Pensions Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
132

      (3)
In the case of any unfair adoption 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
5
(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 adoption leave, a member shall
only be required to pay contributions on the amount of contractual
remuneration or statutory adoption pay actually paid to or for him
10
in respect of that period.
      (4)
In this paragraph—
“period of paid adoption leave”, in the case of a member,
means a period—
(a)
throughout which the member is absent from work
15
in circumstances where sub-paragraph (5) or (6)
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 adoption pay;
20
and
“the normal employment requirement” is the requirement that
any period of paid adoption leave shall be treated as if it
were a period throughout which the member in question
works normally and receives the remuneration likely to be
25
paid for doing so.
      (5)
This sub-paragraph applies if—
(a)
the member’s absence from work is due to the placement, or
expected placement, of a child for adoption under the law of
any part of the United Kingdom, and
30
(b)
the member is a person with whom the child is, or is expected
to be, placed for such adoption.
      (6)
This sub-paragraph applies if—
(a)
the member’s absence from work is due to the adoption or
expected adoption of a child who has entered the United
35
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,
and
(b)
the member is a person by whom the child has been or is
40
expected to be adopted.”
(2)
The provision that may be made under section 142(1) of the Adoption and
Children Act 2002 (c. 38) (power to make consequential etc provision to give
full effect to any provision of that Act) includes provision modifying
paragraph 5A or 5B of Schedule 5 to the Social Security Act 1989 (c. 24) (as
45
inserted by subsection (1) above).
206
Inalienability of occupational pension
(1)
Section 91 of the Pensions Act 1995 (c. 26) (inalienability of occupational
pension) is amended as follows.

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
133

(2)
In subsection (5) (exceptions to the rule of inalienability) at the end insert—
“(f)
subject to subsection (6), a charge or lien on, or set-off against,
the person in question’s entitlement, or right, for the purpose of
discharging some monetary obligation due from the person in
question to the scheme arising out of a payment made in error
5
in respect of the pension.”
(3)
In subsection (6) (limits on the charge, lien or set-off under subsection (5)(d) or
(e)) for “or (e)” substitute “, (e) or (f)”.
Payments by employers
207
Payments made by employers to personal pension schemes
10
(1)
Section 111A of the Pension Schemes Act 1993 (c. 48) (monitoring of
employers’ payments to personal pension schemes) is amended as follows.
(2)
For subsections (3) to (7) substitute—
“(3)
The trustees or managers of the scheme must monitor the payment of
contributions by or on behalf of the employer under the direct payment
15
arrangements.
(4)
The trustees or managers may request the employer to provide them,
(or arrange for them to be provided) with the payment information
specified in the request.
(5)
For the purposes of subsection (4) “payment information” is
20
information required by the trustees or managers to enable them to
discharge the duty imposed by subsection (3).
(6)
The employer must comply with a request under subsection (4) within
a reasonable period.
(7)
Where, as a result of the employer’s failure to so comply, the trustees or
25
managers are unable to discharge the duty imposed by subsection (3),
they must give notice to that effect to the Regulatory Authority within
a reasonable period.
(7A)
Where—
(a)
a contribution payable under the direct payment arrangements
30
has not been paid on or before its due date, and
(b)
the trustees or managers have reasonable cause to believe that
the failure to pay the contribution is likely to be of material
significance in the exercise by the Regulatory Authority of any
of their functions,
35

they must give notice to that effect to the Regulatory Authority and the
employee within a reasonable period after the due date.”
(3)
In subsection (8) (employer’s liability for civil penalties) for “subsection (3) or
(5)” substitute “subsection (6) and as a result the trustees or managers of the
scheme are unable to discharge the duty imposed by subsection (3)”.
40
(4)
In subsection (9) (liability of trustees or managers for civil penalties) for
“subsection (6) or (7)” substitute “subsection (7) or (7A)”.

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
134

208
Payments made by employers and members to occupational pension schemes
(1)
In section 49 of the Pensions Act 1995 (c. 26) (other responsibilities of trustees,
employers, etc), in subsection (9) (duty of trustee etc to report a failure by
employer to pay contributions deducted from earnings on time) for paragraph
(b) substitute—
5
“(b)
if the trustees or managers have reasonable cause to believe that
the failure is likely to be of material significance in the exercise
by the Authority of any of their functions, they must, except in
prescribed circumstances, give notice of the failure to the
Authority and the member within a reasonable period after the
10
end of the prescribed period under subsection (8).”
(2)
In section 88 of that Act (schedules of payments to money purchase schemes),
for subsection (1) (duty of trustees or managers to report a failure to pay
amounts on time) substitute—
“(1)
Where, in the case of an occupational pension scheme to which section
15
87 applies—
(a)
there is a failure to pay on or before the due date any amounts
payable in accordance with the payment schedule, and
(b)
the trustees or managers have reasonable cause to believe that
the failure is likely to be of material significance in the exercise
20
by the Authority of any of their functions,

