Pension Schemes Bill (HL Bill 63)

“Relevant service” means service that counts towards the 30 days’
qualifying service for the purposes of subsection (1)(aa).”

(5) In section 74 (computation of short service benefit), in subsections (3) and (4),
after “so much of any benefit” insert “, other than collective benefit,”.

(6) 10In section 36 of the Pensions Act 2014, omit subsections (2) and (3) which are
no longer needed given the earlier provisions of this section.

40 Revaluation of accrued benefits

Schedule 1 contains amendments about the revaluation of benefits.

Indexation

41 15Collective benefits exempt from indexation

(1) In section 51 of the Pensions Act 1995 (annual increase in rate of pension)—

(a) in subsection (1), for “Subject to subsections (6) and (7)” substitute
“Subject to subsections (6) to (7A)”;

(b) after subsection (7) insert—

“(7A) 20This section does not apply to any pension, or part of a pension,
that is a collective benefit.”

(2) Omit section 21(2) of the Pensions Act 2011, which is no longer needed given
subsection (1).

42 Regulatory own fund schemes exempt from indexation

(1) 25Section 51 of the Pensions Act 1995 (annual increase in rate of pension) is
amended as follows.

(2) In subsection (1)(a)(ii) (scheme based exemption) after “public service pension
scheme” insert “or a regulatory own fund scheme (see subsection (9))”.

(3) After subsection (8) insert—

“(9) 30In subsection (1)(a)(ii) “regulatory own fund scheme” means a scheme
in respect of which Article 17 of Council Directive 2003/41/EC of 3
June 2003 on the activities and supervision of institutions for
occupational retirement provision applies.

(10) Regulations may amend subsection (9) to replace the reference to the
35Article mentioned there with a reference to any provision of an EU
instrument that replaces it (with or without changes).”

43 Power to create other exemptions from indexation

(1) In section 51 of the Pensions Act 1995 (annual increase in rate of pension), after

subsection (5) insert—

“(5A) Regulations may provide that this section does not apply to a pension,
or part of a pension, of a specified description.

(5B) But regulations under subsection (5A) may not be made in respect of—

(a) 5a pension, or any part of a pension, under a defined benefits
scheme,

(b) a pension, or any part of a pension, which came into payment
before the day on which the regulations come into force, or

(c) a pension, or any part of a pension, which is attributable to
10pensionable service before the day on which the regulations
come into force.

(5C) Regulations under subsection (5A) may amend this Part.”

(2) In section 175(2) of that Act (statutory instruments subject to affirmative
procedure), before paragraph (a) insert—

“(za) 15section 51(5A),”.

Independent trustees

44 Removal of requirement to maintain register of independent trustees

(1) Section 23 of the Pensions Act 1995 (power to appoint an independent trustee
of an occupational pension scheme on the insolvency of the person who is the
20employer in relation to the scheme etc) is amended as follows.

(2) In subsection (1), omit paragraph (b) (requirement for the trustee to be
registered in a register maintained by the Pensions Regulator) and the “and”
before it.

(3) Omit subsections (4) to (6) (regulations to provide for there to be a register of
25independent trustees).

Rules about modification of schemes

45 Rules about modification of schemes

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

(2) In section 67 (the subsisting rights provisions)—

(a) 30in subsection (3), omit paragraph (b) and the “or” before it;

(b) after subsection (3) insert—

“(3A) Regulations may provide for cases in which the subsisting
rights provisions do not apply.”

(3) In section 67A (the subsisting rights provisions: interpretation), in subsection
35(3) (meaning of “protected modification”), after paragraph (a) insert—

“(aa) on taking effect would or might result in any subsisting right of
a member of the scheme which is a right to benefits in respect of
which there is a pensions promise becoming, or being replaced
with, a right to benefits under the scheme rules in respect of
40which there is no pensions promise,

(ab) on taking effect would or might result in any subsisting right of
a member of the scheme which is a right to retirement income
in respect of which there is a pensions promise becoming, or
being replaced with, a right to benefits other than retirement
5income,

(ac) on taking effect would or might result in any subsisting right
of—

(i) a member of the scheme, or

(ii) a survivor of a member of the scheme,

10being replaced with a right or entitlement to collective benefits
under the scheme rules,”.

(4) In subsection (3)(b) of that section, after “rules” insert “, other than a pension
that is a collective benefit”.

(5) In subsection (5)(a) of that section, after “paragraph (a)” insert “, (aa), (ab),
15(ac)”.

(6) In subsection (9) of that section—

(a) in paragraph (a), after sub-paragraph (vii) insert—

“(viii) regulations made under Part 2 of the Pension Schemes
Act 2014;”;

(b) 20in paragraph (b), after sub-paragraph (v) insert—

“(vi) regulations made under section 34 of the Pension
Schemes Act 2014.”

(7) In section 124 (interpretation), in subsection (1), at the appropriate places
insert—

• 25““pensions promise” has the meaning given by section 5 of the
  Pension Schemes Act 2014;”;

• ““retirement income” has the meaning given by section 7 of the
  Pension Schemes Act 2014;”.

Other amendments

46 30Other amendments to do with Parts 1 and 2

Schedule 2—

(a) contains amendments to do with Parts 1 and 2, and

(b) replaces references to “money purchase scheme” so as to limit the
number of different ways of categorising pension schemes.