Pension Schemes Bill (HL Bill 79)

(3) After section 93 insert—

“93A Designation of funded public service defined benefits schemes

(1) The relevant Department may designate a funded public service
defined benefits scheme as a scheme to which regulations under section
593B are to apply for a specified period of no more than 2 years.

(2) The power under subsection (1) may be exercised only if the relevant
Department considers that—

(a) there is an increased likelihood of payments out of public funds,
or increased payments out of public funds, having to be made
10into the scheme so that it can meet its liabilities, and

(b) the increased likelihood is connected with the exercise or
expected future exercise of rights to take a cash equivalent
acquired under section 90.

(3) The power under subsection (1) may be exercised in relation to the
15whole or any part of a scheme.

(4) In the application of subsection (2) to part of a scheme, paragraph (a) is
to be read as if it referred to the scheme’s liabilities relating to that part.

(5) A designation under subsection (1)—

(a) may be extended (on more than one occasion) for a period of no
20more than 2 years;

(b) may be revoked.

(6) The relevant Department must give notice in writing of a designation
or its extension or revocation to the trustees or managers of the scheme
(except in a case where the relevant Department is the trustees or
25managers).

(7) If the trustees or managers of a funded public service defined benefits
scheme, or part of such a scheme, that is not designated under this
section consider that the conditions in paragraphs (a) and (b) of
subsection (2) are met in relation to the scheme or part they must
30notify—

(a) the Department of Finance and Personnel, and

(b) (where relevant) each Northern Ireland department by whom,
or with whose approval, the scheme was established.

(8) If the trustees or managers of a scheme, or part of a scheme, that is
35designated under this section consider that the conditions in
paragraphs (a) and (b) of subsection (2) are no longer met in relation to
the scheme or part they must notify—

(a) the Department of Finance and Personnel, and

(b) (where relevant) each Northern Ireland department by whom,
40or with whose approval, the scheme was established.

(9) In this section—

• “funded public service defined benefits scheme” means a public
  service pension scheme that—

  (a)

  is a defined benefits scheme within the meaning given
  45by section 34 of the Public Service Pensions Act
  (Northern Ireland) 2014, and

  Pension Schemes BillPage 41

  (b)

  meets its liabilities out of a fund accumulated for the
  purpose during the life of the scheme;

• “local authority” means a district council constituted under
  section 1 of the Local Government Act (Northern Ireland) 1972;

• 5“payment out of public funds” means a payment provided
  directly or indirectly—

  (a)

  out of the Northern Ireland Consolidated Fund, or

  (b)

  by a local authority;

• “the relevant Department”, in relation to a funded public service
  10defined benefits scheme, means either of the following—

  (a)

  the Department of Finance and Personnel, or

  (b)

  any Northern Ireland department by whom, or with
  whose approval, the scheme was established.

(10) The Department of Finance and Personnel may by regulations make
15modifications of the definition of “the relevant Department” in
subsection (9).”

(4) After section 93A (inserted by subsection (3)) insert—

“93B Reduction of cash equivalents in case of section 93A designated
schemes

(1) 20The Department of Finance and Personnel may by regulations provide
that where, under section 91(1), a member of a designated scheme
requires the trustees or managers to use a cash equivalent for acquiring
a right or entitlement to flexible benefits under the rules of another
pension scheme the cash equivalent must be reduced by an amount
25determined in accordance with the regulations.

(2) Regulations under subsection (1) may not require a reduction in cases
where a scheme ceases to be a designated scheme before the date on
which the trustees or managers do what is needed to carry out what the
member requires.

(3) 30Regulations under subsection (1) may produce the result (alone or in
conjunction with regulations under section 93) that the amount by
which a cash equivalent is to be reduced is such an amount that a
member has no right to receive anything.

(4) In subsection (1), “designated scheme” means a funded public service
35defined benefits scheme, or part of such a scheme, that (on the date of
the application under section 91(1)) is designated under section 93A.”

73 Sections 71 and 72: consequential amendments

(1) In the Pension Schemes (Northern Ireland) Act 1993, in section 176 (general
interpretation), in subsection (1), in the definition of “regulations”, after
40“means” insert “, unless the context otherwise requires,”.

(2) In that Act, in section 181 (Assembly etc control of regulations and orders)—

(a) in subsection (2) (regulations and orders subject to confirmatory
procedure), at the end insert “and to regulations made by the
Department of Finance and Personnel under section 93A(10)”;

(b) in subsection (4) (regulations and orders subject to negative resolution),
for “shall” substitute “and regulations made by the Department of
Finance and Personnel under section 91 or 93B shall”.