they must, except in prescribed circumstances, give notice of the failure
to the Authority and to the members of the scheme within a reasonable
period after the due date.”
Deficiency in assets of certain occupational pension schemes
25
209
Debt due from the employer when assets insufficient
(1)
Section 75 of the Pensions Act 1995 (deficiencies in the assets) is amended as
follows.
(2)
For subsections (1) to (4) substitute—
“(1)
This section applies in relation to an occupational pension scheme other
30
than a scheme which is—
(a)
a money purchase scheme, or
(b)
of a prescribed description.
(2)
If—
(a)
at any time which falls—
35
(i)
when a scheme is being wound up, but
(ii)
before any insolvency event in relation to the employer
which occurs while the scheme is being wound up,

the value of the assets of the scheme is less than the amount at
that time of the liabilities of the scheme, and
40
(b)
the trustees or managers of the scheme designate that time for
the purposes of this subsection (before the occurrence of an
event within paragraph (a)(ii)),

an amount equal to the difference shall be treated as a debt due from
the employer to the trustees or managers of the scheme.
45

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
135


This is subject to subsection (3).
(3)
Subsection (2) applies only if before the commencement of the winding
up of the scheme—
(a)
no insolvency event has occurred in relation to the employer, or
(b)
any such event has been followed by an event within subsection
5
(6A)(b), (c) or (d).
(4)
Where—
(a)
immediately before a qualifying insolvency event occurs in
relation to the employer the value of the assets of the scheme is
less than the amount at that time of the liabilities of the scheme,
10
and
(b)
if the scheme was being wound up immediately before that
event, subsection (2) has not applied in relation to the scheme to
treat an amount as a debt due from the employer to the trustees
or managers of the scheme,
15

an amount equal to the difference shall be treated as a debt due from
the employer to the trustees or managers of the scheme.
(4A)
A debt under subsection (4) is to be taken, for the purposes of the law
relating to insolvency as it applies to the employer, to arise
immediately before the occurrence of the qualifying insolvency event.
20
(4B)
Where the scheme was not being wound up immediately before the
qualifying insolvency event, the debt due from the employer under
subsection (4) is contingent upon—
(a)
the occurrence, in relation to the scheme, of an event within
paragraph (a) of subsection (6A) in circumstances where that
25
event is the first event within that subsection to occur after the
qualifying insolvency event, or
(b)
the commencement of the winding up of the scheme before any
event within subsection (6A) occurs.”
(3)
In subsection (5) for “subsection (1)” substitute “subsections (2) and (4)”.
30
(4)
After subsection (6) insert—
“(6A)
The events within this subsection are—
(a)
the issuing of a notice under subsection (2) of section 96 of the
Pensions Act 2004 confirming that a scheme rescue is not
possible;
35
(b)
the issuing of such a notice confirming that a scheme rescue has
occurred;
(c)
the Board ceasing to be involved with the scheme by virtue of
an event within section 117(2)(c) of that Act (withdrawal where
no insolvency event likely to occur in six month period or
40
expiry of six month period without further insolvency event
occurring), or
(d)
if where an insolvency practitioner issues a notice under section
96(4) of that Act (confirmation of inability to confirm status of
scheme) section 117(4) of that Act (Board’s duty to consider
45
whether to withdraw) does not apply, the issuing of that notice.
(6B)
For the purposes of this section—

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
136

(a)
section 95 of the Pensions Act 2004 applies for the purposes of
determining if and when an insolvency event has occurred in
relation to the employer,
(b)
an insolvency event (“the current event”) in relation to the
employer is a qualifying insolvency event if—
5
(i)
it is the first insolvency event in relation to the
employer, or
(ii)
an event within subsection (6A)(b), (c) or (d) has
occurred in relation to the scheme since the date of the
last insolvency event (if any) to occur in relation to the
10
employer before the current event, and
(c)
references to an insolvency event in relation to an employer do
not include an insolvency event which occurred in relation to
him before he became the employer in relation to the scheme.”
(5)
Omit subsection (9).
15
Pension disputes
210
Resolution of disputes
For section 50 of the Pensions Act 1995 (c. 26) (resolution of disputes)
substitute—
“50
Requirement for dispute resolution arrangements
20
(1)
The trustees or managers of an occupational pension scheme must
secure that dispute resolution arrangements are made and
implemented.
(2)
Dispute resolution arrangements are such arrangements as are
required by this section for the resolution of pension disputes.
25
(3)
For this purpose a pension dispute is a dispute which—
(a)
is between—
(i)
the trustees or managers of a scheme, and
(ii)
one or more persons with an interest in the scheme (see
section 50A),
30
(b)
is about matters relating to the scheme, and
(c)
is not an exempted dispute (see subsection (9)).
(4)
The dispute resolution arrangements must provide a procedure—
(a)
for any of the parties to the dispute mentioned in subsection
(3)(a)(ii) to make an application for a decision to be taken on the
35
matters in dispute (“an application for the resolution of a
pension dispute”), and
(b)
for the trustees or managers to take that decision.
(5)
Where an application for the resolution of a pension dispute is made in
accordance with the dispute resolution arrangements, the trustees or
40
managers must—
(a)
take the decision required on the matters in dispute within a
reasonable period of the receipt of the application by them, and
(b)
notify the applicant of the decision within a reasonable period
of it having been taken.
45

