SCHEDULE 4 continued PART 1 continued
Pension Schemes BillPage 90
(3) After subsection (3) insert—
“(3A)
An eligible member who has pension credit rights in relation to more
than one category of benefits under the scheme may exercise the
power to give a transfer notice in relation to the pension credit rights
5in relation to any one or more of those categories.”
(4) For subsection (4) substitute—
“(4) The cash equivalent for the purposes of subsection (1) shall—
(a)
in a case where the pension credit rights relate to a category
of benefits other than money purchase benefits, be taken to be
10the amount shown in the relevant statement under section
101H, and
(b)
in a case where the pension credit rights relate to money
purchase benefits, be determined by reference to the date the
notice under that subsection is given.”
(5) 15For subsection (6A) substitute—
“(6A) Regulations may—
(a)
provide for this Chapter not to apply in relation to a person
of a prescribed description;
(b)
provide for this Chapter not to apply in prescribed
20circumstances in relation to a member of a prescribed scheme
or schemes of a prescribed description;
(c)
modify the application of this Chapter in relation to a
member who has accrued rights to benefits of a prescribed
description.
(6B)
25In this Chapter a reference to a “category” of benefits is to one of the
following three categories—
(a) money purchase benefits;
(b) flexible benefits other than money purchase benefits;
(c) benefits that are not flexible benefits.”
16 30For section 101G (restrictions on power to give transfer notice) substitute—
(1)
An eligible member may not give a transfer notice in relation to a
category of benefits if a crystallisation event has occurred in relation
to any of the member’s pension credit rights to benefits in that
35category.
(2)
An eligible member may give a transfer notice in relation to a
category of benefits other than money purchase benefits only if—
(a)
the member has been provided with a statement under
section 101H in relation to benefits in that category, and
(b)
40not more than 3 months have passed since the date by
reference to which the amount shown in the statement is
determined.
(3)
An eligible member may not give a transfer notice in relation to
benefits other than flexible benefits if there is less than one year to go
45until the member reaches normal benefit age.
Pension Schemes BillPage 91
(4) Where an eligible member of a qualifying scheme—
(a)
is entitled to give a transfer notice in relation to any category
of benefits, and
(b)
is also entitled to make an application to the trustees or
5managers of the scheme under section 95(1) in relation to
benefits in the same category (or would be entitled to do so
but for section 95(1A)(a)),
the member may not, if the scheme so provides, give a transfer notice
in relation to that category of benefits without also making an
10application under section 95(1) in relation to that category of
benefits.
(5)
A transfer notice may not be given if a previous transfer notice given
by the member to the trustees or managers of the scheme is
outstanding.
(6)
15Regulations may extend the period specified in subsection (2)(b) in
prescribed circumstances.
(7)
For the purposes of subsection (1) a crystallisation event occurs in
relation to a member’s pension credit rights to benefits in a category
when—
(a)
20payment 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
designated as available for the payment of drawdown
25pension (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
for purchasing an annuity or insurance policy.”
17
(1)
30Section 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
application of an eligible member, provide the member with a
35written 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
categories of benefits other than money purchase benefits, the
40application 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)
Section 101J (time for compliance with transfer notice) is amended as
45follows.
Pension Schemes BillPage 92
(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
the valuation date, and
(b)
5in the case of an application that relates to money purchase
benefits, within 6 months of the date on which the notice is
given.”
(3) After subsection (2) insert—
“(2A)
Regulations may extend the period for complying with the notice in
10prescribed circumstances.”
(4) For subsection (7) substitute—
“(7)
In 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
15In section 101M (effect of transfer on trustees’ duties), for the words from
“pension credit benefit” to the end of the section substitute “benefits to
which the transfer notice relates”.
20 After section 101N insert—
20Except as mentioned in sections 96(4) and 101G(4), a pension scheme
may not contain rules that would have the effect of—
(a)
preventing 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
25a transfer payment to be made in respect of another category
of benefits, or
(b)
preventing 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) 30Section 101P (interpretation) is amended as follows.
(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
35Pension 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
40money 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”.
Pension Schemes BillPage 93
24
In 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
5Chapter 1 of Part 4ZA”.
26 In 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) 10for “Chapter 4 of Part 4” substitute “Chapter 1 of Part 4ZA”;
(ii) for “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 The 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
201993 (certain protection for early leavers) or
regulations 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
25In section 73 (preferential liabilities on winding up), in subsection (9), for
“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”.
32
In section 124 (interpretation of Part 1), in subsection (1), in paragraph (b) of
30the 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
3593(1A)” substitute “section 100D”.
34 The Pensions Act 2004 is amended as follows.
35 (1) Section 18 (pension liberation: interpretation) is amended as follows.
(2) In subsection (2)(a)—
(a) 40after “accrued rights” insert “or an entitlement”;
(b)
in sub-paragraph (ii), for “the applicable rules” substitute “the
scheme rules”.
Pension Schemes BillPage 94
(3) In 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
5Act);”;
(b)
in 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
10In section 23 (freezing orders), in subsection (4)(g), for “salary related
schemes” 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
15(transfer rights: general), or
(b)
Chapter 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) 20for “Chapter 5 of Part 4” substitute “Chapter 2 of Part 4ZA”.
39
In 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
25“Chapter 5 of Part 4” substitute “Chapter 2 of Part 4ZA”.
