Pensions Bill

House of Commons

Session 2003 - 04
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Pensions Bill

Pensions Bill
Schedule 10 — Deferral of retirement pensions and shared additional pensions
Part 1 — Principal amendments of Social Security Contributions and Benefits Act 1992
225

(b)
the person has made an election under paragraph 1(1)(a) in
relation to the period of deferment.
      (2)
The rate of the person’s shared additional pension shall be
increased by an amount equal to the aggregate of the increments
to which he is entitled under paragraph 3, but only if that amount
5
is enough to increase the rate of the pension by at least 1 per cent.
Calculation of increment
3     (1)
A person is entitled to an increment under this paragraph for each
complete incremental period in his period of deferment.
      (2)
The amount of the increment for an incremental period shall be 1/
10
5th per cent. of the weekly rate of the shared additional pension to
which the person would have been entitled for the period if his
entitlement had not been deferred.
      (3)
Amounts under sub-paragraph (2) shall be rounded to the nearest
penny, taking any 1/2p as nearest to the next whole penny.
15
      (4)
Where an amount under sub-paragraph (2) would, apart from this
sub-paragraph, be a sum less than 1/2p, the amount shall be taken
to be zero, notwithstanding any other provision of this Act, the
Pensions Act 1995 or the Administration Act.
      (5)
In this paragraph “incremental period” means any period of six
20
days which are treated by regulations as days of increment for the
purposes of this paragraph in relation to the person and pension
in question.
      (6)
Where one or more orders have come into force under section 150
of the Administration Act during the period of deferment, the rate
25
for any incremental period shall be determined as if the order or
orders had come into force before the beginning of the period of
deferment.
      (7)
The sums which are the increases in the rates of shared additional
pension under this section are subject to alteration by order made
30
by the Secretary of State under section 150 of the Administration
Act.
Lump sum where entitlement to shared additional pension is deferred
4     (1)
This paragraph applies where—
(a)
a person’s entitlement to a shared additional pension is
35
deferred, and
(b)
the person has made (or is treated as having made) an
election under paragraph 1(1)(b) in relation to the period of
deferment.
      (2)
The person is entitled to an amount calculated in accordance with
40
paragraph 5 (a “lump sum”).
Calculation of lump sum
5     (1)
The lump sum is the accrued amount for the last accrual period
beginning during the period of deferment.
      (2)
In this paragraph—
45

Pensions Bill
Schedule 10 — Deferral of retirement pensions and shared additional pensions
Part 2 — Consequential amendments
226

‘accrued amount’ means the amount calculated in
accordance with sub-paragraph (3);
‘accrual period’ means any period of seven days beginning
with a prescribed day of the week, where that day falls
within the period of deferment.
5
      (3)
The accrued amount for an accrual period for a person is—

where—
A is the accrued amount for the previous accrual period (or,
in the case of the first accrual period beginning during the
period of deferment, zero);
10
P is the amount of the shared additional pension to which
the person would have been entitled for the accrual
period if his entitlement had not been deferred;
R is the percentage rate prescribed for the purposes of
paragraphs 3A and 7B of Schedule 5.
15
      (4)
For the purpose of the calculation of the lump sum, the amount of
the shared additional pension to which the person would have
been entitled for an accrual period does not include, in prescribed
circumstances, such amount as may be prescribed.
      (5)
The lump sum must be rounded to the nearest penny, taking any
20
1/2p as nearest to the next whole penny.”
Part 2
Consequential amendments
Social Security Contributions and Benefits Act 1992 (c. 4)
16
The Social Security Contributions and Benefits Act 1992 is amended as
25
follows.
17
In section 62(1) (graduated retirement benefit)—
(a)
in paragraph (a), for “paragraphs 1 to 3” substitute “paragraphs A1
to 3B and 7C”, and
(b)
after paragraph (b) insert—
30
“(c)
for amending that section in order to make provisions
corresponding to those of paragraphs 3C, 4(1) and
(1A) and 7A to 7C of Schedule 5 to this Act enabling a
widowed person to elect to receive a lump sum,
rather than an increase in the weekly rate of
35
retirement pension, in respect of the graduated
retirement benefit of his or her deceased spouse.”
18
In section 122(1) (interpretation of Parts 1 to 6) for the definitions of
“deferred” and “period of deferment” substitute—

“ “deferred” and “period of deferment”—
40
(a)
in relation to a Category A or Category B retirement pension,
have the meanings given by section 55(3), and
(b)
in relation to a shared additional pension, have the meanings
given by section 55C(3);”.

