SCHEDULE 4 continued PART 1 continued
Pension Schemes BillPage 90
17
(1)
Section 101H (salary related schemes: statements of entitlement) is amended
as follows.
(2) For subsection (1) substitute—
“(1)
The trustees or managers of a qualifying scheme must, on the
5application of an eligible member, provide the member with a
written statement of the amount of the cash equivalent of the
member’s pension credit rights in relation to categories of benefits
other than money purchase benefits.
(1A)
In the case of a member with pension credit rights in relation to two
10categories of benefits other than money purchase benefits, the
application may relate to pension credit rights in relation to either or
both of those categories.”
(3)
In the heading for “Salary related schemes” substitute “Benefits other than
money purchase”.
18
(1)
15Section 101J (time for compliance with transfer notice) is amended as
follows.
(2) In subsection (1), for paragraphs (a) and (b) substitute—
“(a)
in the case of an application that relates to benefits other than
money purchase benefits, within 6 months beginning with
20the valuation date, and
(b)
in the case of an application that relates to money purchase
benefits, within 6 months of the date on which the notice is
given.”
(3) For subsection (7) substitute—
“(7)
25In subsection (1)(a), “valuation date” means the date by reference to
which the amount shown in the relevant statement under section
101H is determined.”
19
In section 101M (effect of transfer on trustees’ duties), for the words from
“pension credit benefit” to the end of the section substitute “benefits to
30which the transfer notice relates”.
20 After section 101N insert—
Except as mentioned in sections 96(4) and 101G(4), a pension scheme
may not contain rules that would have the effect of—
(a)
35preventing a member from exercising a right under this
Chapter in relation to a category of benefits without also
exercising a right under this Chapter or otherwise to require
a transfer payment to be made in respect of another category
of benefits, or
(b)
40preventing a member who exercises a right under this
Chapter in relation to a category of benefits from accruing
rights to benefits in another category.”
21 (1) Section 101P (interpretation) is amended as follows.
Pension Schemes BillPage 91
(2) In subsection (1), at the appropriate places insert—
““category”, in relation to benefits, has the meaning given by
section 101F(6B);”
““flexible benefit” has the meaning given by section 74 of the
5Pension Schemes Act 2015;”.
(3) In that subsection, omit the definition of “pension credit benefit”.
(4) Omit subsection (2).
(5)
In subsection (3), for “given to the trustees or managers of a salary related
occupational pension scheme” substitute “in relation to benefits other than
10money purchase benefits”.”
22 Omit section 101Q.
23
In section 129 (overriding requirements), in subsection (1), for “Chapters II,
III, IV and V of Part IV” substitute “Chapters 2 and 3 of Part 4, Chapters 1
and 2 of Part 4ZA”.
24
15In section 130 (extra-statutory benefits), in paragraph (b), for “Chapter II, IV
or V of Part IV” substitute “Chapter 2 of Part 4 or Chapter 1 or 2 of Part 4ZA”.
25
In section 153 (power to modify certain provisions), in subsection (1), for
“Chapters II, III and IV of Part IV” substitute “Chapters 2 and 3 of Part 4 and
Chapter 1 of Part 4ZA”.
26 20In section 179 (linked qualifying service), in subsection (1)(a)—
(a)
in the opening words, for “Chapter 4 or 5 of Part 4” substitute
“Chapter 1 or 2 of Part 4ZA”;
(b) in sub-paragraph (iii)—
(i) for “Chapter 4 of Part 4” substitute “Chapter 1 of Part 4ZA”;
(ii) 25for “Chapter 5” substitute “Chapter 2”.
27
In section 181 (interpretation), in subsection (1), in paragraph (b) of the
definition of “transfer credits”, for “Chapter 5 of Part 4” substitute “Chapter
2 of Part 4ZA”.
28 30The Pensions Act 1995 is amended as follows.
29
In section 67A (the subsisting rights provisions: interpretation), in
subsection (9)(a), for sub-paragraph (ii) substitute—
“(ii)
Chapter 2 or 3 of Part 4 of the Pension Schemes Act
1993 (certain protection for early leavers) or
35regulations made under either of those Chapters;
(iia)
Chapter 1 or 2 of Part 4ZA of that Act (transfers and
contribution refunds) or regulations made under
either of those Chapters;”.
