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Pensions Bill


Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions

125

 

198     

Member-nominated trustees and directors: supplementary

(1)   

Regulations may modify sections 196 and 197 in their application to prescribed

cases.

(2)   

In sections 196 and 197

   

“company” means a company within the meaning given by section 735(1)

5

of the Companies Act 1985 (c. 6) or a company which may be wound up

under Part 5 of the Insolvency Act 1986 (c. 45) (unregistered

companies);

   

“occupational trust scheme” means an occupational pension scheme

established under a trust.

10

Obligations of trustees of occupational pension schemes

199     

Investment principles

For section 35 of the Pensions Act 1995 (c. 26) (investment principles)

substitute—

“35     

Investment principles

15

(1)   

The trustees of a trust scheme must secure—

(a)   

that a statement of investment principles is prepared and

maintained for the scheme, and

(b)   

that the statement is reviewed at such intervals, and on such

occasions, as may be prescribed and, if necessary, revised.

20

(2)   

In this section “statement of investment principles”, in relation to a trust

scheme, means a written statement of the investment principles

governing decisions about investments for the purposes of the scheme.

(3)   

Before preparing or revising a statement of investment principles, the

trustees of a trust scheme must comply with any prescribed

25

requirements.

(4)   

A statement of investment principles must be in the prescribed form

and cover, amongst other things, the prescribed matters.

(5)   

Neither a trust scheme nor a statement of investment principles may

impose restrictions (however expressed) on any power to make

30

investments by reference to the consent of the employer.

(6)   

If in the case of a trust scheme—

(a)   

a statement of investment principles has not been prepared, is

not being maintained or has not been reviewed or revised, as

required by this section, or

35

(b)   

the trustees have not complied with the obligation imposed on

them by subsection (3),

   

section 10 applies to any trustee who has failed to take all reasonable

steps to secure compliance.

(7)   

Regulations may provide that this section is not to apply to any scheme

40

which is of a prescribed description.”

 

 

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions

126

 

200     

Requirement for knowledge and understanding: individual trustees

(1)   

This section applies to every individual who is a trustee of an occupational

pension scheme.

(2)   

In this section, “relevant scheme”, in relation to an individual, means any

occupational pension scheme of which he is a trustee.

5

(3)   

An individual to whom this section applies must, in relation to each relevant

scheme, be conversant with—

(a)   

the trust deed and scheme rules,

(b)   

any statement of investment principles for the time being maintained

under section 35 of the Pensions Act 1995 (c. 26),

10

(c)   

in the case of a relevant scheme to which Part 3 (scheme funding)

applies,  the statement of funding principles most recently prepared or

revised under section 180, and

(d)   

any other document recording policy for the time being adopted by the

trustees relating to the administration of the scheme generally.

15

(4)   

An individual to whom this section applies must have knowledge and

understanding of—

(a)   

the law relating to pensions and trusts,

(b)   

the principles relating to—

(i)   

the funding of occupational pension schemes, and

20

(ii)   

investment of the assets of such schemes, and

(c)   

such other matters as may be prescribed.

(5)   

The degree of knowledge and understanding required by subsection (4) is that

appropriate for the purposes of enabling the individual properly to exercise his

functions as trustee of any relevant scheme.

25

201     

Requirement for knowledge and understanding: corporate trustees

(1)   

This section applies to any company which is a trustee of an occupational

pension scheme.

(2)   

In this section, “relevant scheme”, in relation to a company, means any

occupational pension scheme of which it is a trustee.

30

(3)   

A company to which this section applies must, in relation to each relevant

scheme, secure that each individual who exercises any function which the

company has as trustee of the scheme is conversant with each of the documents

mentioned in subsection (4) so far as it is relevant to the exercise of the function.

(4)   

Those documents are—

35

(a)   

the trust deed and scheme rules,

(b)   

any statement of investment principles for the time being maintained

under section 35 of the Pensions Act 1995,

(c)   

in the case of a relevant scheme to which Part 3 (scheme funding)

applies,  the statement of funding principles most recently prepared or

40

revised under section 180, and

(d)   

any other document recording policy for the time being adopted by the

trustees relating to the administration of the scheme generally.

 

 

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions

127

 

(5)   

A company to which this section applies must secure that any individual who

exercises any function which the company has as trustee of any relevant

scheme has knowledge and understanding of—

(a)   

the law relating to pensions and trusts,

(b)   

the principles relating to—

5

(i)   

the funding of occupational pension schemes, and

(ii)   

investment of the assets of such schemes, and

(c)   

such other matters as may be prescribed.

(6)   

The degree of knowledge and understanding required by subsection (5) is that

appropriate for the purposes of enabling the individual properly to exercise the

10

function in question.

(7)   

References in this section to the exercise by an individual of any function of a

company are to anything done by the individual on behalf of the company

which constitutes the exercise of the function by the company.

