Pension Schemes Bill (HL Bill 63)

Part 1 Categories of pension scheme

1 Introduction

(1) This Part defines some key expressions used in pensions legislation—

(a) 5defined benefits scheme - see section 2;

(b) shared risk scheme (sometimes known as “defined ambition”) - see
section 3;

(c) defined contributions scheme - see section 4.

(2) The definitions—

(a) 10do not apply in any public service pensions legislation;

(b) apply in other legislation only where legislation expressly provides for
the definitions to apply.

2 Defined benefits scheme

A pension scheme is a “defined benefits scheme” if—

(a) 15the scheme provides for all members to be paid retirement income
beginning at normal pension age and continuing for life,

(b) there is a full pensions promise in relation to the retirement income and
any other retirement benefits that may be provided to members,

(c) the normal pension age in relation to the retirement income and any
other retirement benefits that may be provided to members is fixed,
and

(d) such other requirements as may be specified in regulations are met.

3 5Shared risk scheme (sometimes known as “defined ambition”)

A pension scheme is a “shared risk scheme” if—

(a) there is a pensions promise in relation to at least some of the retirement
benefits that may be provided to each member, but

(b) the scheme is not a defined benefits scheme.

4 10Defined contributions scheme

A pension scheme is a “defined contributions scheme” if there is no pensions
promise in relation to any of the retirement benefits that may be provided to
the members.

5 Meaning of “pensions promise” etc

(1) 15For the purposes of section 2 there is a “full pensions promise” in relation to a
retirement benefit if—

(a) the scheme provides for there to be a promise, at all times before the
benefit comes into payment, about the level of the benefit, and

(b) the level of the benefit is to be determined wholly by reference to that
20promise in all circumstances.

(2) For the purposes of sections 3 and 4 there is a “pensions promise” in relation to
a retirement benefit if the scheme provides for there to be a promise, at a time
before the benefit comes into payment, about the level of the benefit.

(3) A reference in this section to a promise about the level of a retirement benefit—

(a) 25includes a promise about factors, other than longevity, that will be used
to calculate the level of the benefit,

(b) does not include a promise if, or to the extent that, it consists merely of
a promise that the level of the benefit will be calculated by reference to
an amount available for its provision, and

(c) 30in the case of a benefit the level of which depends on the amount
available for the provision of benefits to or in respect of the member and
one or more other members collectively, does not include a promise
about the factors used to determine what proportion of that amount is
available for the provision of the particular benefit.

(4) 35A scheme provides for there to be a promise if the scheme—

(a) sets out the promise, or

(b) requires the promise to be obtained from a third party.

(5) A scheme also provides for there to be a promise for the purposes of
subsection (2) if the scheme provides for the member to be given—

(a) 40the option of a promise from the scheme, or

(b) the option of requiring a promise to be obtained from a third party,

(whether or not the option is subject to conditions).

(6) A benefit does not fail the test in subsection (1)(b) just because the scheme
confers a discretion to vary the benefit so long as the discretion—

(a) is capable of being used only for reasons related to a member’s
individual circumstances and meets any other requirements that may
5be specified in regulations, or

(b) is of a description specified in regulations.

(7) A promise about the level of retirement income is not to be treated as a
pensions promise if—

(a) the promise is conditional on the retirement income coming into
10payment by a particular date,

(b) the scheme provides for the member to be first given the promise
during such period ending on that date as may be specified in
regulations, and

(c) the promise is not of a description specified in regulations.

(8) 15When working out for the purposes of sections 2 to 4 what benefits “may be
provided” to a member, take into account—

(a) benefits that may be provided only if the member has been a member
for a certain length of time, and

(b) any other benefits that, at a future time, are benefits that may be
20provided to the member.

6 Treatment of a scheme as two or more separate schemes

(1) Regulations must provide for a pension scheme that does not fit within any of
the categories to be treated, for the purposes of this Part and any other specified
legislation, as if it were two or more separate schemes each of which then fits
25within one of the categories.

(2) Regulations may provide for other circumstances in which a scheme is to be
treated, for the purposes of this Part and any other specified legislation, as two
or more separate schemes each of which fits within one of the categories.

(3) In this section “category” means a category of scheme defined by section 2, 3 or
304.

