Pensions Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 1 — The Pensions Regulator
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“stakeholder pension scheme” and “work-based pension scheme” have
the same meaning as in section 5 (Regulator’s objectives).
New regulatory powers of the Regulator
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Improvement notices
(1)
If the Regulator is of the opinion that a person—
5
(a)
is contravening one or more provisions of the pensions legislation, or
(b)
has contravened one or more of those provisions in circumstances that
make it likely that the contravention will continue or be repeated,

it may issue a notice (an “improvement notice”) to that person directing him to
take such steps as are specified in the notice to remedy or prevent a recurrence
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of the contravention.
(2)
An improvement notice must—
(a)
state that the Regulator is of that opinion and specify the provision or
provisions of the pensions legislation in question,
(b)
contain a statement of the matters which it is asserted constitute the
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contravention and of the evidence on which that opinion is based, and
(c)
in respect of each step specified in the notice, state the period (being a
period of not less than 21 days beginning with the date of the notice)
within which it must be complied with.
(3)
Directions in an improvement notice—
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(a)
may be framed to any extent by reference to a code of practice issued
by the Regulator under section 64, and
(b)
may be framed so as to afford the person in respect of whom the notice
is given a choice between different ways of remedying or preventing
the recurrence of the contravention.
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(4)
Directions in an improvement notice may be expressed to be conditional on
compliance by a third party with a specified direction, or specified directions,
contained in a notice under section 15 (third party notices).
(5)
An improvement notice may direct the person in respect of whom it is issued
to inform the Regulator, within such period as may be specified in the notice,
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of the steps that he has taken, or is taking, in pursuance of the notice.
(6)
Where a contravention of a provision of the pensions legislation consists of a
failure to take action within a time limit, for the purposes of this section the
contravention continues until such time as the action is taken.
(7)
In this section “pensions legislation” means any enactment contained in or
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made by virtue of—
(a)
the Pension Schemes Act 1993 (c. 48),
(b)
Part 1 of the Pensions Act 1995 (c. 26), other than sections 62 to 66A of
that Act (equal treatment),
(c)
Part 1 of the Welfare Reform and Pensions Act 1999 (c. 30), or
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(d)
this Act.
(8)
If the trustees or managers of an occupational or personal pension scheme fail
to comply with an improvement notice issued to them, section 10 of the
Pensions Act 1995 (civil penalties) applies to any trustee or manager who has
failed to take all reasonable steps to secure such compliance.
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Pensions Bill
Part 1 — The Pensions Regulator
9

(9)
That section also applies to any other person who, without reasonable excuse,
fails to comply with an improvement notice issued to him.
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Third party notices
(1)
Where the Regulator is of the opinion that—
(a)
a person—
5
(i)
is contravening one or more provisions of the pensions
legislation, or
(ii)
has contravened one or more of those provisions in
circumstances that make it likely that the contravention will
continue or be repeated,
10
(b)
the contravention is or was, wholly or partly, a result of a failure of
another person (“the third party”) to do any thing, and
(c)
that failure is not itself a contravention of the pensions legislation,

the Regulator may issue a notice (a “third party notice”) directing the third
party to take such steps as are specified in the notice to remedy or prevent a
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recurrence of his failure.
(2)
A third party notice must—
(a)
state that the Regulator is of that opinion and specify the provision or
provisions of the pensions legislation in question,
(b)
contain a statement of—
20
(i)
the matters which it is asserted constitute the contravention of
the provision or provisions, and
(ii)
the matters which it is asserted constitute the failure by the third
party,

and the evidence on which that opinion is based, and
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(c)
in respect of each step specified in the notice, state the period (being a
period of not less than 21 days beginning with the date of the notice)
within which it must be complied with.
(3)
Directions in a third party notice may be framed so as to afford the third party
a choice between different ways of remedying or preventing the recurrence of
30
his failure.
(4)
A third party notice may direct the third party to inform the Regulator, within
such period as may be specified in the notice, of the steps that he has taken, or
is taking, in pursuance of the notice.
(5)
Where a contravention of a provision of the pensions legislation consists of a
35
failure to do any thing within a time limit, for the purposes of this section the
contravention continues until such time as the action is taken.
(6)
Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to a person
who, without reasonable excuse, fails to comply with a third party notice
issued to him.
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(7)
No duty to which a person is subject is to be regarded as contravened merely
because of anything required to be done in compliance with a third party
notice.

