Public Service Pensions and Judicial Offices Bill [HL] (HL Bill 44)

Public Service Pensions and Judicial Offices Bill [HL]Page 10

Pension benefits and contributions: corrections

12 Pension benefits and lump sum benefits: pensioner and deceased members

(1)This section applies in relation to a relevant member (“M”) of a Chapter 1
legacy scheme who has remediable service in an employment or office that is
5pensionable service under the scheme (whether or not by virtue of section 2(1)).

(2)In this section “relevant member”, in relation to a Chapter 1 legacy scheme,
means a member of the scheme who, immediately before the coming into force
of section 2(1) in relation to the scheme—

(a)is a pensioner member of the scheme, or of a Chapter 1 new scheme, in
10relation to the employment or office, or

(b)is deceased.

(3)Where, at the operative time—

(a)the aggregate of the pension benefits that (after taking into account the
effect, if any, of section 3(2)) have been paid under the scheme to any
15person (“the beneficiary”) in respect of M’s remediable service in the
employment or office, exceeds

(b)the aggregate of the pension benefits to which (after taking into account
the effect, if any, of sections 2(1) and 6(4) and (5) in relation to the
service) the beneficiary is entitled under the scheme in respect of the
20service,

the beneficiary must pay an amount equal to the difference to the scheme.

(4)Where, at the operative time—

(a)the amount mentioned in subsection (3)(a), is less than

(b)the amount mentioned in subsection (3)(b),

25the scheme manager must pay an amount equal to the difference to the
beneficiary.

(5)Where, at the operative time—

(a)the aggregate of the lump sum benefits that (after taking into account
the effect, if any of section 3(2)) have been paid under the scheme to any
30person (“the beneficiary”) in respect of M’s remediable service in the
employment or office, exceeds

(b)the aggregate of the lump sum benefits to which (after taking into
account the effect, if any, of sections 2(1) and 6(4) and (5) in relation to
the service) the beneficiary is entitled under the scheme in respect of the
35service,

the beneficiary must pay an amount equal to the difference to the scheme.

(6)Where, at the operative time—

(a)the amount mentioned in subsection (5)(a), is less than

(b)the amount mentioned in subsection (5)(b),

40the scheme manager must pay an amount equal to the difference to the
beneficiary.

(7)In this section “the operative time” means—

(a)if an election by virtue of section 6 (immediate choice to receive new
scheme benefits) is made in relation to M’s remediable service—

(i)45the time the election is made, or

Public Service Pensions and Judicial Offices Bill [HL]Page 11

(ii)if later, the coming into force of section 2(1) in relation to the
Chapter 1 legacy scheme;

(b)otherwise, the end of the section 6 election period in relation to M.

(8)In this section—

  • 5“lump sum benefit” means any benefit payable under a pension scheme
    by way of a lump sum;

  • “pension benefit” means any benefit payable under a pension scheme
    otherwise than by way of a lump sum.

13 Pension contributions: pensioner and deceased members

(1)10This section applies in relation to a relevant member (“M”) of a Chapter 1
legacy scheme who has remediable service in an employment or office that is
pensionable service under the scheme (whether or not by virtue of section 2(1)).

(2)In this section “relevant member”, in relation to a Chapter 1 legacy scheme,
means a member of the scheme who, immediately before the coming into force
15of section 2(1) in relation to the scheme—

(a)is a pensioner member of the scheme, or of a Chapter 1 new scheme, in
relation to the employment or office, or

(b)is deceased.

(3)Where, at the operative time—

(a)20the paid contributions amount in relation to M, exceeds

(b)the adjusted contributions amount in relation to M,

the scheme manager must pay an amount of compensation equal to the
difference to the appropriate person.

(4)Where, at the operative time—

(a)25the paid contributions amount in relation to M, is less than

(b)the adjusted contributions amount in relation to M,

the appropriate person must pay pension contributions equal to the difference
to the scheme.