7 Interpretation of Part 1

In this Part—

• “fixed”, in respect of normal pension age in relation to a benefit, means
  incapable of changing except by an amendment to the scheme rules;

• 35“full pensions promise” has the meaning given by section 5;

• “legislation” means—

  (a)

  an Act, or

  (b)

  subordinate legislation as defined by section 21(1) of the
  Interpretation Act 1978;

• 40“level”, in relation to a retirement benefit, means—

  (a)

  in the case of retirement income, the rate of that income, and

  (b)

  in the case of a retirement lump sum, the amount of that lump
  sum;

• “normal pension age”, in relation to a benefit for a member of a pension
  45scheme, means—

  Pension Schemes BillPage 4

  (a)

  the earliest age at which, or earliest occasion on which, the
  member is entitled to receive the benefit without adjustment for
  taking it early or late (disregarding any special provision as to
  early payment on the grounds of ill health or otherwise), or

  (b)

  5if there is no such age or occasion, normal minimum pension
  age as defined by section 279(1) of the Finance Act 2004;

• “pensions promise” has the meaning given by section 5;

• “pension scheme” has the meaning given by section 1(5) of the Pension
  Schemes Act 1993;

• 10“public service pensions legislation” means—

  (a)

  the Public Service Pensions Act 2013,

  (b)

  the Superannuation Act 1972, and

  (c)

  any other provision by or under which a public service pension
  scheme is established;

• 15“public service pension scheme” has the meaning given by section 1(1) of
  the Pension Schemes Act 1993;

• “regulations” means regulations made by the Secretary of State;

• “retirement benefit”, in relation to a member of a pension scheme,
  means—

  (a)

  20retirement income, or

  (b)

  a retirement lump sum;

• “retirement income”, in relation to a member of a pension scheme, means
  a pension or annuity payable to the member on reaching normal
  pension age;

• 25“retirement lump sum”, in relation to a member of a pension scheme,
  means a lump sum payable to the member on reaching normal pension
  age or available for the provision of other retirement benefits for the
  member on or after reaching normal pension age.

Part 2 30Collective benefits

Introduction and nature of collective benefits

8 Introduction and definition

(1) This Part is about pension schemes under which at least some of the benefits
that may be provided are collective benefits.

(2) 35A benefit is a “collective benefit” if in all circumstances the rate or amount of
the benefit depends entirely on—

(a) the amount available for the provision of benefits to or in respect of the
member and one or more other members collectively, and

(b) factors used to determine what proportion of that amount is available
40for the provision of the particular benefit.

(3) But a benefit is not a collective benefit if—

(a) it is a money purchase benefit, or

(b) it is of a description specified in regulations.

9 Duty to set targets for collective benefits

(1) Regulations may require the trustees or managers of a pension scheme to set
targets in relation to any collective benefits that may be provided by the
scheme.

(2) 5The regulations may, in particular—

(a) impose requirements about the way that targets are expressed;

(b) impose requirements about the recording or publication of targets;

(c) require the trustees or managers to set initial targets at a level which
ensures that the probability of meeting the targets falls within a range
10specified in the regulations;

(d) require the trustees or managers to obtain a certificate from an actuary
certifying that, in the opinion of the actuary, the initial targets have
been set at a level that complies with regulations under paragraph (c).

(3) Regulations made in reliance on subsection (2)(d) may, in particular—

(a) 15require the trustees or managers to obtain the certificate from an
actuary who has specified qualifications or meets other specified
requirements;

(b) make provision about the content of the certificate;

(c) set out matters to which the actuary must have regard;

(d) 20require the trustees or managers to provide a copy of the actuary’s
certificate to a specified person.

(4) In this section “target” means a target, relating to the rate or amount of a
benefit, that is unenforceable.

10 Policy about factors used to determine each benefit

(1) 25Regulations may require the trustees or managers of a pension scheme—

(a) to have a policy as to the factors to be used to determine what
proportion of the amount available for the provision of any collective
benefits by the scheme is to be available for the provision of a particular
collective benefit, and

(b) 30to follow that policy in calculating any collective benefit.

(2) The regulations may, in particular—

(a) require the trustees or managers to consult about the policy;

(b) make provision about the content of the policy;

(c) set out matters that the trustees or managers must take into account, or
35principles they must follow, in formulating the policy;

(d) make provision about reviewing and revising the policy.