Pensions Bill
Schedule 10 — Deferral of retirement pensions and shared additional pensions
Part 3 — Transitional provisions
227

19
In section 176 (parliamentary control of subordinate legislation) in
subsection (1) (affirmative procedure), after paragraph (b) insert—
“(bb)
regulations prescribing a percentage rate for the purposes
of—
(i)
paragraph 3B(3) or 7B(3)of Schedule 5, or
5
(ii)
paragraph 5(3) of Schedule 5A;”.
Social Security Administration Act 1992 (c. 5)
20
The Social Security Administration Act 1992 is amended as follows.
21
In section 150 (annual up-rating of benefits)—
(a)
in subsection (1), after paragraph (d) insert—
10
“(dza)
which are lump sums to which surviving spouses will
become entitled under paragraph 7A of that Schedule
on becoming entitled to a Category A or Category B
retirement pension;”,
(b)
in subsection (1)(da), for “section 55C of” substitute “paragraph 2 of
15
Schedule 5A to”, and
(c)
in subsection (3)(b), after “(d),” insert “(dza)”.
22
In section 151 (up-rating—supplementary) in subsection (2)—
(a)
for “subsection (1)(d) or (e)” substitute “subsection (1)(d), (dza) or
(e)”, and
20
(b)
after “apart from the order and” insert “, in the case of the sums
mentioned in subsection (1)(d) or (e) of that section,”.
Welfare Reform and Pensions Act 1999 (c. 30)
23
The Welfare Reform and Pensions Act 1999 is amended as follows.
24
In section 50, omit subsection (2) (which amends provisions relating to the
25
deferment of shared additional pensions and is superseded by Part 1 of this
Schedule).
25
In section 52(2) (power to make regulations preserving rights in respect of
additional pensions), in paragraph (b)—
(a)
after “increase of pension” insert “or payment of lump sum”, and
30
(b)
after “constituent element of an increase” insert “or of a lump sum”.
Part 3
Transitional provisions
Widowers’ entitlement to increase of pension or widowed person’s lump sum
26
In the case of a widower who attains pensionable age before 6th April 2010,
35
paragraphs 3C, 4 and 7A of Schedule 5 to the Social Security Contributions
and Benefits Act 1992 (c. 4) (entitlement to increase of pension or widowed
person’s lump sum) shall not apply unless he was over pensionable age
when his wife died.

Pensions Bill
Schedule 11 — Minor and consequential amendments
228

Transitional provision
27    (1)
The Secretary of State may by regulations make such transitional provision
as he thinks fit in connection with the coming into force of this Schedule.
      (2)
Regulations under this paragraph may, in particular, modify the preceding
provisions of this Schedule in relation to cases where the retirement pension
5
or shared additional pension of a person is deferred and the period of
deferment begins before 6th April 2005 and continues on or after that day.
      (3)
In this paragraph “deferred” and “period of deferment” are to be read in
accordance with section 55 or 55C of the Social Security Contributions and
Benefits Act 1992 (c. 4), as the case requires.
10
Schedule 11
Section 242

Minor and consequential amendments
Superannuation Act 1972 (c.11)
1     (1)
Schedule 1 to the Superannuation Act 1972 (kinds of employment in relation
to which pension schemes may be made) is amended as follows.
15
      (2)
At the appropriate place in the list of “Other Bodies” insert—

