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A
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Bill
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To
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Provide for the
distribution of the assets of pension schemes on winding-up and the
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duties of trustees in relation thereto;
to make provision relating to the fees chargeable
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in relation to the process of winding-up
a pension scheme; to establish arrangements
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for a compensation scheme for certain
members of occupational schemes, including
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for the establishment of a levy on pension
schemes; and to establish a review of the
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status of pensions-related liabilities
in insolvency; and for connected purposes.
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Be
it enacted by the Queen’s most Excellent Majesty, by and
with the advice and
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consent of the Lords Spiritual and
Temporal, and Commons, in this present
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Parliament assembled, and by the authority
of the same, as follows:—
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1 Repeal
of section 73 of the Pensions Act 1995
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Section 73 of the Pensions Act 1995 (c. 26)
is hereby repealed.
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2 Order
of assets
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(1) This
section applies, where a salary related occupational pension scheme to
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which section 56 of the Pensions Act
1995 applies is being wound up, to
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5
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determine the order in which the assets
of the scheme are to be applied towards
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satisfying the liabilities in respect
of pensions and other benefits (including
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increases in pensions).
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(2) The
assets of the scheme must be applied first towards satisfying the amounts
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of the liabilities mentioned in paragraph
(a) of subsection (3); and once those
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10
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liabilities are satisfied, the remaining
assets must be applied towards satisfying
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the amounts of the liabilities mentioned
in later paragraphs of subsection (3) in
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proportion to the amount by which the
remaining assets of the scheme satisfy
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the liabilities in respect of pensions
and other benefits (including increases in
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pensions) under section 56 of the Pensions
Act 1995.
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15
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(3) The
liabilities referred to in subsection (2) are—
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(a) where
a person's entitlement to payment of pension or other benefit has
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arisen, liability for that pension or
benefit and for any pension or other
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benefits which will be payable to dependants
of that person on his
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(a) death
(but excluding increases to pensions), subject to a maximum
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annual income of an amount to be determined
by the Secretary of State;
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(b) any
liability for pensions or other benefits which, in the opinion of the
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trustees, are derived from the payment
by any member of the scheme
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of voluntary contributions;
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5
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(c) where
a person's entitlement to payment of pension or other benefit has
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arisen, liability for that pension or
benefit and for any pension or other
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benefit which will be payable to dependants
of that person on his death
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(but excluding increases to pensions)
in excess of that entitlement
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under paragraph (a) of subsection (3);
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10
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(d) any
liability for—
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(i) pensions
or other benefits which have accrued to or in respect
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of any members of the scheme (but
excluding increases to
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pensions), or
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(ii) (in
respect of members with less than two years’ pensionable
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service) the return of contributions;
and
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(e) any
liability for increases to pensions referred to in paragraphs (a), (c)
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and (d);
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and,
for the purposes of subsection (2), the amounts of the liabilities mentioned
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in paragraphs (a) to (e) are to be
taken to be the amounts calculated and
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20
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verified in the prescribed manner.
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(4) To
the extent that any liabilities, as calculated in accordance with the
rules of
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the scheme, have not been satisfied
under subsection (2), any remaining assets
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of the scheme must then be applied
towards satisfying those liabilities (as so
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calculated) in the order provided for
in the rules of the scheme.
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(5) If
the scheme confers power on any person other than the trustees or managers
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to apply the assets of the scheme in
respect of pensions or other benefits
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(including increases in pensions),
it cannot be exercised by that person but may
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be exercised instead by the trustees
or managers.
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(6) If
this section is not complied with-
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(a) section
3 of the Pensions Act 1995 applies to any trustee who has failed
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to take all such steps as are reasonable
to secure compliance, and
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(b) section
10 of the Pensions Act 1995 applies to any trustee or manager
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who has failed to take all such steps.
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(7) Regulations
may modify subsection (3).
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(8) This
Act does not apply to an occupational pension scheme falling within a
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prescribed class or description.
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(9) This
Act shall have effect with prescribed modifications in cases where part
of
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a salary related occupational pension
scheme to which section 56 of the
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Pensions Act 1995 applies is being
wound up.
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40
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3 Review
of status of pensions related debt
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The Secretary of State shall conduct a review
of the status of pensions related
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debt on insolvency of the sponsoring employer
and shall publish the review
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within 6 months of this Act receiving Royal
Assent.
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4 Fees
to advisers
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The Secretary of State may by regulation
give an agency power to assess and
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direct what costs should be paid in connection
with the winding-up of a
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pension scheme.
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5 Levy
on unclaimed assets
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The Secretary of State shall within 6 months
of this Act receiving Royal Assent
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lay before both House of Parliament proposals
for legislation to introduce a
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levy on unclaimed assets to fund a compensation
scheme for certain members
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of occupational pension schemes as may be
defined by future legislation or
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regulation.
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6 Levy
on occupational pension schemes
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The Secretary of State shall within 6 months
of this Act receiving Royal Assent
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lay before both Houses of Parliament proposals
for legislation to introduce a
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levy scheme on occupational pension schemes
to compensate certain members
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of occupational schemes as may be defined
by future legislation or regulation.
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7 Commencement
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This Act shall come into force on such day
as the Secretary of State may by
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order made by statutory instrument appoint.
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8 Extent
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This Act does not extend to Northern Ireland.
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9 Short
title
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This Act may be cited as the Pensions (Winding-up)
Act 2003.
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