41 (1) Section 318 (interpretation) is amended as follows.
(2)
In subsection (2), for “an occupational pension scheme” substitute “a
pension scheme”.
(3) In subsection (3)(a), for sub-paragraph (ii) substitute—
“(ii)
30Chapter 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)
Chapter 1 or 2 of Part 4ZA of that Act (transfers and
contribution refunds) or regulations made under
35either 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
4ZA”.
(3)
In paragraph 32(1)(b), for “Chapter 5 of Part 4” substitute “Chapter 2 of Part
404ZA”.
43
(1)
Schedule 1 to the Scottish Parliamentary Pensions Act 2009 (Scottish
Parliamentary Pension Scheme) is amended as follows.
Pension Schemes BillPage 95
(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 10In 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)
15the 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
20purchase benefits of a prescribed
description, or
(ii) benefits of a prescribed description.”
47
In Schedule 1A to the Judicial Pensions Act 1981 (transfer of accrued
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”.
48
In Schedule 2 to the Judicial Pensions and Retirement Act 1993 (transfer of
accrued 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)
Chapters 4 and 5 of Part 4 of the Act become Chapters 1 and 2 of a new
Part 4ZA.
(2) Accordingly—
Pension Schemes BillPage 96
(a) before section 89 (and before the Chapter heading above it) insert—
(b) for the Chapter heading above section 89 substitute—
(c) for the Chapter heading above section 97AA substitute—
51
In section 20F (transfers out of GMP-converted schemes), in subsection (3),
5omit “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”
substitute “Chapter 2 of Part 4ZA”.
53
In section 69 (form of short service benefit and its alternatives), in subsection
10(3), for “Chapter IV of this Part” substitute “Chapter 1 of Part 4ZA”.
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)
15Condition 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) 20Condition 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
25before 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
30satisfied;
(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) 35money purchase benefits;
Pension Schemes BillPage 97
(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
5when—
(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
10designated 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
15for 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)
20In this section a reference to accrued rights does not include pension
credit rights.
(10) Regulations may—
(a)
provide for this Chapter not to apply in relation to a person
of a prescribed description;
(b)
25provide for this Chapter not to apply in prescribed
circumstances in relation to a member of a prescribed scheme
or schemes of a prescribed description;
(c)
modify the application of this Chapter in relation to a
member who has accrued rights to benefits of a prescribed
30description.
(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)
a reference to a member’s “transferrable rights” are to any
35rights 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
application of any member, provide the member with a statement of
40entitlement 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
application may relate to transferrable rights in relation to either or
45both 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
Pension Schemes BillPage 98
equivalent at the guarantee date of the transferrable rights to which
the 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)
5within the prescribed period beginning with the date of the
application, and
(b)
within 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
10this section and may, in particular, restrict the making of successive
applications.
(6)
If 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
15failed to take all reasonable steps to secure compliance.
(1)
A 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)
20A member of a pension scheme who has transferrable rights in
relation to money purchase benefits acquires a right to take their cash
equivalent in accordance with this Chapter.”
55 (1) Section 91 (ways of taking right to cash equivalent) is amended as follows.
(2) For subsection (1) substitute—
“(1)
25A 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
scheme requiring them to use the cash equivalent in one of the ways
specified below.
(1A)
30In 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
date shown in the relevant statement of entitlement, and
(b)
if the cash equivalent relates to benefits that are not flexible
35benefits, 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”
substitute “transferrable rights”.
(4) After subsection (6) insert—
“(6A)
40Regulations may extend the period specified in subsection (1A)(a) in
prescribed circumstances.”
(5) Omit subsections (7) and (8).
56
(1)
Section 92 (further provisions concerning exercise of option under section
91) is amended as follows.
Pension Schemes BillPage 99
(2) For subsection (1) substitute—
“(1)
A 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
5ways, but a member who exercises that option must do so—
(a) in relation to the whole of that cash equivalent, or
(b)
if 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”
10substitute “transferrable rights”.
(4) For subsection (4) substitute—
“(4) Where 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)
15is also entitled to give a transfer notice under section 97F(1)
to the trustees or managers of the scheme in relation to
benefits 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
20under section 91(1) in relation to that category of benefits without
also giving a transfer notice under section 97F(1) in relation to that
category of benefits.”
57 (1) Section 93 (calculation of cash equivalents) is amended as follows.
(2) After subsection (1) insert—
“(1A)
25Where a member applies under section 91 to take a cash equivalent
that relates to money purchase benefits, the cash equivalent is to be
calculated by reference to the date of the application.”
(3) In subsection (2)—
(a)
in paragraph (a), in the opening words, for “except guaranteed cash
30equivalents (as defined in section 90(1A))” substitute “that relate to
money purchase benefits”;
(b)
in paragraph (aa), for “, including a guaranteed cash equivalent,”
substitute “that relates to any category of benefits”.
(4) In subsection (3), omit paragraph (a).
(5) 35For subsection (3A) substitute—
“(3A) For the purposes of subsection (3), the “appropriate date”—
(a)
in 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
40section 89A, and
(b)
in relation to a cash equivalent that relates to money purchase
benefits, means the date on which the trustees or managers
receive an application from the member under section 91.
(3B)
Where regulations under subsection (2)(b) provide for the cash
45equivalent shown in a statement of entitlement to be increased or
reduced after the member has made an application under section 91,