Welfare Reform and Pensions Bill

Welfare Reform and Pensions Bill - continued	House of Commons
PART II, PENSIONS: GENERAL - continued

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Sections 11 and 12: application to Scotland.

13. - (1) This section shall have effect for the purposes of the application of sections 11 and 12 to Scotland.

(2) A reference to-

(a) the making of a bankruptcy order against a person is a reference to the award of sequestration on his estate or the making of the appointment on his estate of a judicial factor under section 41 of the Solicitors (Scotland) Act 1980;

(b) the estate of a person is a reference to his estate for the purposes of the Bankruptcy (Scotland) Act 1985 or of the Solicitors (Scotland) Act 1980, as the case may be;

(d) a person's trustee in bankruptcy is a reference to his permanent trustee or judicial factor, as the case may be;

(e) the commencement of a person's bankruptcy is a reference to the date of sequestration (within the meaning of section 12(4) of the Bankruptcy (Scotland) Act 1985) or of the judicial factor's appointment taking effect, as the case may be.

(3) For paragraph (b) of each of subsections (5) and (7) of section 11 there shall be substituted-

"(b) if later, the date of sequestration (within the meaning of section 12(4) of the Bankruptcy (Scotland) Act 1985) or of the judicial factor's appointment taking effect, as the case may be."

Forfeiture of rights under pension arrangements.

14. - (1) In the Pension Schemes Act 1993, after section 159 there shall be inserted-

"No forfeiture on bankruptcy of rights under personal pension schemes.	159A. - (1) A person's rights under a personal pension scheme cannot be forfeited by reference to his bankruptcy.
	(2) For the purposes of this section forfeiture shall be taken to include any manner of deprivation or suspension."

(2) In section 159(6) of that Act (application of section 159 to Scotland), after "this section" there shall be inserted "and section 159A".

(3) In section 92(2) of the Pensions Act 1995 (exceptions to the rule preventing forfeiture of rights under occupational pension schemes), paragraph (b) (which allows forfeiture of such rights by reference to a scheme member's bankruptcy) shall cease to have effect.

Compensating occupational pension schemes.

15. - (1) In subsection (1)(d) of section 81 of the Pensions Act 1995 (compensation not payable by the Pensions Compensation Board unless assets of salary-related trust scheme worth less than 90 per cent. of its liabilities), for "90 per cent. of the amount of the liabilities of the scheme" there shall be substituted "the protection level".

(2) After subsection (2) of that section there shall be inserted-

	"(2A) In subsection (1)(d) "the protection level" means the aggregate of-
	(a) the amount of the liabilities of the scheme to, or in respect of, its pensioner members and such other of its members as fall within a prescribed class or description,
	(b) 90 per cent. of the amount of the liabilities of the scheme to, or in respect of, any other members of the scheme, and
	(c) the amount of the liabilities of the scheme which are not liabilities to, or in respect of, its members;
	and references in this subsection to liabilities to, or in respect of, members of the scheme are references to liabilities in respect of pensions or other benefits."

(3) Section 83 of that Act (amount of compensation) shall be amended as follows.

(4) In subsection (3)(a) (compensation not to exceed 90 per cent. of shortfall), the words "90 per cent. of" shall be omitted.

(5) In subsection (3)(b) (compensation not to cause value of salary-related trust scheme's assets to exceed 90 per cent. of amount of its liabilities), for the words from "90 per cent." onwards there shall be substituted "the aggregate of the protected liabilities."

(6) After subsection (3) there shall be added-

	"(4) In subsection (3) "the protected liabilities" means-
	(a) the amount on the settlement date of the liabilities of the scheme to, or in respect of, its pensioner members and such other of its members as fall within a prescribed class or description,
	(b) 90 per cent. of the amount on that date of the liabilities of the scheme to, or in respect of, any other members of the scheme, and
	(c) the amount on that date of the liabilities of the scheme which are not liabilities to, or in respect of, its members;
	and references in this subsection to liabilities to, or in respect of, members of the scheme are to liabilities in respect of pensions or other benefits."

Miscellaneous amendments.

16. Schedule 2 (which contains amendments of the law relating to pensions) shall have effect.

Prepared 28 April 1999