This is subject to section 234 (protected items).
(8)
In this section “pensions legislation” has the same meaning as in section 14.
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Pensions Bill
Part 1 — The Pensions Regulator
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Injunctions and interdicts
(1)
If, on the application of the Regulator, the court is satisfied that—
(a)
there is a reasonable likelihood that a particular person will do any act
which constitutes a misuse or misappropriation of any of the assets of
an occupational or personal pension scheme, or
5
(b)
that a particular person has done any such act and that there is a
reasonable likelihood that he will continue or repeat the act in question
or do a similar act,

the court may grant an injunction restraining him from doing so or, in
Scotland, an interdict prohibiting him from doing so.
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(2)
The jurisdiction conferred by this section is exercisable by the High Court or
the Court of Session.
17
Restitution
(1)
If, on the application of the Regulator, the court is satisfied that there has been
a misuse or misappropriation of any of the assets of an occupational or
15
personal pension scheme, it may order any person involved to take such steps
as the court may direct for restoring the parties to the position in which they
were before the misuse or misappropriation occurred.
(2)
For this purpose a person is “involved” if he appears to the court to have been
knowingly concerned in the misuse or misappropriation of the assets.
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(3)
The jurisdiction conferred by this section is exercisable by the High Court or
the Court of Session.
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Power of the Regulator to recover unpaid contributions
(1)
Where any employer contribution payable towards an occupational or
personal pension scheme is not paid on or before its due date, the Regulator
25
may, on behalf of the trustees or managers of the scheme, exercise such powers
as the trustees or managers have to recover that contribution.
(2)
For the purposes of subsection (1), any employer contribution payable towards
a personal pension scheme which is not paid on or before its due date is, if not
a debt due from the employer to the trustees or managers apart from this
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subsection, to be treated as if it were such a debt.
(3)
In this section—

“due date”—
(a)
in relation to employer contributions payable towards an
occupational pension scheme in accordance with a schedule of
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contributions under section 184, has the same meaning as in
section 185,
(b)
in relation to employer contributions payable in accordance
with a payment schedule under section 87 of the Pensions Act
1995 (c. 26) (schedules of payments to money purchase
40
schemes), has the meaning given in subsection (2)(c) of that
section, and
(c)
in relation to contributions within subsection (2) above, has the
same meaning as in section 111A of the Pension Schemes Act
1993 (c. 48) (monitoring of employer payments to personal
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pension schemes);

Pensions Bill
Part 1 — The Pensions Regulator
11


“employer contribution”—
(a)
in relation to an occupational pension scheme, means any
contribution payable by or on behalf of the employer towards
the scheme in accordance with a schedule of contributions
under section 184 of this Act or a payment schedule under
5
section 87 of the Pensions Act 1995 (c. 26) (schedules of
payments to money purchase schemes) whether—
(i)
on the employer’s own account (but in respect of one or
more employees), or
(ii)
on behalf of an employee out of deductions from the
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employee’s earnings, and
(b)
in relation to a personal pension scheme, means any
contribution payable towards the scheme under direct payment
arrangements.
Powers in relation to winding up of occupational pension schemes
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19
Powers to wind up occupational pension schemes
In section 11 of the Pensions Act 1995 (powers to wind up occupational pension
schemes)—
(a)
omit subsection (3),
(b)
before subsection (4) insert—
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“(3A)
The Authority may, during an assessment period (within the
meaning of section 104 of the Pensions Act 2004 (Board of the
Pension Protection Fund)) in relation to an occupational
pension scheme, by order direct the scheme to be wound up if
they are satisfied that it is necessary to do so in order—
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(a)
to ensure that the scheme’s protected liabilities do not
exceed its assets, or
(b)
if those liabilities do exceed its assets, to keep the excess
to a minimum.
(3B)
In subsection (3A)—
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(a)
“protected liabilities” has the meaning given in section
103 of the Pensions Act 2004, and
(b)
references to the assets of the scheme are references to
those assets excluding any assets representing the value
of any rights in respect of money purchase benefits
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(within the meaning of that Act) under the scheme.”,
(c)
at the end of subsection (4) insert—

“This subsection is subject to sections 24 and 107, of the
Pensions Act 2004 (winding up order made when freezing
order has effect in relation to scheme or during assessment
40
period under Part 2 of that Act).”, and
(d)
after subsection (6) insert—
“(6A)
Subsection (6) does not have effect to authorise the Authority to
make an order as mentioned in paragraph (a) or (b) of that
subsection, if their doing so would be unlawful as a result of
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section 6(1) of the Human Rights Act 1998 (unlawful for public
authority to act in contravention of a Convention right).”