30
In section 73 (preferential liabilities on winding up), in subsection (9), for
40“Chapter 5 of Part 4” substitute “Chapter 2 of Part 4ZA”.
31
In section 73B (sections 73 and 73A: supplementary), in subsection (7), for
“Chapter 4 of Part 4” substitute “Chapter 1 of Part 4ZA”.
Pension Schemes BillPage 92
32
In section 124 (interpretation of Part 1), in subsection (1), in paragraph (b) of
the definition of “transfer credits”, for “Chapter 5 of Part 4 of the Pension
Schemes Act 1993 (early leavers)” substitute “Chapter 2 of Part 4ZA of the
Pension Schemes Act 1993 (transfers and contribution refunds)”.
33
In section 135 (pensions: interpretation), in subsection (4), for “section
93(1A)” substitute “section 100D”.
34 The Pensions Act 2004 is amended as follows.
35 (1) 10Section 18 (pension liberation: interpretation) is amended as follows.
(2) In subsection (2)(a)—
(a) after “accrued rights” insert “or an entitlement”;
(b)
in sub-paragraph (ii), for “the applicable rules” substitute “the
scheme rules”.
(3) 15In subsection (3)—
(a) for paragraph (a) substitute—
“(a)
section 94 of the Pension Schemes Act 1993 (right to
cash equivalent under Chapter 1 of Part 4ZA of that
Act);”;
(b)
20in paragraph (b), for “Chapter 5 of Part 4” substitute “Chapter 2 of
Part 4ZA”.
(4) In subsection (4)(d), for “the applicable rules” substitute “the scheme rules”.
(5) Omit subsection (5).
36
In section 23 (freezing orders), in subsection (4)(g), for “salary related
25schemes” substitute “benefits other than money purchase”.
37
In section 24 (consequences of freezing order), in subsection (7), for
paragraphs (a) and (b) substitute—
“(a)
Chapter 1 of Part 4ZA of the Pension Schemes Act 1993
(transfer rights: general), or
(b)
30Chapter 2 of that Part (early leavers: cash transfer sums and
contribution refunds),”.
38 In section 73 (inspection of premises), in subsection (2)(d)—
(a) for “Chapter 4 of Part 4” substitute “Chapter 1 of Part 4ZA”;
(b) for “Chapter 5 of Part 4” substitute “Chapter 2 of Part 4ZA”.
39
35In section 135 (restrictions on winding up, discharge of liabilities etc), in
subsection (6)(b), for “Chapter 5 of Part 4” substitute “Chapter 2 of Part
4ZA”.
40
In section 138 (payment of scheme benefits), in subsection (3)(b), for
“Chapter 5 of Part 4” substitute “Chapter 2 of Part 4ZA”.
41 (1) 40Section 318 (interpretation) is amended as follows.
(2)
In subsection (2), for “an occupational pension scheme” substitute “a
pension scheme”.
Pension Schemes BillPage 93
(3) In subsection (3)(a), for sub-paragraph (ii) substitute—
“(ii)
Chapter 2 or 3 of Part 4 of the Pension Schemes Act
1993 (certain protection for early leavers) or
regulations made under either of those Chapters;
(iia)
5Chapter 1 or 2 of Part 4ZA of that Act (transfers and
contribution refunds) or regulations made under
either of those Chapters;”.
42 (1) Schedule 7 (pension compensation provisions) is amended as follows.
(2)
In paragraph 20(1)(c), for “Chapter 5 of Part 4” substitute “Chapter 2 of Part
104ZA”.
(3)
In paragraph 32(1)(b), for “Chapter 5 of Part 4” substitute “Chapter 2 of Part
4ZA”.
43
(1)
Schedule 1 to the Scottish Parliamentary Pensions Act 2009 (Scottish
15Parliamentary Pension Scheme) is amended as follows.
(2)
In paragraph 75, in Condition 6, for “section 93A(2)” substitute “section
93A(4)”.
(3)
In paragraph 91(2)(g), for “Chapter 4 of Part 4” substitute “Chapter 1 of Part
4ZA”.
44 The Pensions Act 2014 is amended as follows.
45
In section 34 (power to prohibit offer of incentives to transfer pension rights),
in subsection (7), in the definition of “salary related occupational pension
scheme”, for “section 93(1A)” substitute “section 100D”.