“The Board of the Pension Protection Fund.”, and

“The Pensions Regulator.”
      (3)
At the appropriate place in the list of “Offices” insert—

“Chairman of the Board of the Pension Protection Fund.”,
20
and

“Chairman of the Pensions Regulator.”
Social Security Administration Act 1992 (c. 5)
2
In section 122AA of the Social Security Administration Act 1992 (disclosure
of contributions etc information by Inland Revenue), in subsection (2)(d), for
25
“Occupational Pensions Regulatory Authority” substitute “Pensions
Regulator”.
Tribunals and Inquiries Act 1992 (c. 53)
3
In Schedule 1 to the Tribunals and Inquiries Act 1992 (tribunals under
general supervision of the Council on Tribunals), in Part 1, in paragraph 35,
30
after paragraph (h) insert—

“(i) the Pensions Regulator

established by section 1 of the

Pensions Act 2004.

(j) the Pensions Regulator

35

Tribunal established by section 76

of that Act.

Pensions Bill
Schedule 11 — Minor and consequential amendments
229

(k) the Ombudsman for the Board

of the Pension Protection Fund in

respect of his functions under

section 173 of that Act.”

Pension Schemes Act 1993 (c.48)
5
4
The Pension Schemes Act 1993 is amended as follows.
5
In section 111A (monitoring of employers’ payments to personal pension
schemes) omit subsection (10).
6
In section 175 (levies)—
(a)
for subsection (8) substitute—
10
“(8)
An amount payable by a person on account of a levy imposed
under this section shall be a debt due from him to the
Secretary of State, and an amount so payable shall be
recoverable by the Secretary of State accordingly or, if the
Secretary of State so determines, by the Regulatory Authority
15
on his behalf.”, and
(b)
in subsection (9) for “subsections (1) and (4)” substitute “subsection
(1)”.
Pensions Act 1995 (c.26)
7
The Pensions Act 1995 is amended as follows.
20
8
In section 7 (appointment of trustees), in subsection (1) omit “a trustee of
such a scheme ceases to be a trustee”.
9
In section 10 (civil penalties), in subsection (5)(a) omit “as a trustee of a trust
scheme”.
10
In section 15(4) (failure to comply with Authority’s direction) for “sections 3
25
and 10 apply” substitute “section 10 applies”.
11
In section 28 (consequences of prohibition on trustee being auditor of
scheme etc) omit subsection (4).
12
In section 30 (persons disqualified: consequences) omit subsections (7) and
(8).
30
13
Omit section 30A (accessibility of register of disqualified trustees).
14
In section 31 (trustees not to be indemnified for fines or civil penalties), in
subsection (3) for “sections 3 and 10 apply” substitute “section 10 applies”.
15
In section 32 (decisions of trustees by a majority)—
(a)
in subsection (4) for “, 16(3)(b) and 25(2)” substitute “and 25(2) of this
35
Act and section 196(6) of the Pensions Act 2004”, and
(b)
in subsection (5) for “sections 3 and 10 apply” substitute “section 10
applies”.
16
In section 36 (choosing investments), in subsection (8) for “sections 3 and 10
apply” substitute “section 10 applies”.
40