11 Power to impose requirements about factors used to determine each benefit

Regulations may make provision as to the factors to be used to determine what
proportion of the amount available for the provision of any collective benefits
40by a pension scheme is to be available for the provision of a particular collective
benefit.

Contributions

12 Payment schedule

(1) Regulations may require the trustees or managers of a pension scheme to
prepare a payment schedule showing—

(a) 5the contributions payable to the scheme in respect of any collective
benefits under the scheme, and

(b) the dates on which the contributions are due.

(2) The regulations may require the payment schedule to include other amounts
payable to the scheme and the dates on which they are due.

(3) 10The regulations may, in particular—

(a) make further provision about the content of the payment schedule;

(b) make provision about revising the payment schedule.

(4) The regulations may, in particular, make provision corresponding or similar to
any provision made by section 87 of the Pensions Act 1995 (payment schedules
15for certain kinds of scheme).

13 Overdue contributions and other payments

(1) Regulations—

(a) may require the trustees or managers of a pension scheme to notify a
specified person of any relevant payments that are overdue;

(b) 20may make provision for the recovery of those payments.

(2) In subsection (1) “relevant payment” means a payment shown in a payment
schedule required by regulations under section 12.

(3) Regulations under subsection (1) may, in particular, make provision
corresponding or similar to any provision made by section 88 of the Pensions
25Act 1995 (failure to comply with payment schedule for certain kinds of
scheme).

Investment

14 Statement of investment strategy

(1) Regulations may require the trustees or managers of a pension scheme to
30prepare a statement of their investment strategy in connection with any
collective benefit investments.

(2) The regulations may, in particular, make provision about—

(a) the content of the statement;

(b) reviewing and revising the statement.

(3) 35The regulations may, in particular—

(a) make provision corresponding or similar to any provision made by
section 35 of the Pensions Act 1995 (investment principles for
occupational trust-based schemes);

(b) disapply that section in relation to any investments to which the
40regulations apply.

15 Investment performance reports

(1) Regulations may require the trustees or managers of a pension scheme to
obtain reports about the performance of any collective benefit investments.

(2) The regulations may, in particular, make provision about—

(a) 5the content of reports;

(b) how often reports must be obtained;

(c) the person from whom reports must be obtained.

16 Investment powers

(1) Regulations may make provision about—

(a) 10the investment powers of the trustees or managers of a pension scheme
in connection with collective benefit investments;

(b) their powers to delegate decisions in connection with collective benefit
investments (including provision as to liability for delegated
decisions);

(c) 15the investment powers of any person to whom they have delegated
decisions in connection with collective benefit investments.

(2) The regulations may, in particular—

(a) make provision corresponding or similar to any provision made by
section 34 or 36 of the Pensions Act 1995 (powers of investment and
20delegation and choice of investments for occupational trust-based
schemes);

(b) disapply those sections in relation to collective benefit investments.

17 Restriction on borrowing by trustees or managers

(1) Regulations may prohibit a person to whom this section applies from
25borrowing money or acting as a guarantor except in specified cases.

(2) This section applies to—

(a) the trustees or managers of a pension scheme under which any of the
benefits that may be provided are collective benefits, and

(b) any person to whom they have delegated decisions about collective
30benefit investments.

18 Investment powers: duty of care

(1) Regulations may make provision to prevent any instrument or agreement from
excluding or restricting any liability of the trustees or managers of a pension
scheme, or any person to whom they have delegated decisions, in respect of the
35performance of investment functions involving collective benefit investments.

(2) The regulations may, in particular—

(a) make provision corresponding or similar to any provision made by
section 33 of the Pensions Act 1995 (duty of care in respect of
investment powers for occupational trust-based schemes);

(b) 40disapply that section in relation to collective benefit investments.

Valuation

19 Valuation reports

(1) Regulations may require the trustees or managers of a pension scheme to
obtain a report prepared by an actuary—

(a) 5valuing the assets held by the scheme for the purposes of providing
collective benefits, and

(b) assessing the probability of the scheme meeting the targets in relation
to those benefits.

(2) A report required by regulations under this section is referred to in this Part as
10a “valuation report”.

