Select Committee on Social Security Fifth Report


TABLE - comparing Pensions on Divorce Clauses in Welfare Reform and Pensions Bill [Bill 44] with Draft Pension Sharing Bill




Welfare Reform and Pensions Bill [Bill 44]

Draft Pension Sharing Bill June 1998

Differences

Clause 15 (Orders in England and Wales)

Clause 1 (Orders in England and Wales)

None

Clause 16 (Orders in Scotland)

Clause 2 (Orders in Scotland)

Subsections (3) and (4) on terms defined in relation to Scotland

Clause 17 (Amendments)

Clause 29 (Consequential amendments) — part

The Schedule 4 introduced in the Bill relates only to the sections about pensions inserted in the Matrimonial Causes Act 1973 by section 166 of the Pensions Act 1995; the Schedule 4 in the Draft included amendments to other statutes see Schedule 9 below

Clause 18 (Extension to overseas divorce etc.)


New in Bill

Clause 19 (Scope of mechanism)


New in Bill

Clause 20 (Activation of pension sharing)

Clause 3 (Activation of pension sharing)

In subsection (1), new (d), (g) and (i) on overseas divorces and new (h) referring to Northern Ireland

In subsection (2) explicit reference to mediation in Draft replaced by 'such circumstances as the Lord Chancellor may prescribe by regulations'

In subsection (3) qualifying agreements in Scotland to be 'entered into in such circumstances as the Secretary of State may prescribe by regulations'

In subsection (4) new (b) relating to earmarking

In subsection (5) new (c) relating to earmarking

New subsection (6) relating to section 12A of the Family Law (Scotland) Act 1985

New subsections (7) and (8) in Bill replace subsection (6) in Draft on time limits for complying with pension sharing orders

New subsection (9) defining relevant matrimonial documents

New subsection 10allowing sheriff to extend time limits


Clause 21 (Creation of pension debits and credits)

Clause 4 (Creation of pension debits and credits)

Subsection 1 amended to reflect 'shareable' rights

Subsections (2) and (3) re-worded slightly

Subsection (4) in Draft omitted in Bill

Subsection (4) in Bill is a slightly re-worded version of subsection (5) in Draft

Subsections (5) and (6) new in Bill

Subsection (7) in Bill is a re-worded version of subsection (6) in Draft

Subsection (8) in Bill same as subsection (7) in Draft, except that definition of 'specified percentage' is omitted in Bill


Clause 22 (Cash equivalents)

Clause 5 (Cash equivalents)

Subsection (2) slightly re-worded in Bill

Clause 23 (Reduction of benefit)

Clause 6 (Reduction of benefit)

Subsections (1) , (2) and (3) re-worded in Bill to refer to shareable rights and qualifying benefits

Subsection (5) has a re-worded definition of 'appropriate percentage'


Clause 24 (Effect on contracted-out rights)

Clause 7 (Effect on contracted-out rights)

Definitions of 'appropriate percentage' inserted in Pension Schemes Act 1993 by subsections (2) and (3) re-worded in Bill

Clause 25 (Time for discharge of liability)

Clause 8 (Time for discharge of liability)

New subsection (3) in Bill to apply section 10 of Pensions Act 1995 to trustees or managers

Clause 26 ("Implementation period")

Clause 9 ("Implementation period")

Addition in Bill to subsection (2) and new subsections (3) and (4) providing for the Secretary of State to make regulations

Clause 27 (Mode of discharge of liability)

Clause 10 (Mode of discharge of liability)

None

Clause 28 (Safeguarded rights)

Clause 11 (Safeguarded rights)

Bill provides for a Clause 68B to be inserted in Pension Schemes Act 1993 where Draft had ten Clauses 68B to 68K — requirement for separate safeguarded rights certificate removed from Bill

Subsection (2) of Clause 68C in Bill confers powers on Inland Revenue which corresponding subsection of Clause 68L in Draft gave to Secretary of State

Subsection (4) of Clause 68C in Bill slightly re-worded from Clause 68L in Draft relating to right of appeal on a point of law


Clause 29 (Requirements relating to pension credit benefit)

Clause 12 (Requirements relating to pension credit benefit)

Both Bill and Draft insert Clauses 101A to 101P into Pension Schemes Act 1993

'self-employed pension arrangement' omitted in Bill from Clause 101D(2)(a)

'if the scheme so provides' inserted in Bill in Clause 101G(3)

Bill replaces 'within 6 months of valuation date' in Clause 101J(4) by 'before the end of the period for compliance'

Bill has new subsection (5) of Clause 101J to apply section 10 of Pensions Act 1995 to trustees or managers

Bill inserts addition Clause 101Q to allow regulations to apply provisions to schemes which are not money purchase schemes but which offer some money purchase benefits