202     

Requirement for knowledge and understanding: supplementary

15

(1)   

For the purposes of sections 200 and 201, a person’s functions as trustee of a

relevant scheme are any functions which he has by virtue of being such a

trustee and include, in particular—

(a)   

any functions which he has as one of the trustees authorised under

section 34(5)(a) of the Pensions Act 1995 (c. 26) (delegation of

20

investment discretions) in the case of the scheme, and

(b)   

any functions which he otherwise has as a member of a committee of

the trustees of the scheme.

(2)   

Regulations may provide for any provision in section 200 or 201

(a)   

not to apply, or

25

(b)   

to apply with modifications,

   

to a trustee in prescribed circumstances.

(3)   

Nothing in either of those sections affects any rule of law requiring a trustee to

have knowledge of, or expertise in, any matter.

Pension protection on transfer of employment

30

203     

Conditions for pension protection

(1)   

This section applies in relation to a person (“the employee”) where—

(a)   

there is a transfer of an undertaking, or part of an undertaking, to which

the TUPE Regulations apply,

(b)   

by virtue of the transfer the employee ceases to be employed by the

35

transferor and becomes employed by the transferee, and

(c)   

at the time immediately before the employee becomes employed by the

transferee—

(i)   

there is an occupational pension scheme (“the scheme”) in

relation to which the transferor is the employer, and

40

(ii)   

one of subsections (2), (3) and (4) applies.

(2)   

This subsection applies where—

(a)   

the employee is an active member of the scheme, and

 

 

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions

128

 

(b)   

if any of the benefits that may be provided under the scheme are money

purchase benefits—

(i)   

the transferor is required to make contributions to the scheme in

respect of the employee, or

(ii)   

the transferor is not so required but has made one or more such

5

contributions.

(3)   

This subsection applies where—

(a)   

the employee is not an active member of the scheme but is eligible to be

such a member, and

(b)   

if any of the benefits that may be provided under the scheme are money

10

purchase benefits, the transferor would have been required to make

contributions to the scheme in respect of the employee if the employee

had been an active member of it.

(4)   

This subsection applies where—

(a)   

the employee is not an active member of the scheme, nor eligible to be

15

such a member, but would have been an active member of the scheme

or eligible to be such a member if he had been employed by the

transferor for a longer period, and

(b)   

if any of the benefits that may be provided under the scheme are money

purchase benefits, the transferor would have been required to make

20

contributions to the scheme in respect of the employee if the employee

had been an active member of it.

(5)   

For the purposes of this section, the condition in subsection (1)(c) is to be

regarded as satisfied in any case where it would have been satisfied but for any

action taken by the transferor by reason of the transfer.

25

(6)   

In subsection (1)(a), the reference to an undertaking, or part of an undertaking,

has the same meaning as in the TUPE Regulations.

(7)   

In the case of a scheme which is contracted-out by virtue of section 9 of the

Pension Schemes Act 1993 (c. 48), the references in subsections (2)(b), (3)(b) and

(4)(b) to contributions mean contributions other than minimum payments

30

(within the meaning of that Act).

(8)   

In this section—

   

the “TUPE regulations” means the Transfer of Undertakings (Protection

of Employment) Regulations 1981 (S.I. 1981/1794);

   

references to the transferor include any associate of the transferor, and

35

section 435 of the Insolvency Act 1986 (c. 45) applies for the purposes of

this section as it applies for the purposes of that Act.

204     

Form of protection

(1)   

In a case where section 203 applies, it is a condition of the employee’s contract

of employment with the transferee that the requirements in subsection (2) or

40

the requirement in subsection (3) are complied with.

(2)   

The requirements in this subsection are that—

(a)   

the transferee secures that, as from the relevant time, the employee is,

or is eligible to be, an active member of an occupational pension scheme

in relation to which the transferee is the employer, and

45

(b)   

in a case where the scheme is a money purchase scheme, as from the

relevant time—

 

 

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions

129

 

(i)   

the transferee makes relevant contributions to the scheme in

respect of the employee, or

(ii)   

if the employee is not an active member of the scheme but is

eligible to be such a member, the transferee would be required

to make such contributions if the employee were an active

5

member, and

(c)   

in a case where the scheme is not a money purchase scheme, as from the

relevant time the scheme—

(i)   

satisfies the statutory standard referred to in section 12A of the

Pension Schemes Act 1993 (c. 48), or

10

(ii)   

if regulations so provide, complies with such other

requirements as may be prescribed.

(3)   

The requirement in this subsection is that, as from the relevant time, the

transferee makes relevant contributions to a stakeholder pension scheme of

which the employee is a member.

15

(4)   

The requirement in subsection (3) is for the purposes of this section to be

regarded as complied with by the transferee during any period in relation to

which the condition in subsection (5) is satisfied.

(5)   

The condition in this subsection is that the transferee has offered to make

relevant contributions to a stakeholder pension scheme of which the employee

20

is eligible to be a member (and the transferee has not withdrawn the offer).

(6)   

Subsection (1) does not apply in relation to a contract if or to the extent that the

employee and the transferee so agree at any time after the time when the

employee becomes employed by the transferee.