(5)In this section “the operative time” means—

(a)30if an election by virtue of section 6 (immediate choice to receive new
scheme benefits) is made in relation to M’s remediable service—

(i)the time the election is made, or

(ii)if later, the coming into force of section 2(1) in relation to the
Chapter 1 legacy scheme;

(b)35otherwise, the end of the section 6 election period in relation to M.

(6)In this section “the paid contributions amount” means the aggregate of the
pension contributions paid by M in the relevant tax years in respect of M’s
remediable service in the employment or office under—

(a)any Chapter 1 scheme, and

(b)40where M has made an election by virtue of section 5 (election for
retrospective provision to apply: opted-out service), any partnership
pension account.

(7)In this section “the adjusted contributions amount” means—

(a)if an election by virtue of section 6 (immediate choice to receive new
45scheme benefits) has been made in relation to the remediable service,

Public Service Pensions and Judicial Offices Bill [HL]Page 12

the aggregate of M’s new scheme contributions for the relevant tax
years;

(b)otherwise, the aggregate of M’s legacy scheme contributions for the
relevant tax years.

(8)5In this section “the relevant tax years” means—

(a)in relation to pensionable service under a Chapter 1 legacy scheme that
is not an Agency scheme, the tax years from 2015-16 to 2021-22
inclusive;

(b)in relation to pensionable service under a Chapter 1 legacy scheme that
10is an Agency scheme, the tax years from 2016-17 to 2021-22 inclusive.

(9)In this section “the appropriate person” means—

(a)M, or

(b)if M is deceased, M’s personal representatives.

14 Pension contributions: active and deferred members (immediate correction)

(1)15This section applies in relation to a relevant member (“M”) of a Chapter 1
legacy scheme who has remediable service in an employment or office that is
pensionable service under the scheme (whether or not by virtue of section 2(1)).

(2)In this section “relevant member”, in relation to a Chapter 1 legacy scheme,
means a member of the scheme who, immediately before the coming into force
20of section 2(1) in relation to the scheme—

(a)is an active or deferred member of the scheme, or of a Chapter 1 new
scheme, in relation to the employment or office, and

(b)is not a pensioner member of a Chapter 1 scheme in relation to the
employment or office.

(3)25Where, on the coming into force of section 2(1) in relation to the scheme—

(a)the paid contributions amount in relation to M, exceeds

(b)the adjusted contributions amount in relation to M,

the scheme manager must pay an amount of compensation equal to the
difference to M.

(4)30Where, on the coming into force of section 2(1) in relation to the scheme—

(a)the paid contributions amount in relation to M, is less than

(b)the adjusted contributions amount in relation to M,

M must pay pension contributions equal to the difference to the scheme.

(5)In this section “the paid contributions amount” means the aggregate of the
35pension contributions paid by M in the relevant tax years in respect of M’s
remediable service in the employment or office under—

(a)any Chapter 1 scheme, and

(b)where M has made an election by virtue of section 5 (opting in: persons
with opted-out service), any partnership pension account.

(6)40In this section “the adjusted contributions amount” means the aggregate of M’s
legacy scheme contributions for the relevant tax years.

(7)In this section “the relevant tax years” means—

(a)in relation to pensionable service under a Chapter 1 legacy scheme that
is not an Agency scheme, the tax years from 2015-16 to 2021-22
45inclusive;

Public Service Pensions and Judicial Offices Bill [HL]Page 13

(b)in relation to pensionable service under a Chapter 1 legacy scheme that
is an Agency scheme, the tax years from 2016-17 to 2021-22 inclusive.

15 Pension contributions: active and deferred members (deferred correction)

(1)This section applies in relation to a relevant member (“M”) of a Chapter 1
5legacy scheme—

(a)who has remediable service in an employment or office that is
pensionable service under the scheme (whether or not by virtue of
section 2(1)), and

(b)in respect of whom an election by virtue of section 9 (deferred choice to
10receive new scheme benefits) has been made.