46 25In Schedule 17 (automatic transfer of pension benefits etc), in paragraph 1—
(a)
in sub-paragraph (4)(d), for “applicable rules” substitute “scheme
rules”;
(b) for sub-paragraph (6) substitute—
“(6) In sub-paragraph (4)—
(a)
30the reference to “scheme rules” is to be read in
accordance with section 100B of the Pension
Schemes Act 1993;
(b) “benefits” means—
(i)
money purchase benefits other than money
35purchase benefits of a prescribed
description, or
(ii) benefits of a prescribed description.”
Pension Schemes BillPage 94
47
In Schedule 1A to the Judicial Pensions Act 1981 (transfer of accrued
5benefits), in paragraph 3, for “Chapter IV of Part IV of the Pension Schemes
(Northern Ireland) Act 1993” substitute “Chapter 1 of Part 4ZA of the
Pension Schemes (Northern Ireland) Act 1993”.
48
In Schedule 2 to the Judicial Pensions and Retirement Act 1993 (transfer of
10accrued benefits), in paragraph 3, for “Chapter IV of Part IV of the Pension
Schemes (Northern Ireland) Act 1993” substitute “Chapter 1 of Part 4ZA of
the Pension Schemes (Northern Ireland) Act 1993”.
49 The Pension Schemes (Northern Ireland) Act 1993 is amended as follows.
50
(1)
15Chapters 4 and 5 of Part 4 of the Act become Chapters 1 and 2 of a new
Part 4ZA.
(2) Accordingly—
(a) before section 89 (and before the Chapter heading above it) insert—
(b) for the Chapter heading above section 89 substitute—
(c) 20for the Chapter heading above section 97AA substitute—
51
In section 20F (transfers out of GMP-converted schemes), in subsection (3),
omit “guaranteed”.
52
In section 52 (payment of state scheme premiums on termination of certified
status: supplementary), in subsection (4)(b), for “Chapter 5 of Part IV”
25substitute “Chapter 2 of Part 4ZA”.
53
In section 69 (form of short service benefit and its alternatives), in subsection
(3), for “Chapter IV of this Part” substitute “Chapter 1 of Part 4ZA”.
Pension Schemes BillPage 95
54 For sections 89 to 90 substitute—
(1)
This Chapter applies to a member of a pension scheme if all of the
following conditions are met.
(2)
5Condition 1 is that the member has accrued rights to any category of
benefits under the scheme rules.
(3)
Condition 2 is that no crystallisation event has occurred in relation to
the member’s accrued rights to benefits in that category (see
subsection (7)).
(4) 10Condition 3 is that—
(a)
the member is no longer accruing rights to benefits in that
category (see subsection (8)), and
(b)
in the case of benefits that are not flexible benefits, the
member stopped accruing those rights at least one year
15before normal pension age.
(5) But this Chapter does not apply to—
(a)
a member of a salary related occupational pension scheme
whose pensionable service terminated before 1 January 1986
and in respect of whom prescribed requirements are
20satisfied;
(b)
a member of a personal pension scheme which is comprised
in an annuity contract made before 4 January 1988.
(6)
In this Chapter a reference to a “category” of benefits is to one of the
following three categories—
(a) 25money purchase benefits;
(b) flexible benefits other than money purchase benefits;
(c) benefits that are not flexible benefits.
(7)
For the purposes of Condition 2 a crystallisation event occurs in
relation to a member’s accrued rights to benefits in a category
30when—
(a)
payment of a pension in respect of any of the benefits has
begun,
(b)
in the case of money purchase benefits, sums or assets held
for the purpose of providing any of the benefits are
35designated as available for the payment of drawdown
pension (as defined by paragraph 4 of Schedule 28 to the
Finance Act 2004), or
(c)
in the case of a personal pension scheme, sums or assets held
for the purpose of providing any of the benefits are applied
40for purchasing an annuity or insurance policy.
(8)
For the purposes of Condition 3 a member stops accruing rights to a
category of benefits when there are no longer arrangements in place
for the accrual of rights to benefits in that category for or in respect
of the member.
(9)
45In this section a reference to accrued rights does not include pension
credit rights.