Pensions Bill
Schedule 11 — Minor and consequential amendments
230

17
In section 37 (payment of surplus to employer), in subsection (8) for
“sections 3 and 10 apply” substitute “section 10 applies”.
18
In section 38 (power to defer winding up), in subsection (2)—
(a)
in paragraph (a) after “scheme” insert “(other than those due to be
paid before the determination is made)”, and
5
(b)
in paragraph (b) omit “new”.
19
In section 40 (restriction on employer-related investments), in subsection (4)
for “sections 3 and 10 apply” substitute “section 10 applies”.
20
In section 41 (provision of documents for members)—
(a)
for subsection (3) substitute—
10
“(3)
The documents referred to in subsection (1)(b) are—
(a)
any statement of funding principles prepared or
revised under section 180 of the Pensions Act 2004,
(b)
any valuation or report prepared by the actuary
under section 181 of that Act,
15
(c)
any certificate given by the actuary under section 182
or 184 of that Act.”, and
(b)
in subsection (5B) for “sections 3 and 10 apply to any trustee, and
section 10 applies” substitute “section 10 applies to any trustee, and”.
21
In section 47 (professional advisers), in subsections (3), (8) and (11) for
20
“sections 3 and 10 apply to any trustee, and section 10 applies” substitute
“section 10 applies to any trustee, and”.
22
In section 49 (other responsibilities of trustees, employers, etc)—
(a)
in subsection (6) for “sections 3 and 10 apply” substitute “section 10
applies”, and
25
(b)
in subsection (10)—
(i)
omit paragraph (a) and the word “and” immediately after it,
and
(ii)
in paragraph (b) for “such steps” substitute “reasonable steps
to secure compliance”.
30
23
In section 49A (record of winding up decisions) omit subsection (4).
24
In section 68 (power of trustees to modify schemes by resolution), in
subsection (2)—
(a)
in paragraph (b), for “section 16(1) or 17(2)” substitute “section 196 of
the Pensions Act 2004”, and
35
(b)
for paragraph (c) substitute—
“(c)
to enable the scheme to comply with such terms and
conditions as may be imposed by the Board of the
Pension Protection Fund in relation to any payment
made by them under section 147 or 148 of the
40
Pensions Act 2004,”.
25
In section 72A (reports to Authority about winding up) omit subsection
(9)(a) and “and” immediately after it.
26
In section 72C (duty to comply with directions for facilitating winding up)
omit subsection (2).
45

Pensions Bill
Schedule 11 — Minor and consequential amendments
231

27
In section 73 (preferential liabilities on winding up)—
(a)
in subsection (1), for “section 56” substitute “this section”,
(b)
after that subsection insert—
“(1A)
This section applies to an occupational pension scheme other
than—
5
(a)
a money purchase scheme, or
(b)
a prescribed scheme or scheme of a prescribed
description.”,
(c)
in subsection (6), omit paragraph (a) and “and” immediately after it,
and
10
(d)
in subsection (9) for “section 56” substitute “this section”.
28
In section 74 (discharge of liabilities by insurance, etc)—
(a)
in subsection (1) for “section 56” substitute “this section”, and
(b)
after that subsection insert—
“(1A)
This section applies to an occupational pension scheme other
15
than—
(a)
a money purchase scheme, or
(b)
a prescribed scheme or scheme of a prescribed
description.”
29
In section 76 (excess assets on winding up), in subsection (6) for “sections 3
20
and 10 apply” substitute “section 10 applies”.
30
In section 77 (excess assets remaining after winding up: power to distribute),
in subsection (5) for “sections 3 and 10 apply” substitute “section 10 applies”.
31
In section 87 (schedules of payment to money purchase schemes) omit
subsection (5)(a) and “and” immediately after it.
25
32
In section 88 (provision supplementary to section 87) omit subsection (4)(a)
and “and” immediately after it.
33
In section 89 (application of further provisions to money purchase schemes,
in subsection (1)(a)—
(a)
for “sections 56 to 60” substitute “Part 3 of the Pensions Act 2004”,
30
and
(b)
for “those sections” substitute “that Part”.
34
In section 124(3A) (when the winding up of a scheme begins) after “(3E)”
insert “and to sections 24, 107 and 119 of the Pensions Act 2004”.
Welfare Reform and Pensions Act 1999 (c.30)
35
35
The Welfare Reform and Pensions Act 1999 is amended as follows.
36
In section 1 (stakeholder pension schemes), in subsection (6), after “members
etc)” insert “and of regulations under section 194 of the Pensions Act 2004
(combined pension forecasts)”.
37
In section 2 (registration of stakeholder pension schemes)—
40
(a)
in subsection (1) for “Occupational Pensions Regulatory Authority
(“the Authority”)” substitute “Authority”, and