(2)In this section “relevant member”, in relation to a Chapter 1 legacy scheme,
means a member of the scheme who, immediately before the coming into force
of section 2(1) in relation to the scheme—

(a)is an active or deferred member of the scheme, or of a Chapter 1 new
15scheme, in relation to the employment or office, and

(b)is not a pensioner member of a Chapter 1 scheme in relation to the
employment or office.

(3)Where—

(a)the paid contributions amount in relation to M, exceeds

(b)20the adjusted contributions amount in relation to M,

the scheme manager must pay an amount of compensation equal to the
difference to M.

(4)Where—

(a)the paid contributions amount in relation to M, is less than

(b)25the adjusted contributions amount in relation to M,

M must pay pension contributions equal to the difference to the scheme.

(5)In this section “the paid contributions amount” means (subject to subsection
(6)) the aggregate of the pension contributions paid by M in the relevant tax
years in respect of M’s remediable service in the employment or office under—

(a)30any Chapter 1 scheme, and

(b)where M has made an election by virtue of section 5 (opting in: persons
with opted-out service), any partnership pension account.

(6)The “paid contributions amount” determined under subsection (5) is to be
adjusted by—

(a)35deducting any amounts of compensation paid to M in respect of the
remediable service in question under section 14(3), and

(b)adding any pension contributions paid by M in respect the remediable
service in question under section 14(4).

(7)In this section “the adjusted contributions amount” means the aggregate of M’s
40new scheme contributions for the relevant tax years.

(8)In this section “the relevant tax years” means—

(a)in relation to pensionable service under a Chapter 1 legacy scheme that
is not an Agency scheme, the tax years from 2015-16 to 2021-22
inclusive;

(b)45in relation to pensionable service under a Chapter 1 legacy scheme that
is an Agency scheme, the tax years from 2016-17 to 2021-22 inclusive.

Public Service Pensions and Judicial Offices Bill [HL]Page 14

16 Powers to reduce or waive liabilities

(1)Scheme regulations for a Chapter 1 legacy scheme may make provision under
which a liability owed by a person to the scheme under section 12 (corrections
for pension benefits and lump sum benefits) is reduced or waived.

(2)5Scheme regulations for a Chapter 1 legacy scheme may make provision under
which a liability to pay pension contributions owed by a member to the scheme
under section 13, 14 or 15 (corrections for pension contributions) in relation to
the member’s remediable service in an employment or office is reduced or
waived.

(3)10The provision that may be made under subsection (2) includes, in particular,
provision under which a liability to pay pension contributions is reduced by
tax relief amounts.

(4)In subsection (3) “tax relief amounts” means amounts determined by reference
to the tax relief under section 188 of FA 2004 (relief for members’ contributions)
15that would have been available in respect of the amounts owed if they were
paid in a different tax year.

(5)Scheme regulations for a Chapter 1 legacy scheme may make provision under
which a liability to pay compensation owed by the scheme to a member under
section 13, 14 or 15 (corrections for pension contributions) in relation to the
20member’s remediable service in an employment or office is reduced or waived.

(6)The provision that may be made under subsection (5) includes, in particular,
provision under which a liability is reduced by tax relief amounts.

(7)In subsection (6) “tax relief amounts” means amounts determined by reference
to the tax relief under section 188 of FA 2004 (relief for members’ contributions)
25that was received by the member in respect of pension contributions paid in a
tax year in respect of the member’s remediable service in the employment or
office.

(8)Scheme regulations for a Chapter 1 legacy scheme may make provision under
which a liability owed by the scheme to a person under section 14 (pension
30contributions: active and deferred members (immediate correction)) may, by
agreement, be reduced or waived.

Powers to make provision in relation to special cases

17 Pension credit members

(1)Scheme regulations for a Chapter 1 scheme may make provision about the
35benefits payable to or in respect of a relevant pension credit member and the
corresponding pension debit member.