Pension Schemes BillPage 96
(10) Regulations may—
(a)
provide for this Chapter not to apply in relation to a person
of a prescribed description;
(b)
modify the application of this Chapter in relation to a
5member who has accrued rights to benefits of a prescribed
description.
(11) In the following provisions of this Chapter—
(a)
a reference to a “member” of a pension scheme is a reference
to a member to whom this Chapter applies, and
(b)
10a reference to a member’s “transferrable rights” are to any
rights in relation to a category of benefits by virtue of which
this Chapter applies to the member.
(1)
The trustees or managers of a pension scheme must, on the
15application of any member, provide the member with a statement of
entitlement in respect of the member’s transferrable rights in relation
to categories of benefits other than money purchase benefits.
(2)
In the case of a member with transferrable rights in relation to two
categories of benefits other than money purchase benefits, the
20application may relate to transferrable rights in relation to either or
both of those categories.
(3)
For the purposes of this Chapter a member’s “statement of
entitlement” is a written statement of the amount of the cash
equivalent at the guarantee date of the transferrable rights to which
25the application under subsection (1) relates.
(4)
In this Chapter “the guarantee date” means the date by reference to
which the value of the cash equivalent is calculated, and must be—
(a)
within the prescribed period beginning with the date of the
application, and
(b)
30within the prescribed period ending with the date on which
the statement of entitlement is provided to the member.
(5)
Regulations may make provision in relation to applications under
this section and may, in particular, restrict the making of successive
applications.
(6)
35If the trustees or managers of a pension scheme fail to comply with
subsection (1), Article 10 of the Pensions (Northern Ireland) Order
1995 (civil penalties) applies to any trustee or manager who has
failed to take all reasonable steps to secure compliance.
(1)
40A member of a pension scheme who has received a statement of
entitlement under section 89A acquires a right to take the cash
equivalent shown in that statement in accordance with this Chapter.
(2)
A member of a pension scheme who has transferrable rights in
relation to money purchase benefits acquires a right to take their cash
45equivalent in accordance with this Chapter.”
55 (1) Section 91 (ways of taking right to cash equivalent) is amended as follows.
Pension Schemes BillPage 97
(2) For subsection (1) substitute—
“(1)
A member of a pension scheme who has acquired a right to take a
cash equivalent in accordance with this Chapter may only take it by
making an application in writing to the trustees or managers of the
5scheme requiring them to use the cash equivalent in one of the ways
specified below.
(1A)
In the case of a right acquired under section 90(1), the application
must be made—
(a)
within the period of 3 months beginning with the guarantee
10date shown in the relevant statement of entitlement, and
(b)
if the cash equivalent relates to benefits that are not flexible
benefits, by no later than the date that falls one year before
the member attains normal pension age.”
(3)
In subsections (2)(a)(i) and (b)(i) and (3)(a)(i) and (b)(i), for “accrued rights”
15substitute “transferrable rights”.
(4) Omit subsections (7) and (8).
56
(1)
Section 92 (further provisions concerning exercise of option under section
91) is amended as follows.
(2) For subsection (1) substitute—
“(1)
20A member who has acquired a right to take a cash equivalent under
section 90(1) or (2) may exercise the option conferred by section 91(1)
in relation to different portions of that cash equivalent in different
ways, but a member who exercises that option must do so—
(a) in relation to the whole of that cash equivalent, or
(b)
25if subsection (2) applies, in relation to the whole of the
balance mentioned in subsection (3).”
(3)
In subsection (2), in paragraphs (a) and (b), for each “accrued rights”
substitute “transferrable rights”.
(4) For subsection (4) substitute—
“(4) 30Where a member of a pension scheme—
(a)
is entitled to make an application under section 91(1) in
relation to any category of benefits, and
(b)
is also entitled to give a transfer notice under section 97F(1)
to the trustees or managers of the scheme in relation to
35benefits in the same category (or would be entitled to do so
but for section 97G(2)),
the member may not, if the scheme so provides, make an application
under section 91(1) in relation to that category of benefits without
also giving a transfer notice under section 97F(1) in relation to that
40category of benefits.”
57 (1) Section 93 (calculation of cash equivalents) is amended as follows.
