Pensions Bill

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 1 — The Pensions Regulator
1

A
Bill
To
Make provision relating to pensions and financial planning for retirement and
provision relating to entitlement to bereavement payments, and for connected
purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Part 1
The Pensions Regulator
Establishment
1
The Pensions Regulator
There shall be a body corporate called the Pensions Regulator (in this Act
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referred to as “the Regulator”).
2
Membership of the Regulator
(1)
The Regulator is to consist of the following members—
(a)
a chairman appointed by the Secretary of State,
(b)
the Chief Executive of the Regulator, and
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(c)
at least five other persons appointed by the Secretary of State after
consulting the chairman.
(2)
The chairman must not be appointed from the staff of the Regulator or be the
chairman of the Board of the Pension Protection Fund (see section 82).
(3)
At least two of the members appointed under subsection (1)(c) must be
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appointed from the staff of the Regulator.
(4)
In appointing persons under subsection (1)(c) the Secretary of State must
secure that a majority of the members of the Regulator are non-executive
members.

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Part 1 — The Pensions Regulator
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(5)
No member of the staff of the Board of the Pension Protection Fund is eligible
for appointment as a member of the Regulator.
(6)
In this Part—
(a)
references to executive members of the Regulator are to—
(i)
the Chief Executive, and
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(ii)
the members appointed under subsection (1)(c) from the staff of
the Regulator, and
(b)
references to non-executive members of the Regulator are to members
who are not executive members.
3
Further provision about the Regulator
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Schedule 1 makes further provision about the Regulator, including provision
as to—
the terms of appointment, tenure and remuneration of members,
the appointment of the Chief Executive and other staff,
the proceedings of the Regulator,
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its funding and accounts, and
the status and liability of the Regulator, its members and staff.
General provisions about functions
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Regulator’s functions
(1)
The Regulator has—
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(a)
the functions transferred to it from the Occupational Pensions
Regulatory Authority by virtue of this Act or any provisions in force in
Northern Ireland corresponding to this Act, and
(b)
any other functions conferred by, or by virtue of, this or any other
enactment.
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(2)
As regards the exercise of the Regulator’s functions—
(a)
the non-executive functions listed in section 9(3) must be discharged by
the Non-Executive Committee by virtue of section 9(2),
(b)
the functions mentioned in the following provisions are exercisable
only by the Determinations Panel—
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(i)
section 11(1) (the power in certain circumstances to determine
whether to exercise the functions listed in Schedule 2 and to
exercise them), and
(ii)
section 73(8) (the functions concerning the compulsory review
of certain determinations), and
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(c)
the exercise of other functions of the Regulator may be delegated by the
Regulator under paragraph 20 of Schedule 1.
(3)
Subsection (2) is subject to any regulations made by the Secretary of State
under paragraph 21 of Schedule 1 (power to limit or permit delegation of
functions).
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5
Regulator’s objectives
(1)
The main objectives of the Regulator in exercising its functions are—

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Part 1 — The Pensions Regulator
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(a)
to protect the benefits under occupational pension schemes of, or in
respect of, members of such schemes,
(b)
to protect the benefits under personal pension schemes of, or in respect
of, members of such schemes within subsection (2),
(c)
to reduce the risk of situations arising which may lead to compensation
5
being payable from the Pension Protection Fund (see Part 2), and
(d)
to promote, and to improve understanding of, the good administration
of work-based pension schemes.
(2)
For the purposes of subsection (1)(b) the members of personal pension schemes
within this subsection are—
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(a)
the members who are employees in respect of whom direct payment
arrangements exist, and
(b)
where the scheme is a stakeholder pension scheme, any other members.
(3)
In this section—

“stakeholder pension scheme” means a personal pension scheme which—
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(a)
in the case of a scheme established under a trust, is or has been
registered under section 2 of the Welfare Reform and Pensions
Act 1999 (c. 30) (stakeholder pension schemes), or
(b)
in any other case, is registered under that section, and

“work-based pension scheme” means—
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(a)
an occupational pension scheme,
(b)
a personal pension scheme where direct payment arrangements
exist in respect of one or more members of the scheme who are
employees, or
(c)
a stakeholder pension scheme.
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6
Supplementary powers
The Regulator may do anything (except borrow money) which—
(a)
is calculated to facilitate the exercise of its functions, or
(b)
is incidental or conducive to their exercise.
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Transfer of OPRA’s functions to the Regulator
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(1)
Subject to the provisions of this Act, the functions of the Occupational Pensions
Regulatory Authority (“OPRA”) conferred by or by virtue of—
(a)
the Pension Schemes Act 1993 (c. 48),
(b)
the Pensions Act 1995 (c. 26), and
(c)
the Welfare Reform and Pensions Act 1999,
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are hereby transferred to the Regulator.
(2)
Accordingly—
(a)
in section 181(1) of the Pension Schemes Act 1993 (which defines “the
Regulatory Authority” to mean OPRA), for the definition of “the
Regulatory Authority” substitute—
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““the Regulatory Authority” means the Pensions Regulator;”,
(b)
in section 124(1) of the Pensions Act 1995 (which defines “the
Authority”, in Part 1 of that Act, to mean OPRA), for the definition of
“the Authority” substitute—