(2)In this section “relevant pension credit member”, in relation to a Chapter 1
scheme, means a member of the scheme who has rights under the scheme—

(a)which are attributable (directly or indirectly) to a pension credit, and

(b)40the value of which was determined (to any extent) by reference to the
value of benefits payable in respect of the remediable service in an
employment or office of another member.

Public Service Pensions and Judicial Offices Bill [HL]Page 15

(3)In this section “the corresponding pension debit member”, in relation to a
relevant pension credit member, means the member mentioned in subsection
(2)(b).

(4)The provision that may be made under subsection (1) includes provision under
5which—

(a)the pension debit of the corresponding pension debit member is
adjusted where an election under section 6 (immediate choice) or
section 9 (deferred choice) is made in relation to the member’s
remediable service;

(b)10the pension credit of a relevant pension credit member is adjusted on
the assumption that an election under section 6 or 9 is made in relation
to the remediable service of the corresponding pension debit member
(regardless of whether it in fact is).

(5)Provision made under subsection (1) must include provision under which, in a
15case in which the corresponding pension debit member in relation to a relevant
pension credit member has mixed service, any pension credit retained by the
relevant pension credit member under the scheme is of a value determined by
reference to the value of benefits payable under only one Chapter 1 scheme.

(6)For the purposes of this Chapter a member’s remediable service in an
20employment or office is “mixed service” if, disregarding section 2(1)

(a)some of the service is pensionable service under a Chapter 1 legacy
scheme, and

(b)some of the service is pensionable service under a Chapter 1 new
scheme.

(7)25In this section—

  • “pension debit” means a debit under section 29(1)(a) of WPRA 1999 or
    Article 26(1)(a) of WRP(NI)O 1999;

  • “pension credit” means a credit under section 29(1)(b) of WPRA 1999 or
    Article 26(1)(b) of WRP(NI)O 1999.

18 30Voluntary contributions

(1)Scheme regulations for a Chapter 1 scheme may make provision about cases in
which a member has paid voluntary contributions to the scheme during any
period of remediable service.

(2)In this section “voluntary contributions” means amounts that are paid to a
35pension scheme by a member of the scheme on a voluntary basis, in accordance
with the scheme, for the purpose of securing additional benefits, or securing
the earlier payment of benefits, under the scheme.

(3)The provision that may be made under subsection (1) includes, in particular,
provision under which the rights to additional benefits, or earlier payment of
40benefits, that would otherwise have been secured by the payment of the
voluntary contributions are varied, in a case in which an election by virtue of
section 6 or 9 is made in respect of any remediable service of the member in
question.

(4)The rights may, in particular, be varied so that they are of an equivalent value
45to rights the member would have secured under the Chapter 1 new scheme
that is connected with the scheme if the voluntary contributions had been paid
to that scheme.

Public Service Pensions and Judicial Offices Bill [HL]Page 16

(5)The provision that may be made under subsection (1) in scheme regulations for
a Chapter 1 new scheme includes, in particular, provision under which the
rights to additional benefits, or earlier payment of benefits, that would
otherwise have been secured by the payment of the voluntary contributions
5are extinguished.

(6)Where scheme regulations made by virtue of subsection (1) make provision as
mentioned in subsection (5), scheme regulations by virtue of subsection (1)
must be made that include provision under which—

(a)the member in question receives rights under a Chapter 1 scheme that
10are of an equivalent value to the extinguished rights,

(b)the member in question is given rights under a Chapter 1 scheme that
the member would have secured under that scheme if the voluntary
contributions had been paid to that scheme, or

(c)the scheme is required to pay the member in question an amount by
15way of compensation equal to—

(i)the aggregate of the voluntary contributions paid, less

(ii)an amount in respect of the value of the tax relief under section
188 of FA 2004 (member contributions) to which the member
was entitled in respect of the voluntary contributions.