(3) The regulations may, in particular—

(a) require the trustees or managers to obtain the report from an actuary
who has specified qualifications or meets other specified requirements;

(b) require the actuary to certify whether, in the opinion of the actuary, the
15probability of the scheme meeting the targets falls within the required
range or is above or below it;

(c) make further provision about the content of valuation reports;

(d) make provision about how often valuation reports must be obtained.

20 Valuation process

(1) 20Regulations may make provision about the methods or assumptions to be used
by an actuary valuing assets, or assessing the probability of a scheme meeting
a target in relation to a collective benefit, for the purposes of a valuation report.

(2) Regulations under subsection (1) may, in particular—

(a) require the trustees or managers of the scheme to determine the
25methods or assumptions to be used by the actuary;

(b) set out matters that the trustees or managers must take into account, or
principles they must follow, in determining methods or assumptions.

(3) Regulations may—

(a) make provision about the assets to be taken into account for the
30purposes of a valuation report;

(b) require the value attributed to the assets to be reduced by the amount
of any liabilities in respect of administrative expenses or other specified
matters.

(4) Regulations may require an actuary preparing a valuation report to certify that,
35in the opinion of the actuary, any specified requirements imposed by
regulations under this section have been followed.

(5) Regulations—

(a) may require an actuary to have regard to guidance issued from time to
time by a specified person when preparing a valuation report;

(b) 40may impose other requirements on an actuary when preparing a
valuation report.

Dealing with deficits and surpluses

21 Policy for dealing with a deficit or surplus

(1) Regulations may require the trustees or managers of a pension scheme—

(a) to have a policy for dealing with a deficit or surplus in respect of any
5collective benefits that may be provided by the scheme, and

(b) to follow that policy if a valuation report shows a deficit or surplus.

(2) For the purposes of this Part—

(a) there is a “deficit” in respect of a collective benefit if the probability of
the scheme meeting a target in relation to the benefit is below the
10required range, and

(b) there is a “surplus” in respect of a collective benefit if the probability of
the scheme meeting a target in relation to the benefit is above the
required range.

(3) Regulations under subsection (1)(a) may, in particular—

(a) 15require the trustees or managers to consult about the policy;

(b) make provision about the content of the policy;

(c) set out matters that the trustees or managers must take into account, or
principles they must follow, in formulating the policy;

(d) make provision about reviewing and revising the policy.

(4) 20The regulations may, in particular, require the policy—

(a) to be formulated with a view to achieving results described in the
regulations within a period or periods described in the regulations;

(b) to contain provision for a deficit or surplus to be dealt with in one or
more of a range of ways described in the regulations;

(c) 25to contain an explanation of the possible effect of the policy, or any
requirements imposed by regulations under section 22, on members in
different circumstances.

22 Power to impose requirements about dealing with a deficit or surplus

(1) Regulations may specify circumstances in which a deficit or surplus in respect
30of any collective benefits that may be provided by a pension scheme must be
dealt with in a particular way.

(2) The regulations may, in particular, specify steps that must be taken by the
trustees or managers and the period or periods within which any steps must
be taken.

23 35Deficits attributable to an offence or the imposition of a levy

(1) Regulations may provide for an amount to be treated as a debt due from an
employer to the trustees or managers of a pension scheme that provides
collective benefits in cases where there is a deficit that is attributable to a
specified offence or the imposition of a specified levy.

(2) 40The regulations may, in particular, make provision corresponding or similar to
any provision made by section 75 of the Pensions Act 1995 (amounts deemed
to be debts due from an employer).

(3) For the purposes of this section—

Pension Schemes BillPage 10

• “employer” has the meaning given by section 318 of the Pensions Act
  2004;

• “deficit” has the meaning given by the regulations (and the meaning need
  not be the same as in section 21).

24 5Payment of amounts out of collective benefit funds

(1) Regulations must prohibit the making of payments out of funds held for the
purposes of providing collective benefits except for—

(a) payments made for the purpose of providing those benefits, or

(b) other specified payments.

(2) 10The regulations may, in particular, make provision corresponding or similar to
any provision made by section 37 of the Pensions Act 1995 (payment of surplus
to employer in the case of an occupational trust-based scheme).