(3) In the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)S.I. 2005/255 (N.I. 1)), in Article
514 (pension liberation: interpretation), in paragraph (4)(a) (meaning of
“authorised way”), omit “subsection (2) or, as the case may be, subsection (3)
of”.

CHAPTER 5 Interpretation of Part 4

74 Meaning of “flexible benefit”

10In this Part “flexible benefit”, in relation to a member of a pension scheme or a
survivor of a member, means—

(a) a money purchase benefit,

(b) a cash balance benefit, or

(c) a benefit, other than a money purchase benefit or cash balance benefit,
15calculated by reference to an amount available for the provision of
benefits to or in respect of the member (whether the amount so
available is calculated by reference to payments made by the member
or any other person in respect of the member or any other factor).

75 Meaning of “cash balance benefit”

(1) 20In this Part “cash balance benefit”, in relation to a member of a pension scheme
or a survivor of a member, means a benefit calculated by reference to an
amount available for the provision of benefits to or in respect of the member
(“the available amount”) where there is a promise about that amount.

(2) But a benefit is not a “cash balance benefit” if, under the scheme—

(a) 25a pension may be provided from the available amount to or in respect
of the member, and

(b) there is a promise about the rate of that pension.

(3) The promise mentioned in subsection (1) includes, in particular, a promise
about the change in the value of, or the return from, payments made by the
30member or any other person in respect of the member.

(4)
The promise mentioned in subsection (2)(b) includes a promise that—

(a) the available amount will be sufficient to provide a pension of a
particular rate;

(b) the rate of a pension will represent a particular proportion of the
35available amount.

(5) A benefit is not excluded from the definition of “cash balance benefit” by
subsection (2) merely because under the scheme there is a promise that—

(a) the rate or amount of the benefit payable in respect of a deceased
member will be a particular proportion of the rate or amount of the
40benefit which was (or would have been) payable to the member, or

(b) the amount of a lump sum payable to a member, or in respect of a
deceased member, will represent a particular proportion of the
available amount.

76 Interpretation of Part 4

5UK definitions

(1) In this Part—

• “cash balance benefit” has the meaning given by section 75;

• “dependants’ drawdown pension”, in relation to a survivor, has the
  meaning given by paragraph 18 of Schedule 28 to the Finance Act 2004;

• 10“drawdown pension”, in relation to a member, has the meaning given by
  paragraph 4 of Schedule 28 to the Finance Act 2004;

• “flexible benefit” has the meaning given by section 74;

• “nominees’ drawdown pension”, in relation to a survivor, has the
  meaning given by paragraph 27B of Schedule 28 to the Finance Act
  152004;

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

  (a)

  the earliest age at which, or earliest occasion on which, the
  member or survivor is entitled to receive the benefit without
  20adjustment for taking it early or late (disregarding any special
  provision as to early payment on the grounds of ill health or
  otherwise), or

  (b)

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

• 25 “subsisting right”—

  (a)

  in relation to a member of a pension scheme means—

  (i)

  any right which has accrued to or in respect of the
  member to future benefits under the scheme, or

  (ii)

  any entitlement to benefits under the scheme,

  (b)

  30in relation to a survivor of a member of a pension scheme,
  means any right to future benefits, or entitlement to benefits,
  which the survivor has under the scheme in respect of the
  member;

• “successors’ drawdown pension”, in relation to a survivor, has the
  35meaning given by paragraph 27G of Schedule 28 to the Finance Act
  2004;

• “survivor”, in relation to a member of a pension scheme, means a person
  who has survived the member and has a right to future benefits, or is
  entitled to benefits, under the scheme in respect of the member;

• 40“trustees or managers” means—

  (a)

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

  (b)

  in relation to any other scheme, the managers;

• “uncrystallised funds pension lump sum” has the meaning given by
  45paragraph 4A of Schedule 29 to the Finance Act 2004.

Great Britain only definitions

(2)
In any provision of this Part as it extends to England and Wales and Scotland—

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

Pension Schemes BillPage 44

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

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

5Northern Ireland only definitions

(3)
In any provision of this Part as it extends to Northern Ireland—

• “money purchase benefits” has the meaning given by section 176 of the
  Pension Schemes (Northern Ireland) Act 1993;

• “occupational pension scheme” has the meaning given by section 1 of the
  10Pension Schemes (Northern Ireland) Act 1993;

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

Part 5 Miscellaneous

15Remploy

77 Payments into Remploy Limited Pension and Assurance Scheme

The Secretary of State may make payments into the Remploy Limited Pension
and Assurance Scheme.