19 20Transfers

(1)Scheme regulations for a Chapter 1 scheme may make provision about cases in
which—

(a)a member transfers out of the scheme rights in respect of remediable
service in an employment or office that is pensionable service under the
25scheme;

(b)a member transfers in to the scheme rights in respect of remediable
service in an employment or office that is pensionable service under
another Chapter 1 scheme;

(c)a member transfers in to the scheme rights in respect of remediable
30service in a judicial office (within the meaning of Chapter 2) that is
pensionable service under a judicial scheme (within the meaning of that
Chapter);

(d)a member transfers in to the scheme rights in respect of remediable
service in an employment or office (within the meaning of Chapter 3)
35that is pensionable service under a local government scheme (within
the meaning of that Chapter);

(e)a person, within the period beginning with the closing date and ending
with 31 March 2022, transfers in to the scheme, or to any other Chapter
1 scheme, rights in respect of service in any employment or office.

(2)40The provision that may be made under subsection (1)(b) to (e) includes, in
particular, provision under which the rights to benefits that would otherwise
have been secured by the transfer are varied, in a case in which an election by
virtue of section 6 or 9 is made in respect of any remediable service of the
member in question.

(3)45The rights may, in particular, be varied so that they are of an equivalent value
to rights the member would have secured under another Chapter 1 scheme if
the rights had been transferred in to that scheme.

Public Service Pensions and Judicial Offices Bill [HL]Page 17

(4)The provision that may be made under subsection (1)(b) to (e) includes, in
particular, provision under which the rights to benefits that would otherwise
have been secured by the transfer are extinguished.

(5)Where scheme regulations made by virtue of subsection (1) make provision as
5mentioned in subsection (4), scheme regulations by virtue of subsection (1)
must be made that include provision under which—

(a)the person in question receives rights under a Chapter 1 scheme that
are of an equivalent value to the extinguished rights, or

(b)the person in question is given rights under a Chapter 1 scheme that the
10member would have secured under that scheme if the transfer had been
made in to that scheme.

20 Further powers to make provision about special cases

(1)Scheme regulations for a Chapter 1 scheme may make further provision
relating to a member who has remediable service in an employment or office.

(2)15The provision that may be made under subsection (1) includes, in particular—

(a)provision about the benefits payable to or in respect of a member who
has remediable service in an employment or office that is mixed service;

(b)provision about the benefits payable to or in respect of a member
where, disregarding section 2(1), the member—

(i)20has remediable service in an employment or office that is
pensionable service under a Chapter 1 new scheme, and

(ii)has a right under that scheme, if they retire before normal
pension age, on the making of a payment to the scheme, to the
reduction or elimination of the actuarial reduction that would
25otherwise have been made to the benefits payable to or in
respect of the member in respect of that remediable service;

(c)provision about the benefits payable to or in respect of a person who
has partially retired;

(d)provision about the benefits payable to or in respect of a person in
30relation to whom an amount of tax has been paid by the scheme
manager of a Chapter 1 scheme in satisfaction of a liability by virtue of
sections 237A to 237E of FA 2004 (scheme pays).

(3)The provision that may be made by scheme regulations under this section, or
under section 17, 18 or 19, includes, in particular—

(a)35provision corresponding to any provision of this Chapter, or

(b)provision applying any provision of this Chapter in its application to
persons of a description specified in the regulations,

with or without modifications.

Compensation

21 40Power to pay compensation

(1)The scheme manager for a Chapter 1 legacy scheme may pay amounts by way
of compensation in respect of compensatable losses incurred by members.

(2)Scheme regulations for a Chapter 1 legacy scheme may make provision under
which an employer in relation to the scheme is required to reimburse the
45scheme manager for amounts paid under subsection (1).

Public Service Pensions and Judicial Offices Bill [HL]Page 18

(3)For the purposes of this section a loss incurred by a member is
“compensatable” if and to the extent that—

(a)any of the following three conditions is met, and

(b)the loss is of a description specified in Treasury directions.

(4)5The first condition is that the loss is attributable to, or is reasonably regarded
as attributable to, a relevant breach of a non-discrimination rule.