Cash equivalents

25 Policy for calculating cash equivalent of benefits

(1) 15Regulations may require the trustees or managers of a pension scheme—

(a) to have a policy about the calculation and verification of the cash
equivalent of any collective benefit that may be provided by the
scheme;

(b) to follow that policy in calculating or verifying any cash equivalent.

(2) 20In this section “cash equivalent” means the cash equivalent mentioned in the
following—

(a) section 93A(3) of the Pension Schemes Act 1993;

(b) section 101H(1) of that Act;

(c) section 29(2) and (3) of the Welfare Reform and Pensions Act 1999;

(d) 25any other provision specified in regulations.

(3) Regulations under subsection (1) may, in particular—

(a) require the trustees or managers to consult about the policy;

(b) require the trustees or managers to ensure that the policy is consistent
with any requirements imposed by regulations under section 97 or 101I
30of the Pension Schemes Act 1993 or section 30 of the Welfare Reform
and Pensions Act 1999 or any other specified requirements;

(c) make other provision about the content of the policy;

(d) set out matters that the trustees or managers must take into account, or
principles they must follow, in formulating the policy;

(e) 35make provision about reviewing and revising the policy.

Winding up

26 Winding up

(1) Regulations may make provision about the winding up of a pension scheme
under which collective benefits may be provided or part of such a scheme.

(2) 40The regulations may, in particular, make provision about—

(a) the distribution of assets (including any order of priority);

(b) the operation of the scheme during winding up;

(c) the discharge of liabilities;

(d) excess assets on winding up.

(3) 5The regulations may, in particular—

(a) disapply or amend or otherwise modify the application of any of
sections 38, 73, 73A, 73B, 74 and 76 of the Pensions Act 1995 (winding
up);

(b) make provision corresponding or similar to any provision made by
10those sections.

27 Requirement to wind up scheme in specified circumstances

(1) Regulations may require the trustees or managers of a pension scheme under
which collective benefits may be provided to wind up the whole or part of the
scheme in specified circumstances.

(2) 15The regulations may, in particular—

(a) provide for the winding up of the scheme or part to be as effective in
law as if it had been made under powers conferred by or under the
scheme;

(b) require the scheme or part to be wound up in spite of any legislative
20provision or rule of law, or any scheme rule, which would otherwise
operate to prevent the winding up;

(c) require the scheme or part to be wound up without regard to any
legislative provision, rule of law or scheme rule that would otherwise
require, or might otherwise be taken to require, the implementation of
25any procedure or the obtaining of any consent with a view to the
winding up.

28 Policies about winding up

(1) Regulations may require the trustees or managers of a pension scheme under
which collective benefits may be provided—

(a) 30to have a policy about the winding up of the scheme or part of it;

(b) to follow that policy.

(2) The regulations may, in particular—

(a) require the trustees or managers to consult about the policy;

(b) make provision about the content of the policy;

(c) 35set out matters that the trustees or managers must take into account, or
principles they must follow, in formulating the policy;

(d) make provision about reviewing and revising the policy.

(3) The regulations may, in particular, require the policy—

(a) to contain an explanation of the circumstances in which the trustees or
40managers are permitted or required to wind up the scheme or part and
any requirements about the distribution of assets (including any order
of priority);

(b) to contain an explanation of how the trustees or managers intend to use
any powers to wind up the scheme or part and how they intend to use

any powers in relation to the distribution of assets (including any order
of priority);

(c) to contain an explanation of how the costs of winding up are required
to be met or how the trustees or managers will use any powers to
5decide how those costs are to be met.

Identifying assets

29 Working out which assets are available for the provision of which benefits

Regulations may make provision, in relation to a pension scheme under which
any of the benefits that may be provided are collective benefits, about how to
10work out—

(a) which assets held by the scheme are held for the purposes of providing
collective benefits;

(b) which assets held by the scheme are held for the purposes of providing
which collective benefits;

(c) 15which assets held by the scheme are held for the purposes of providing
any benefits other than collective benefits.

Regulations under Part 2: general

30 Requirement to obtain actuarial advice

(1) Regulations may require the trustees or managers of a pension scheme to
20obtain advice from an actuary before making a specified decision or taking
other specified steps.

(2) The regulations may, in particular, require the trustees or managers to obtain
the advice from an actuary who has specified qualifications or meets other
specified requirements.