Clause 30 (Treatment in winding up)

Clause 13 (Treatment in winding up)

New subsections(1), (3) and (4)(b) in Bill

Clause 31 (Public service pension schemes)

Clause 14 (Public service pension schemes: indexation)

None

Clause 32 (Other pension schemes)


New provision in Bill for regulations on limited price indexation

Clause 33 (Charges in respect of pension sharing costs)

Clause 15 (Initial charges)

Clause 16 (Charge for payments under occupational schemes)


Bill re-words provisions for making regulations about arrangements recovering costs from member and former spouse

Clause 34 (Extension of scheme-making powers)

Clause 17 (Extension of scheme-making powers)

Subsection (5) in Bill includes reference to pension credit under Northern Ireland legislation

Clause 35 (Power to extend judicial pension schemes)

Clause 18 (Power to extend judicial pension schemes)

Bill includes reference to Sheriffs' Pensions (Scotland) Act 1961 and in subsection (2) corresponding to subsection (3) in draft provides (in italics) for provision to be made out of the Consolidated Fund

Subsection (4) in Bill includes reference to pension credit under Northern Ireland legislation


Clause 36 (Disapplication of restrictions on alienation)

Clause 19 (Disapplication of restrictions on alienation)

None

Clause 37 (Information)

Clause 20 (Information)

None

Clause 38 (Interpretation of Chapter I)

Clause 21 (Interpretation of Chapter I)

Subsection (1) in Bill omits references to 'self employed pension arrangement' and adds definitions of 'retirement annuity contract', 'shareable rights' and 'trustees or managers'

New subsection (3) in Bill adds to definition of 'pensionable service'


Clause 39 (Shareable state scheme rights)


New in Bill; defines 'shareable state scheme rights'

Clause 40 (Activation of benefit sharing)

Clause 22 (Activation of benefit sharing)

New (1)(d) and (g) in Bill relating to overseas divorces

New (1) (h) and (i) in Bill relating to Northern Ireland legislation

In subsection (2)(a) explicit reference to mediation in Draft replaced by 'such circumstances as the Lord Chancellor may prescribe by regulations'

In subsection (3) in Bill qualifying agreements in Scotland to be 'entered into in such circumstances as the Secretary of State may prescribe by regulations'

In subsection (5)(c) in Bill 'relevant rights' replaced by 'shareable rights'

New subsection (6) in Bill relating to section 12A of the Family Law (Scotland) Act 1985

Subsection (7) in Bill rewords subsection (6) in Draft to refer to 'relevant date' and 'relevant matrimonial documents'

Subsections (8) and (9) in Bill define 'relevant date' and 'relevant matrimonial documents'

New subsection (10) allowing extension of deadline in Scotland


Clause 41 (Creation of state scheme pension debits and credits)

Clause 23 (Creation of state scheme pension debits and credits)

Subsection (2) in Bill refers to 'shareable' rights where Draft had 'relevant'

Subsection (6) in Bill omits definition of 'specified percentage'


Clause 42 (Effect of state scheme pension debits and credits)

Clause 24 (Effect of state scheme pension debits and credits)

None

Clause 43 (Interpretation of Chapter II)

Clause 25 (Interpretation of Chapter II)

Bill adds definition of 'shareable state scheme rights' given in Clause 39 above

Clause 68 (Regulations and orders)

Clause 26 (Regulations)

Bill includes standard provisions relating to making statutory instruments also set out in Draft


Clause 27 (Minor amendments of the Matrimonial Causes Act 1973)

Subsection (3) in Draft replaced by paragraph 1(3) of Schedule 4 to Bill

Clause 69 (Consequential amendments etc. relating to Parts III and IV)

Clause 29 (Consequential amendments) — part

Bill introduces Schedule 9 see below and gives Secretary of State powers by regulations to make consequential or transitional amendments to statutory instruments

Clause 70 (Transitional provisions)


Bill provides that pension sharing orders will only apply to divorces initiated after the Act comes into force

Clause 72 (Repeals)

Clause 30 (Repeals)

Bill introduces Schedule 10(see below) which includes items from Schedule 5 to Draft

Clause 73 (Commencement)

Clause 31 (Commencement)

Bill has similar division to Draft between Lord Chancellor and Secretary of State for appointing dates for provisions to come into force

Clause 74 (Extent)

Clause 32 (Extent)

Bill also extends to Northern Ireland

Clause 75 (Short title)

Clause 3 (Short title)

Welfare Reform and Pensions Act 1999 replaces Pension Sharing Act 1998

Schedule 3

(Pension sharing orders: England and Wales)


Schedule 1

(Pension sharing orders: England and Wales)