(2) After subsection (1) insert—
“(1A)
Where a member applies under section 91 to take a cash equivalent
that relates to money purchase benefits, the cash equivalent is to be
45calculated by reference to the date of the application.”
Pension Schemes BillPage 98
(3) In subsection (2)—
(a)
in paragraph (a), in the opening words, for “except guaranteed cash
equivalents (as defined in section 90(1A))” substitute “that relate to
money purchase benefits”;
(b)
5in paragraph (aa), for “, including a guaranteed cash equivalent,”
substitute “that relates to any category of benefits”.
(4) In subsection (3), omit paragraph (a).
(5) For subsection (3A) substitute—
“(3A) For the purposes of subsection (3), the “appropriate date”—
(a)
10in relation to a cash equivalent that relates to benefits other
than money purchase benefits, means the guarantee date for
the purposes of the relevant statement of entitlement under
section 89A, and
(b)
in relation to a cash equivalent that relates to money purchase
15benefits, means the date on which the trustees or managers
receive an application from the member under section 91.”
58 For section 94 substitute—
(1)
A member of a pension scheme who acquires the right to take a cash
20equivalent under section 90(1) loses that right if no application to
take the cash equivalent is made within the period specified in
section 91(1A) (but this does not prevent the member later acquiring
a new right to take a cash equivalent under section 90(1) in relation
to the same benefits).
(2)
25A member of a pension scheme loses the right to take a cash
equivalent in accordance with this Chapter if the scheme is wound
up.”
59 (1) Section 95 (trustees’ duties after exercise of option) is amended as follows.
(2) For subsection (2) substitute—
“(2)
30Subject to the following provisions of this section, if the trustees or
managers of a scheme receive an application under section 91 they
must do what is needed to carry out what the member requires—
(a)
in the case of an application that relates to benefits other than
money purchase benefits, within 6 months beginning with
35the guarantee date shown in the relevant statement of
entitlement, and
(b)
in the case of an application that relates to money purchase
benefits, within 6 months beginning with the date of the
application.”
(3)
40In subsection (3)(a) omit “at any time before the expiry of the period of 12
months beginning with the termination date”.
(4) Omit subsection (3A).
Pension Schemes BillPage 99
60 After section 96 insert—
Except as mentioned in sections 92(4) and 97G(4), a pension scheme
may not contain rules that would have the effect of—
(a)
5preventing a member from exercising a right under this
Chapter in relation to a category of benefits without also
exercising a right under this Chapter or otherwise to require
a transfer payment to be made in respect of another category
of benefits, or
(b)
10preventing a member who exercises a right under this
Chapter in relation to a category of benefits from accruing
rights to benefits in another category.
(1)
In this Chapter references to the scheme rules, in relation to a pension
15scheme, are references to—
(a)
the rules of the scheme, except so far as overridden by a
relevant legislative provision,
(b)
the relevant legislative provisions, to the extent that they
have effect in relation to the scheme and are not reflected in
20the rules of the scheme, and
(c)
any provision which the rules of the scheme do not contain
but which the scheme must contain if it is to conform with the
requirements of Chapter 1 of Part 4.
(2)
For the purposes of subsection (1)—
(a)
25“relevant legislative provision” means any provision
contained in any of the following provisions—
(i)
Schedule 5 to the Social Security (Northern Ireland)
Order 1989;
(ii)
Chapter 2 or 3 of Part 4 or regulations made under
30either of those Chapters;
(iii) this Part or regulations made under this Part;
(iv) Part 4A or regulations made under that Part;
(v) section 106(1);
(vi)
Part 2 of the Pensions (Northern Ireland) Order 1995
35or orders or regulations made or having effect as if
made under that Part;
(vii)
Article 28 of the Welfare Reform and Pensions
(Northern Ireland) Order 1999;
(viii)
any provision mentioned in Article 279(2) of the
40Pensions (Northern Ireland) Order 2005;
(ix) section 61 of the Pension Schemes Act 2015;
(x)
regulations made under section 62 or 63 of the
Pension Schemes Act 2015;
(b)
a relevant legislative provision is to be taken to override any
45of the provisions of the scheme if, and only if, it does so by
virtue of any of the following provisions—
(i)
paragraph 3 of Schedule 5 to the Social Security
(Northern Ireland) Order 1989;
(ii) section 125(1);