Judicial pensions

78 20Pension scheme for fee-paid judges

(1) In the Judicial Pensions and Retirement Act 1993, after Part 1 insert—

“PART 1A

FEE-PAID JUDGES

18A Pension scheme for fee-paid judges

(1) The appropriate Minister may by regulations establish a scheme for the
payment of pensions and other benefits to or in respect of fee-paid
25judges.

(2) The scheme may make provision for payments to or in respect of a
person in relation to the person’s service before the scheme is
established.

(3) No benefits are to be provided under a new public service pension
30scheme in relation to service in relation to which benefits are to be
provided under a scheme under this section.

“New public service pension scheme” means a scheme under—

(a) section 1 of the Public Service Pensions Act 2013, or

(b) section 1 of the Public Service Pensions Act (Northern Ireland)
352014 (c. 2)2014 (c. 2).

(4) The power under section 18(5) of the Public Service Pensions Act 2013
is to include power to provide for exceptions in the case of a person
who—

(a) served as a fee-paid judge before 1 April 2012, and

(b) 5has been notified by the appropriate Minister that he or she will
potentially be eligible for benefits under a scheme under this
section in relation to that service,

(and section 18(6) to (8) of the 2013 Act apply accordingly).

(5) The power under section 18(5) of the Public Service Pensions Act
10(Northern Ireland) 2014 is to include power to provide for exceptions in
the case of a person who—

(a) served as a fee-paid judge before 1 April 2012, and

(b) has been notified by the appropriate Minister that he or she will
potentially be eligible for benefits under a scheme under this
15section in relation to that service,

(and section 18(7) to (9) of the 2014 Act apply accordingly).

(6) Regulations under this section may, in particular, include provision
corresponding or similar to—

(a) any provision made by Part 1, section 20 or Schedule 2 or 2A;

(b) 20any provision that may be made by regulations under Part 1,
section 20 or Schedule 2 or 2A.

(7) In this section—

• “judge” means a person who holds an office specified in the
  regulations;

• 25“fee-paid judge” means a judge whose service is remunerated by
  the payment of fees (as opposed to the payment of a salary).”

(2) Schedule 5 contains related amendments.

79 Judicial pensions: pension sharing on divorce etc

In paragraph 1(5) of Schedule 2A to the Judicial Pensions and Retirement Act
301993 (pension credits), for the words from “in respect of the office” to the end
substitute “in respect of the rights from which the pension credit is derived”.

Marriage of same sex couples

80 Extension to Scotland of certain provisions about marriage of same sex
couples

35Sections 17(11), 24D(5), 37(7) and 38A of the Pension Schemes Act 1993
(regulations about relevant gender change cases) extend to Scotland.

Pension sharing

81 Pension sharing and normal benefit age

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

(2) 40In section 101B (interpretation), for the definition of “normal benefit age”
substitute—

Pension Schemes BillPage 46

• ““normal benefit age”, in relation to a pension credit benefit for a member
  of a scheme, is the earliest age at 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
  5or otherwise);

• “normal pension age”, in relation to a benefit for a member of a scheme,
  means the earliest age at 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
  10otherwise).”

(3) In section 101C (basic principle as to pension credit benefit), for subsection (1)
substitute—

“(1) The normal benefit age in relation to a pension credit benefit for a
member of a scheme—

(a) 15must not be lower than 60, and

(b) must not be higher than the permitted maximum.

(1A) The “permitted maximum” is 65 or, if higher, the highest normal
pension age for any benefit that is payable under the scheme to or in
respect of any of the members by virtue of rights which are not
20attributable (directly or indirectly) to a pension credit.”

Part 6 General

82 Power to make consequential amendments

(1) The appropriate national authority may by regulations make provision that is
25consequential on any provision made by this Act.

(2) Regulations under this section may amend, repeal, revoke or otherwise modify
any primary or subordinate legislation (whenever passed or made).

(3) In this section—

• “appropriate national authority” means—

  (a)

  30in relation to provision which could be made by an Act of the
  Northern Ireland Assembly without the consent of the
  Secretary of State (see sections 6 to 8 of the Northern Ireland Act
  1998), the Department for Social Development in Northern
  Ireland, and

  (b)

  35in relation to any other provision, the Secretary of State or the
  Treasury;

• “primary legislation” means—

  (a)

  an Act;

  (b)

  Northern Ireland legislation;

• 40“subordinate legislation” means—

  (a)

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

  (b)

  an instrument made under Northern Ireland legislation.