Bill re-words new subsection (2A) to be inserted in Section 21 of Matrimonial Causes Act 1973, and inserts new subsection (5A); and does not insert additions to subsection(6) and new subsection(7) from Draft

Bill re-words subsections (5) and (6) and adds new subsection (7) in new Section 24C to be inserted in Matrimonial Causes Act 1973

Bill replaces Section 24E to be inserted in Matrimonial Causes Act 1973 by new Sections 24E to 24G

Bill adds new subsection (4D) to Section 31 of Matrimonial Causes Act 1973

Bill re-words subsections (7G) and (7H) to be inserted in to Section 31 of Matrimonial Causes Act 1973

Bill adds subsection (15) to Section 31 of Matrimonial Causes Act 1973, relating to power to make regulations

Bill re-words new Section 40A to be inserted in Matrimonial Causes Act 1973


Schedule 4 (Amendments of sections 25B to 25D of the Matrimonial Causes Act 1973)

Schedule 4 (Consequential amendments) — part

Schedule 4 in Draft also included amendments to Family Law (Scotland) Act 1985, Social Security Contributions and Benefits Act 1992, Social Security Administration Act 1992, Pension Schemes Act 1993, Pensions Act 1995 (see Bill Schedule 9 below)

In relation to sections 25B to 25D of the Matrimonial Causes Act 1973:

Bill includes provision from Clause 27(3) of Draft for Section 25B(2) to cease to have effect

Bill re-words whole of subsection (5) of Section 25B

Bill makes changes in subsection (7) of Section 25B relating to commutation

Bill inserts new subsections (7A) and (7B) in Section 25B limiting application of subsection (7)

Bill inserts new subsection (4) in Section 25C

Bill re-words whole of subsection (1) of Section 25D

Bill allows Lord Chancellor to make regulations in subsection (2) of Section 25D replacing paragraph 3(5) of Schedule in Draft

Bill substitutes 'arrangement' for 'scheme' in paragraph (a) of subsection (2) of Section 25D

Bill inserts new paragraphs (ab) and (ba), omits paragraphs (c) and (d) and omits words after paragraph (e) in Section 25D

Bill inserts new subsections (2A) to (2F) relating to power to make regulations in Section 25D

Bill omits definition of 'self employed pension arrangement' in subsection (3) of Section 25D and includes definitions of 'retirement annuity contract', 'shareable state scheme rights' and 'trustees or managers'


Schedule 5 (Pension credits: mode of discharge)

Schedule 2 (Pension credits: mode of discharge)

Bill omits references to 'self employed pension arrangement'

Bill refers to 'trustees or managers of the scheme' instead of 'person responsible for the pension arrangement'

Bill includes reference to Northern Ireland in paragraph 4(5)

Bill has new paragraph 5 on conferral of rights

Bill refers to 'shareable' rights in paragraph 9


Schedule 6 (Effect of state scheme pension debits and credits)

Schedule 3 (Effect of state scheme pension debits and credits)

None

Schedule 8

(Welfare benefits: minor and consequential amendments)

paragraph 27


Clause 28 (Amendment of section 48A(4) of the Social Security Contributions and Benefits Act 1992)

None
a

Schedule 9

(Parts III and IV: consequential amendments)


Schedule 4 (Consequential amendments) — part

Bill amends section 37(1) of Matrimonial Causes Act 1973

Bill amends Paragraph 3 of Schedule 1 to the Supreme Court Act 1981

Bill amends Sections 17 and 21 of the Matrimonial and Family Proceedings Act 1984

Remainder of Draft Schedule 4 is contained in Schedule 9 with the following differences:

Family Law (Scotland) Act 1985: new subsection 8(4) and section 8A, substituted subsection 10(8) and new subsection 10(8A), change to subsection 10(9), amendments to Section 16 and inclusion of definitions of 'pension arrangement', 'relevant state scheme rights' and 'retirement annuity contract',

Social Security Contributions and Benefits Act 1992: no change

Social Security Administration Act 1992 : Bill adds changes to Sections 155A, 163(2) and 165(5) of Act

Pension Schemes Act 1993:

Bill adds changes to sections 50, 52,85, 129, 178 and 181

Pensions Act 1995: Bill omits new (ia) from Section 73(3)(c) and makes changes to Sections 99(2) and 167(4)


Schedule 10 (Repeals)

Schedule 5 (Repeals)

The Bill does not repeal the words 'or 31A' in section 24(3) of the Matrimonial Causes Act 1973 from the Draft; and in addition to the repeals in the Draft, the Bill repeals paragraphs (c) and (d) and the words after paragraph (e) in section 25D(2) of the Matrimonial Causes Act 1973, the word 'made' from two places in section 21 of the Matrimonial and Family Proceedings Act 1984, and the words 'or of' from section 178(a) of the Pension Schemes Act 1993



 
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