““the Authority” means the Pensions Regulator;”,
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(c)
in section 8 of the Welfare Reform and Pensions Act 1999 (c. 30) (which
defines “the Authority”, in Part 1 of that Act to mean OPRA), for the
definition of “the Authority” substitute—

““the Authority” means the Pensions Regulator;”, and
(d)
in section 33 of that Act (time for discharge of pension credit liability),
5
in subsection (5) for “the Occupational Pensions Regulatory Authority”
substitute “the Pensions Regulator”.
The Non-Executive Committee and the Determinations Panel
8
The Non-Executive Committee
(1)
The Regulator must establish and maintain a committee consisting of—
10
(a)
the chairman of the Regulator, and
(b)
the other non-executive members of the Regulator,

(in this Part referred to as “the Non-Executive Committee”).
(2)
The chairman of the Regulator is to be the chairman of the Non-Executive
Committee.
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(3)
The Non-Executive Committee may establish sub-committees.
(4)
The members of any such sub-committee—
(a)
may include persons who are not members of the Non-Executive
Committee or of the Regulator, but
(b)
must not include persons who are executive members or other staff of
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the Regulator.
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Functions exercisable by the Non-Executive Committee
(1)
The functions listed in subsection (3) (in this Part referred to as “the non-
executive functions”) are functions of the Regulator.
(2)
The non-executive functions must be discharged on behalf of the Regulator by
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the Non-Executive Committee (and are not otherwise dischargeable by or on
behalf of the Regulator).
(3)
The non-executive functions are—
(a)
the duty to contribute to and keep under review the strategic direction
of the Regulator;
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(b)
the duty to scrutinise the performance of the Chief Executive in
securing that the functions of the Regulator are exercised efficiently and
effectively;
(c)
the duty to monitor the extent to which the Regulator is meeting its
objectives and targets (including its main objectives as set out in section
35
5 or in any corresponding provision in force in Northern Ireland);
(d)
the duty to monitor the Regulator’s reporting of its activities to the
Secretary of State under section 12;
(e)
the duty to keep under review the question whether the Regulator’s
internal financial controls secure the proper conduct of its financial
40
affairs;
(f)
the duty to determine under paragraph 8(4)(b) of Schedule 1, subject to
the approval of the Secretary of State, the terms and conditions as to

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remuneration of any Chief Executive appointed under paragraph
8(4)(a) of that Schedule.
(4)
The Non-Executive Committee must prepare a report on the discharge of the
non-executive functions for inclusion in the Regulator’s annual report to the
Secretary of State under section 12.
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(5)
The Non-Executive Committee’s report must relate to the same period as that
covered by the Regulator’s report.
(6)
The Non-Executive Committee may authorise any of its members or any of its
sub-committees to discharge on its behalf—
(a)
any of the non-executive functions;
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(b)
the duty to prepare a report under subsection (4).
(7)
The Non-Executive Committee (or any of its sub-committees) may be
authorised under paragraph 20(1) of Schedule 1 to exercise further functions of
the Regulator.
(8)
This section is subject to any regulations made by the Secretary of State under
15
paragraph 21 of Schedule 1 (power to limit or permit delegation of functions).
10
The Determinations Panel
(1)
The Regulator must establish and maintain a committee consisting of—
(a)
a chairman, and
(b)
at least six other persons,
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(in this Part referred to as “the Determinations Panel”).
(2)
The Regulator must appoint as the chairman of the Panel the person nominated
in accordance with paragraph 11 of Schedule 1 (nomination by a committee
established by the chairman of the Regulator).
(3)
The chairman of the Panel must—
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(a)
decide the number of persons to be appointed as the other members of
the Panel, and
(b)
nominate a person suitable for each of those appointments.
(4)
The Regulator must then appoint as the other members of the Panel the
persons nominated by the chairman of the Panel.
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(5)
The following are ineligible for appointment as members of the Panel—
(a)
any member of the Regulator;
(b)
any member of the staff of the Regulator;
(c)
any member of the Board of the Pension Protection Fund;
(d)
any member of the staff of that Board.
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(6)
The Panel may establish sub-committees consisting of members of the Panel.
(7)
Further provision about the Panel is made in Schedule 1 including provision as
to the terms of appointment, tenure and remuneration of members and as to its
procedure.
11
Functions exercisable by the Determinations Panel
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(1)
The Determinations Panel is to exercise on behalf of the Regulator—