(7)   

In this section—

25

   

“the relevant time” means—

(a)   

in a case where section 203 applies by virtue of the application

of subsection (2) or (3) of that section, the time when the

employee becomes employed by the transferee;

(b)   

in a case where that section applies by virtue of the application

30

of subsection (4) of that section, the time at which the employee

would have been a member of the scheme referred to in

subsection (1)(c)(i) of that section or (if earlier) would have been

eligible to be such a member;

   

“relevant contributions” means such contributions in respect of such

35

period or periods as may be prescribed;

   

“stakeholder pension scheme” means a pension scheme which is

registered under section 2 of the Welfare Reform and Pensions Act 1999

(c. 30).

Safeguarding pension rights

40

205     

Paternity leave and adoption leave

(1)   

In Schedule 5 to the Social Security Act 1989 (c. 24) (employment-related

schemes for pensions or other benefits: equal treatment), after paragraph 5

 

 

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions

130

 

insert—

“Unfair paternity leave provisions

5A    (1)  

Where an employment-related benefit scheme includes any unfair

paternity leave provisions (irrespective of any differences on the

basis of sex in the treatment accorded to members under those

5

provisions), then—

(a)   

the scheme shall be regarded to that extent as not complying

with the principle of equal treatment; and

(b)   

subject to sub-paragraph (3), this Schedule shall apply

accordingly.

10

      (2)  

In this paragraph “unfair paternity leave provisions”, in relation to

an employment-related benefit scheme, means any provision—

(a)   

which relates to continuing membership of, or the accrual of

rights under, the scheme during any period of paid paternity

leave in the case of any member who is (or who, immediately

15

before the commencement of such a period, was) an

employed earner and which treats such a member otherwise

than in accordance with the normal employment

requirement; or

(b)   

which requires the amount of any benefit payable under the

20

scheme to or in respect of any such member, to the extent that

it falls to be determined by reference to earnings during a

period which included a period of paid paternity leave, to be

determined otherwise than in accordance with the normal

employment requirement.

25

      (3)  

In the case of any unfair paternity leave provision—

(a)   

the more favourable treatment required by paragraph 3(1) is

treatment no less favourable than would be accorded to the

member in accordance with the normal employment

requirement; and

30

(b)   

paragraph 3(2) does not authorise the making of any such

election as is there mentioned;

           

but, in respect of any period of paid paternity leave, a member shall

only be required to pay contributions on the amount of contractual

remuneration or statutory paternity pay actually paid to or for him

35

in respect of that period.

      (4)  

In this paragraph—

“period of paid paternity leave”, in the case of a member,

means a period—

(a)   

throughout which the member is absent from work

40

in circumstances where sub-paragraph (5), (6) or (7)

applies, and

(b)   

for which the employer (or if he is no longer in his

employment, his former employer) pays him any

contractual remuneration or statutory paternity pay;

45

and

“the normal employment requirement” is the requirement that

any period of paid paternity leave shall be treated as if it

were a period throughout which the member in question

 

 

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions

131

 

works normally and receives the remuneration likely to be

paid for doing so.

      (5)  

This sub-paragraph applies if—

(a)   

the member’s absence from work is due to the birth or

expected birth of a child, and

5

(b)   

the member satisfies the conditions prescribed under section

171ZA(2)(a)(i) and (ii) of the Social Security Contributions

and Benefits Act 1992 in relation to that child.

      (6)  

This sub-paragraph applies if—

(a)   

the member’s absence from work is due to the placement or

10

expected placement of a child for adoption under the law of

any part of the United Kingdom, and

(b)   

the member satisfies the conditions prescribed under section

171ZB(2)(a)(i) and (ii) of that Act in relation to that child.

      (7)  

This sub-paragraph applies if—

15

(a)   

the member’s absence from work is due to the adoption or

expected adoption of a child who has entered the United

Kingdom in connection with or for the purposes of adoption

which does not involve the placement of the child for

adoption under the law of any part of the United Kingdom,

20

and

(b)   

the member satisfies the conditions prescribed under section

171ZB(2)(a)(i) and (ii) of that Act (as applied by virtue of

section 171ZK of that Act (adoption cases not involving

placement under the law of the United Kingdom)) in relation

25

to that child.

Unfair adoption leave provisions

5B    (1)  

Where an employment-related benefit scheme includes any unfair

adoption leave provisions (irrespective of any differences on the

basis of sex in the treatment accorded to members under those

30

provisions), then—

(a)   

the scheme shall be regarded to that extent as not complying

with the principle of equal treatment; and

(b)   

subject to sub-paragraph (3), this Schedule shall apply

accordingly.

35

      (2)  

In this paragraph “unfair adoption leave provisions”, in relation to

an employment-related benefit scheme, means any provision—

(a)   

which relates to continuing membership of, or the accrual of

rights under, the scheme during any period of paid adoption

leave in the case of any member who is (or who, immediately

40

before the commencement of such a period, was) an

employed earner and which treats such a member otherwise

than in accordance with the normal employment

requirement; or

(b)   

which requires the amount of any benefit payable under the

45

scheme to or in respect of any such member, to the extent that

it falls to be determined by reference to earnings during a

period which included a period of paid adoption leave, to be

determined otherwise than in accordance with the normal

employment requirement.

50

 

 

 
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