(5)The second condition is that the loss is attributable to the application of any
provision of, or made under, this Chapter.

(6)The third condition is that—

(a)10the member is a relevant member, and

(b)the loss is a Part 4 tax loss that is attributable to the value of rights in
respect of remediable service which would, apart from section 2(1), be
pensionable service under a Chapter 1 new scheme.

(7)In subsection (6) “relevant member” means a member of the scheme—

(a)15who, immediately before the coming into force of section 2(1) in
relation to the scheme—

(i)is a pensioner member of the scheme, or of a Chapter 1 new
scheme, in relation to the employment or office, or

(ii)is deceased, and

(b)20in respect of whom an election by virtue of section 6 (election for new
scheme benefits) has been made.

(8)In this section (subject to subsection (10)) “loss” includes a loss of any kind
including, in particular, a Part 4 tax loss.

(9)In this section “Part 4 tax loss”, in relation to a member, means a loss arising as
25a result of the member—

(a)incurring a charge, or incurring an increased charge, under Part 4 of FA
2004, or

(b)not being entitled to a relief, or being entitled to less relief, under that
Part of that Act.

(10)30In this section “loss” does not include an amount that is payable under this
Chapter or under regulations made by virtue of this Chapter.

(11)In this section “non-discrimination rule” means a rule that is, or at any time
was, included in a Chapter 1 scheme by virtue of—

(a)section 61 of EA 2010, or

(b)35paragraph 2 of Schedule 1 to EEAR(NI) 2006.

(12)For the purposes of this section a breach of a non-discrimination rule is
“relevant” if it arises from the application of—

(a)an exception to section 18(1) of PSPA 2013 made under section 18(5) to
(7) of that Act, or

(b)40an exception to section 18(1) of PSPA(NI) 2014 made under section
18(5) to (8) of that Act.

(13)Subsection (1) does not confer power to pay amounts by way of compensation
in respect of compensatable losses so far as—

(a)the member has already received amounts by way of compensation in
45respect of them, or

Public Service Pensions and Judicial Offices Bill [HL]Page 19

(b)amounts that the member has paid the scheme have been reduced by
amounts in respect of them,

whether pursuant to an order of a court or tribunal or otherwise.

22 Indirect compensation

(1)5Scheme regulations for a Chapter 1 legacy scheme may make provision under
which, where a member has incurred a compensatable loss that is a Part 4 tax
loss—

(a)the member is not paid an amount under section 21 by way of
compensation in respect of the loss, and

(b)10the member is instead paid such additional benefits under the scheme
as may be determined in accordance with the regulations.

(2)In this section “compensatable loss” and “Part 4 tax loss” have the same
meaning as in section 21.

Further provision about corrections and compensation

23 15Interest and process

(1)Scheme regulations for a Chapter 1 scheme may make provision—

(a)under which interest is required to be calculated and paid on relevant
amounts;

(b)about the process by which relevant amounts (and any interest on
20them) are to be paid.

(2)Scheme regulations made by virtue of subsection (1)(b) may, in particular,
include provision—

(a)about when relevant amounts (and any interest on them) are to be paid
(including provision under which they are paid in instalments);

(b)25under which relevant amounts (and any interest on them) owed by the
scheme to a person may be paid only on the making of an application;

(c)for the netting off of relevant amounts (and any interest on them) owed
to a person by the scheme against relevant amounts (and any interest
on them) owed by the person to the scheme;

(d)30conferring rights of appeal against decisions taken under the
regulations.

(3)In this section “relevant amounts” means any amounts that are payable by a
member to the scheme, or by the scheme to a member, under or by virtue of
this Chapter.

24 35Treasury directions

(1)The powers mentioned in subsection (2) must be exercised in accordance with
Treasury directions.

(2)The powers are—

(a)the powers to make scheme regulations by virtue of section 16 (powers
40to reduce or waive liabilities) and any powers exercisable by virtue of
such regulations;