument has been laid before and
approved by a resolution of each House of Parliament.

(3) Any other statutory instrument containing regulations or an order under this
Act is subject to annulment in pursuance of a resolution of either House of
25Parliament.

(4) Subsection (3) does not apply to a statutory instrument containing an order
under section 56(1), (6) or (8) only.

(5) A power to make regulations or an order under this Act may be used—

(a) to make different provision for different purposes;

(b) 30in relation to all or only some of the purposes for which it may be used.

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

55 Extent

(1) This Act extends to England and Wales and Scotland only, subject to the
35following 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) This Part extends also to Northern Ireland.