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(a)
the power to determine, in the circumstances described in subsection
(2), whether to exercise a reserved regulatory function, and
(b)
where it so determines to exercise a reserved regulatory function, the
power to exercise the function in question.
(2)
Those circumstances are—
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(a)
where the Regulator considers that the exercise of the reserved
regulatory function may be appropriate, or
(b)
where an application is made under or by virtue of any of the
provisions listed in subsection (6) for the Regulator to exercise the
reserved regulatory function.
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(3)
Where subsection (1) applies, the powers mentioned in that subsection are not
otherwise exercisable by or on behalf of the Regulator.
(4)
For the purposes of this Part, a function of the Regulator is a “reserved
regulatory function” if it is a function listed in Schedule 2.
(5)
Regulations may amend Schedule 2 by—
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(a)
adding any function of the Regulator conferred by, or by virtue of, this
or any other enactment,
(b)
omitting any such function, or
(c)
altering the description of any such function contained in that
Schedule.
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(6)
The provisions referred to in subsection (2)(b) are—
(a)
section 23(2) (application for order validating action taken in
contravention of freezing order);
(b)
section 3(3) of the Pensions Act 1995 (c. 26) (application for revocation
of prohibition order);
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(c)
section 4(5) of that Act (application for revocation of a suspension
order);
(d)
section 7(5A) of that Act (application for appointment of a trustee
under section 7(3)(a) or (c) of that Act);
(e)
section 29(5) of that Act (application for waiver of disqualification);
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(f)
section 69(1) of that Act (application for order authorising modification
or modifying a scheme);
(g)
section 71A(2) of that Act (application for modifying a scheme to secure
winding up);
(h)
section 99(4A) of the Pension Schemes Act 1993 (application for
35
extension under section 99(4) of that Act of a period for compliance);
(i)
section 101J(6)(a) of that Act (application for extension under section
101J(2) of that Act of a period for compliance).
(7)
The Panel may be authorised under paragraph 20(4) or (6) of Schedule 1 to
exercise further functions of the Regulator on behalf of the Regulator.
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(8)
The Panel may authorise any of its members or any of its sub-committees to
exercise on its behalf—
(a)
any of the functions of the Regulator which are exercisable by the Panel
on behalf of the Regulator, or
(b)
the functions of the Panel under section 67(3), section 73(9) and
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paragraph 18(2) of Schedule 1 (procedure).

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(9)
This section is subject to any regulations made by the Secretary of State under
paragraph 21 of Schedule 1 (power to limit or permit delegation of functions).
Annual report
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Annual reports to Secretary of State
(1)
The Regulator must prepare a report for each financial year.
5
(2)
Each report—
(a)
must deal with the activities of the Regulator in the financial year for
which it is prepared, and
(b)
must include the report prepared by the Non-Executive Committee
under section 9(4).
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(3)
The Regulator must send each report to the Secretary of State as soon as
practicable after the end of the financial year for which it is prepared.
(4)
The Secretary of State must lay before each House of Parliament a copy of
every report received by him under this section.
(5)
In this section “financial year” means—
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(a)
the period beginning with the date on which the Regulator is
established and ending with the next following 31st March, and
(b)
each successive period of 12 months.
Provision of information, education and assistance
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Provision of information, education and assistance
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(1)
The Regulator may provide such information, education and assistance as it
considers appropriate to those involved in—
(a)
the administration of work-based pension schemes, or
(b)
advising the trustees or managers in relation to such schemes as to their
operation.
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(2)
To the extent that it is not authorised to do so under subsection (1), the
Regulator may also provide such information, education and assistance as it
considers appropriate to—
(a)
employers in relation to work-based pension schemes,
(b)
persons involved in advising such employers as to the operation of
30
such schemes, or
(c)
persons upon whom duties are imposed by or by virtue of section 195
(information and advice to employees).
(3)
For the purposes of subsection (2), “employers in relation to work-based
pension schemes” means, in the case of stakeholder pension schemes, the
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persons upon whom duties are imposed by or by virtue of section 3 of the
Welfare Reform and Pensions Act 1999 (c. 30) (duty of employers to facilitate
access to stakeholder pension schemes).
(4)
In this section—

“assistance” does not include financial assistance, and
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