(3) 25The regulations—

(a) may require an actuary to have regard to guidance issued from time to
time by a specified person when advising on matters in accordance
with the regulations;

(b) may impose other requirements on an actuary when advising on
30matters in accordance with the regulations.

31 Sub-delegation

Regulations under this Part may confer a discretion on a person.

32 Publication etc of documents

Regulations under this Part requiring the trustees or managers of a pension
35scheme to prepare or obtain any document may impose requirements about—

(a) the publication of the document;

(b) the sending of copies to persons specified in the regulations.

33 Enforcement

Regulations under this Part may provide for section 10 of the Pensions Act 1995
(civil penalties) to apply to a person who fails to comply with the regulations.

34 Overriding requirements

5Regulations under this Part may include provision for them to override the
provisions of a pension scheme to the extent that there is a conflict.

Interpretation of Part 2

35 Interpretation of Part 2

(1) In this Part—

• 10“collective benefit” has the meaning given by section 8;

• “collective benefit investments”, in relation to a scheme, means
  investments held for the purposes of the provision of any collective
  benefits under the scheme;

• “deficit”, in respect of a collective benefit, has the meaning given by
  15section 21 (but this definition does not apply in section 23, which
  contains its own definition);

• “money purchase benefit” has the meaning given by section 181 of the
  Pension Schemes Act 1993;

• “pension scheme” has the meaning given by section 1(5) of the Pension
  20Schemes Act 1993;

• “regulations” means regulations made by the Secretary of State;

• “required range”, in relation to a level of probability, means the range
  specified in regulations under section 9(2)(c);

• “surplus”, in respect of a collective benefit, has the meaning given by
  25section 21;

• “target” means a target required by regulations under section 9;

• “trustees or managers” means—

  (a)

  in relation to a scheme established under a trust, the trustees,
  and

  (b)

  30in relation to any other scheme, the managers;

• “valuation report” has the meaning given by section 19.

(2) A power conferred by this Part to make provision corresponding or similar to
any provision made by a section of another Act includes a power to make
provision corresponding or similar to any provision that may be made by
35regulations under that section.

Part 3 General changes to legislation about pension schemes

Administration and governance

36 Pensions promise obtained from third party

(1) 5The Secretary of State may by regulations provide that the trustees or
managers of a defined benefits scheme or a shared risk scheme must not obtain
a pensions promise from a third party unless conditions specified in the
regulations are met.

(2) Regulations under this section—

(a) 10may provide for a specified provision of the regulations to override a
provision of a scheme to the extent that there is a conflict;

(b) may provide for section 10 of the Pensions Act 1995 (civil penalties) to
apply to a person who fails to comply with the regulations.

(3) In this section—

• 15“defined benefits scheme” has the meaning given by section 2;

• “pensions promise” has the meaning given by section 5;

• “shared risk scheme” has the meaning given by section 3;

• “trustees or managers” means—

  (a)

  in relation to a scheme established under a trust, the trustees,
  20and

  (b)

  in relation to any other scheme, the managers.

(4) In section 34(7) of the Pensions Act 1995 (power of investment and delegation
overrides other legislation etc), for the words from “other than” substitute
“other than an enactment contained in, or made under—

(a) 25this Part,

(b) the Pension Schemes Act 1993, or

(c) section 36 of the Pension Schemes Act 2014.”

37 Duty to act in the best interests of members

(1) The Secretary of State may by regulations impose a duty on the managers of a
30relevant non-trust based scheme to act in the best interests of members when
taking decisions of a specified description.

(2) In this section “relevant non-trust based scheme” means a non-trust based
scheme that is—

(a) a shared risk scheme, or

(b) 35a defined contributions scheme under which any of the benefits that
may be provided are collective benefits.

(3) Regulations under this section—

(a) may provide for the duty to act in the best interests of members to
override obligations that are inconsistent with that duty (including
40obligations imposed by any instrument, enactment or rule of law), but

(b) do not otherwise affect any duty that might arise apart from this
section.

(4) Regulations under this section may provide for the consequences of a manager
breaching (or threatening to breach) the duty to act in the best interests of
members to be the same as the consequences of breaching (or threatening to
breach) a fiduciary duty owed by the manager to the members and,
5accordingly, for the duty to be enforceable in the same way as a fiduciary duty.