83 Regulations

(1) Regulations made by the Secretary of State or the Treasury under this Act are
to be made by statutory instrument.

(2) A statutory instrument containing regulations under section 82 that amend,
5repeal or otherwise modify a provision of primary legislation (whether alone
or with other provision) 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 under this Act is subject
to annulment in pursuance of a resolution of either House of Parliament.

(4) 10Subsection (3) does not apply to a statutory instrument containing regulations
under section 88(4) or (6) only.

84 Regulations: Northern Ireland

(1) A power of the Department for Social Development in Northern Ireland to
make regulations under this Act is exercisable by statutory rule for the
15purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573S.I. 1979/1573
(N.I. 12)).

(2) Where regulations made by the Department for Social Development in
Northern Ireland under section 82 amend, repeal, revoke or otherwise modify
a provision of primary legislation (whether alone or with other provision), the
20regulations—

(a) must be laid before the Northern Ireland Assembly after being made;

(b) take effect on such date as may be specified in the regulations but
(without prejudice to the validity of anything done under them or to
the making of new regulations) cease to have effect on the expiry of a
25period of 6 months from that date unless at some time before the expiry
of that period the regulations are approved by a resolution of the
Northern Ireland Assembly.

(3) Any other regulations made by the Department for Social Development in
Northern Ireland under this Act are subject to negative resolution within the
30meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954 (c. 33
(N.I.)).

(4) Subsection (3) does not apply to regulations containing provision under
section 88(6) only.

85 Regulations: supplementary

(1) 35A power to make regulations under this Act may be used—

(a) to make different provision for different purposes;

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

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

86 40Crown application

(1) In this section “the relevant provisions” means—

(a) Part 2,

(b) section 36,

(c) section 37,

(d) in Chapter 2 of Part 4, sections 48, 49, 51 and 52, and

(e) in Chapter 3 of Part 4, sections 55 to 57 and 61 to 63.

(2) 5The relevant provisions apply to a pension scheme managed by or on behalf of
the Crown as they apply to other pension schemes.

(3) Accordingly, references in those provisions to a person in the person’s capacity
as a trustee or manager of a pension scheme include the Crown, or a person
acting on behalf of the Crown, in that capacity.

(4) 10References in the relevant provisions to a person in the person’s capacity as an
employer include the Crown, or a person acting on behalf of the Crown, in that
capacity.

(5) Nothing in the relevant provisions applies to Her Majesty in Her private
capacity (within the meaning of the Crown Proceedings Act 1947).

87 15Extent

(1) This Act extends to England and Wales and Scotland only, subject to the
following 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) 20Section 80 extends to Scotland only.

(4) The following extend also to Northern Ireland—

(a) section 54(3);

(b) Chapter 5 of Part 4;

(c) this Part.

(5) 25The following extend to Northern Ireland only—

(a) in Chapter 2 of Part 4, sections 51 and 52;

(b) in Chapter 3 of Part 4, sections 61 to 63;

(c) section 71(8) and (9).

88 Commencement

(1) 30The following come into force on the day on which this Act is passed—

(a) section 47 and Schedule 3;

(b) any other provision of Part 4 so far as is necessary for enabling the
exercise on or after the day on which this Act is passed of any power to
make provision by regulations;

(c) 35sections 78 and 79 and Schedule 5;

(d) this Part.

(2) Section 81 comes into force on 1 April 2015.

(3) The following come into force on 6 April 2015—

(a) paragraphs 24, 30, 33 and 36 of Schedule 2 (and section 46 so far as
40relating to those provisions);

(b) Part 4, so far as not already in force.

(4) The following come into force on such day or days as may be appointed by
regulations made by the Secretary of State—

(a) Parts 1 to 3 other than paragraphs 24, 30, 33 and 36 of Schedule 2 (and
section 46 so far as relating to those provisions);

(b) 5sections 77 and 80.

(5) Regulations under subsection (4) may appoint different days for different
purposes.

(6) The Secretary of State or the Department for Social Development in Northern
Ireland may by regulations make transitional, transitory or saving provision in
10connection with the coming into force of any provision of this Act.

89 Short title

This Act may be cited as the Pension Schemes Act 2015.