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
137

(6)
The procedure provided for by the dispute resolution arrangements
must include the provision required by section 50B.
(7)
Dispute resolution arrangements under subsection (1) must, in the case
of existing schemes, have effect on and after the date of commencement
of this section in relation to applications made on or after that date.
5
(8)
This section does not apply in relation to an occupational pension
scheme if—
(a)
every member of the scheme is a trustee of the scheme,
(b)
the scheme has no more than one member, or
(c)
the scheme is of a prescribed description.
10
(9)
For the purposes of this section a dispute is an exempted dispute if—
(a)
proceedings in respect of it have been commenced in any court
or tribunal,
(b)
the Pensions Ombudsman has commenced an investigation in
respect of it as a result of a complaint made or a dispute referred
15
to him, or
(c)
it is of a prescribed description.
(10)
If, in the case of an occupational pension scheme, the dispute resolution
arrangements required by this section to be made—
(a)
have not been made, or
20
(b)
are not being implemented,

section 10 applies to any of the trustees or managers who have failed to
take all reasonable steps to secure that such arrangements are made or
implemented.
50A
Meaning of “person with an interest in the scheme”
25
(1)
For the purposes of section 50 a person is a person with an interest in
an occupational pension scheme if—
(a)
he is a member of the scheme,
(b)
he is a widow, widower or surviving dependant of a deceased
member of the scheme,
30
(c)
he is a surviving non-dependant beneficiary of a deceased
member of the scheme,
(d)
he is a prospective member of the scheme,
(e)
he has ceased to be within any of the categories of persons
referred to in paragraphs (a) to (d), or
35
(f)
he claims to be such a person as is mentioned in paragraphs (a)
to (e) and the dispute relates to whether he is such a person.
(2)
In subsection (1)(c) a “non-dependant beneficiary”, in relation to a
deceased member of an occupational pension scheme, means a person
who, on the death of the member, is entitled to the payment of benefits
40
under the scheme.
(3)
In subsection (1)(d) a “prospective member” means any person who,
under the terms of his contract of service or the rules of the scheme—
(a)
is able, at his own option, to become a member of the scheme,
(b)
will become so able if he continues in the same employment for
45
a sufficiently long period,

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
138

(c)
will be admitted to the scheme automatically unless he makes
an election not to become a member, or
(d)
may be admitted to it subject to the consent of his employer.
50B
The dispute resolution procedure
(1)
The procedure provided for by the dispute resolution arrangements
5
under section 50 must include the following provision.
(2)
The procedure must provide that an application for the resolution of a
pension dispute under section 50(4) may be made or continued on
behalf of a person who is a party to the dispute mentioned in section
50(3)(a)(ii)—
10
(a)
where the person dies, by his personal representative,
(b)
where the person is a minor or is otherwise incapable of acting
for himself, by a member of his family or some other person
suitable to represent him, and
(c)
in any other case, by a representative nominated by him.
15
(3)
The procedure may include provision about the time limits for making
an application for the resolution of a pension dispute but it must
require that—
(a)
in the case of a person with an interest in a scheme as mentioned
in section 50A(1)(e), the time limit for making an application is
20
the end of the period of six months beginning immediately after
the date upon which he ceased to be a person with an interest as
mentioned in section 50A(1)(a), (b), (c) or (d), and
(b)
in the case of a person with an interest in a scheme as mentioned
in section 50A(1)(f) who is claiming to be such a person as is
25
mentioned in section 50A(1)(e), the time limit for making an
application is the end of the period of six months beginning
immediately after the date upon which he claims that he ceased
to be a person with an interest as mentioned in section
50A(1)(a), (b), (c) or (d).
30
(4)
The procedure must include provision about—
(a)
the manner in which an application for the resolution of a
pension dispute is to be made,
(b)
the particulars which must be included in such an application,
and
35
(c)
the manner in which any decisions required are to be reached
and given.
(5)
The procedure must provide that if, after an application for the
resolution of a pension dispute has been made, the dispute becomes an
exempted dispute within the meaning of section 50(9)(a) or (b), the
40
resolution of the dispute under the procedure ceases.”
Pension compensation
211
Amendments relating to the Pensions Compensation Board
(1)
The Pensions Act 1995 (c. 26) is amended as follows.
(2)
In section 80 (review of decisions of the Pensions Compensation Board)—
45