(5) In this section—

• “collective benefit” has the meaning given by section 8;

• “defined contributions scheme” has the meaning given by section 4;

• “non-trust based scheme” means a scheme that is not established under a
  10trust;

• “shared risk scheme” has the meaning given by section 3.

38 Disclosure of information about schemes

(1) Section 113 of the Pension Schemes Act 1993 (disclosure of information about
schemes to members etc) is amended as follows.

(2) 15In subsection (1)—

(a) in the opening words, for “the persons mentioned in subsection (2)”
substitute “persons of prescribed descriptions”;

(b) in paragraph (ca), omit “to the member” and “by him”.

(3) Omit subsection (2).

(4) 20Before subsection (3) insert—

“(2A) In complying with requirements specified in the regulations, a person
must have regard to any guidance prepared from time to time by the
Secretary of State.”

(5) For subsection (4) substitute—

“(4) 25Where the regulations specify requirements to be complied with in the
case of an occupational pension scheme with respect to keeping
recognised trade unions informed, the regulations must make
provision for referring to an employment tribunal any question
whether an organisation is a recognised trade union.

(4A) 30For the purposes of subsection (4) a trade union is a recognised trade
union in relation to an occupational pension scheme if it is an
independent trade union recognised to any extent for the purposes of
collective bargaining in relation to members and to prospective
members of the scheme.”

(6) 35In subsection (5), for “some or all of the persons mentioned in subsection (2)”
substitute “persons of a prescribed description”.

(7) Omit paragraph 17 of Schedule 12 to the Pensions Act 2004, which is no longer
needed given subsection (3).

Early leavers

39 40Extension of preservation of benefit under occupational pension schemes

(1) Part 4 of the Pension Schemes Act 1993 (protection for early leavers) is
amended as follows.

(2) In section 71 (basic principle as to short service benefit)—

(a) in subsection (1), for paragraph (aa) (but not the “or” at the end)
substitute—

“(aa) he has at least 30 days’ qualifying service and, if he were
5entitled to benefit because of this paragraph, all of it
would necessarily be benefit falling within subsection
(1A),”;

(b) after subsection (1) insert—

“(1A) The following fall within this subsection—

(a) 10collective benefits;

(b) benefits calculated otherwise than by reference to the
member’s salary.”

(3) In section 70 (interpretation of Chapter 1: preservation requirements), in
subsection (1)—

(a) 15after the definition of “relevant employment” insert—

• ““benefits”, in relation to a member of a scheme, means—

  (a)

  retirement benefit for the member at normal
  pension age, or

  (b)

  benefit for the member’s wife, husband, civil
  20partner, widow, widower, surviving civil
  partner or dependants or others on the
  member’s attaining normal pension age or the
  member’s later death, or

  (c)

  both such descriptions of benefit;”;

(b) 25in the definition of “long service benefit” omit the words from “and in
this definition “benefits” means” to the end of the definition.

(4) In section 71, for subsections (7) to (11) substitute—

“(7) In subsection (1), “2 years’ qualifying service” or (as the case may be)
“30 days’ qualifying service” means a period of service of the relevant
30duration in which the member was at all times employed either—

(a) in pensionable service under the scheme, or

(b) in service in employment which was contracted-out by
reference to the scheme, or

(c) in linked qualifying service under another scheme.

(8) 35For the purposes of subsection (7)—

(a) a period of service may consist of a single period or two or more
periods, continuous or discontinuous;

(b) no regard is to be had to whether or not the service was of the
same description throughout the period of service.

(9) 40A period of service previously terminated is not to count towards the 2
years’ or (as the case may be) 30 days’ qualifying service unless it
counts towards qualification for long service benefit, and need then
count only to the same extent and in the same way.

(10) Subsection (1)(aa) does not apply in relation to a person’s membership
45of a scheme if—

(a) in a case where the benefit would necessarily all be money
purchase benefit, any period of relevant service began before

the day on which section 36 of the Pensions Act 2014 came into
force (whether or not it also ended before that date);

(b) in any other case, any period of relevant service began before
the day on which section 39 of the Pension Schemes Act 2014
5came into force (whether or not it also ended before that date).