Pensions Bill

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 4 — Fraud compensation
93

149
Board’s powers to make fraud compensation transfer payments
(1)
This section applies where—
(a)
the Board assumes responsibility for a scheme in accordance with
Chapter 3,
(b)
the value of the assets of the scheme was reduced after the relevant date
5
but before the transfer notice (within the meaning of section 122) was
received by the trustees or managers of the scheme and there are
reasonable grounds for believing that the reduction was attributable to
an act or omission constituting an offence prescribed for the purposes
of section 144(1)(b), and
10
(c)
no application was made under section 144 in respect of that reduction
(or any such application was withdrawn before it was determined).
(2)
The Board may transfer an amount from the Fraud Compensation Fund to the
Pension Protection Fund (“fraud compensation transfer payment”) in respect
of the reduction in value, subject to the provisions of this section.
15
(3)
The Board must obtain any recoveries of value, to the extent that they may do
so without disproportionate cost and within a reasonable time.
(4)
No fraud compensation transfer payment may be made until the date
determined by the Board as the date after which further recoveries of value are
unlikely to be obtained without disproportionate cost and within a reasonable
20
time.
(5)
In this section “recovery of value” means any increase in the value of the
Pension Protection Fund, being an increase attributable to any payment
received (otherwise than under this section) by the Board in respect of any act
or omission—
25
(a)
which there are reasonable grounds for believing constituted an offence
prescribed for the purposes of section 144(1)(b), and
(b)
to which any reduction in value falling within subsection (1)(b) above
was attributable.
(6)
It is for the Board to determine whether anything received by it is to be treated
30
as a payment received in respect of any such act or omission.

For this purpose “payment” includes any money or money’s worth.
(7)
The amount of any fraud compensation transfer payment (or, if there is more
than one, the aggregate) must not exceed the difference between—
(a)
the amount of the reduction (or, if more than one, the aggregate amount
35
of the reductions) within subsection (1)(b), and
(b)
the amount of any recoveries of value obtained by the Board before the
date determined by the Board under subsection (4).
(8)
Subject to subsection (7), the Board must determine the amount of any fraud
compensation transfer payment in accordance with regulations made for the
40
purposes of this subsection.
(9)
In this section “the relevant date” has the meaning given by section 144(9).

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 4 — Fraud compensation
94

The fund
150
Fraud Compensation Fund
(1)
The Fraud Compensation Fund shall consist of—
(a)
any property and rights transferred under section 226 (dissolution of
the Pensions Compensation Board) which the Board designates as
5
assets of the Fund,
(b)
contributions levied under section 151 (fraud compensation levy),
(c)
money borrowed by the Board under section 89 for the purposes of this
Chapter, and
(d)
amounts recovered under section 148 (recovery of interim payments).
10
(2)
The Board must credit to the Fraud Compensation Fund any income or capital
gain arising from the assets in the Fund.
(3)
The following are payable out of the Fraud Compensation Fund—
(a)
sums required to meet liabilities transferred to the Board under section
226 (dissolution of the Pensions Compensation Board), which the
15
Board designates as liabilities of the Fund,
(b)
payments under section 147 (fraud compensation payments),
(c)
payments under section 148(1) (interim payments),
(d)
amounts required to be transferred to the Pension Protection Fund
under section 149 (fraud compensation transfer payments),
20
(e)
money required for the repayment of, and the payment of interest on,
money within subsection (1)(c).
(4)
No other amounts are payable out of the Fraud Compensation Fund.
The levy
151
Fraud compensation levy
25
(1)
For the purposes of meeting expenditure payable out of the fraud compensation fund,
regulations may provide for the imposition of a levy (“fraud compensation levy”) in
respect of occupational pension schemes.
(2)
Subsection (1) does not apply in relation to any scheme which is of a description
prescribed under section 144(1)(a) (schemes not eligible for fraud compensation).
30
(3)
A fraud compensation levy imposed in respect of a scheme is payable to the Board by or
on behalf of—
(a)
the trustees or managers of the scheme, or
(b)
any other prescribed person.
(4)
A fraud compensation levy is so payable at prescribed times and at a rate, not exceeding
35
the prescribed rate, determined by the Board.
(5)
In determining the amount of expenditure in respect of which a fraud compensation
levy is to be imposed, the Board may take one year with another (and, in doing so, must
have regard to expenditure estimated to be incurred in current or future periods and to
actual expenditure incurred in previous periods).
40
(6)
Notice of the rates determined by the Board under subsection (4) must be given to
prescribed persons in the prescribed manner.

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 5 — Gathering information
95

(7)
An amount payable by a person on account of a fraud compensation levy is a debt due
from him to the Board.
(8)
An amount so payable may be recovered—
(a)
by the Board, or
(b)
if the Board so determines, by the Regulator on its behalf.
5
(9)
Without prejudice to the generality of subsection (1), (7) or (8), regulations under this
section may include provision relating to—
(a)
the collection and recovery of amounts payable by way of levy under this
section;
(b)
the circumstances in which any such amount may be waived.
10
Chapter 5
Gathering information
152
Information to be provided to the Board
(1)
Regulations may require such persons as may be prescribed to provide to the
Board information of a prescribed description at such times, or in such
15
circumstances, as may be prescribed.
(2)
Regulations under subsection (1) may in particular make provision for
requiring such persons as may be prescribed to provide any information or
evidence needed for a determination of entitlement to compensation under
Chapter 3 of this Part.
20
153
Notices requiring provision of information
(1)
Any person to whom subsection (3) applies may be required by a notice in
writing to produce any document, or provide any other information, which
is—
(a)
of a description specified in the notice, and
25
(b)
relevant to the exercise of the Board’s functions in relation to an
occupational pension scheme.
(2)
A notice under subsection (1) may be given by—
(a)
the Board, or
(b)
a person authorised by the Board for the purposes of this section in
30
relation to the scheme.
(3)
This subsection applies to—
(a)
a trustee or manager of the scheme,
(b)
a professional adviser in relation to the scheme,
(c)
the employer in relation to the scheme,
35
(d)
an insolvency practitioner in relation to the employer, and
(e)
any other person appearing to the Board or person giving the notice to
be a person who holds, or is likely to hold, information relevant to the
discharge of the Board’s functions in relation to the scheme.
(4)
Where the production of a document, or the provision of information, is
40
required by a notice given under subsection (1), the document must be

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 5 — Gathering information
96

produced, or information must be provided, in such a manner, at such a place
and within such a period as may be specified in the notice.
154
Entry of premises
(1)
An appointed person may, for the purpose of enabling or facilitating the
performance of any function of the Board in relation to an occupational
5
pension scheme, at any reasonable time enter scheme premises and, while
there—
(a)
may make such examination and inquiry as may be necessary for such
purpose,
(b)
may require any person on the premises to produce, or secure the
10
production of, any document relevant to that purpose for inspection by
the appointed person,
(c)
may take copies of any such document,
(d)
may take possession of any document appearing to be such a document
or take in relation to any such document any other steps which appear
15
necessary for preserving it or preventing interference with it,
(e)
may, in the case of any such document which consists of information
which is stored in electronic form and is on, or accessible from, the
premises, require the information to be produced in a form—
(i)
in which it can be taken away, and
20
(ii)
in which it is legible or from which it can readily be produced
in a legible form, and
(f)
may, as to any matter relevant to the exercise of the Board’s functions
in relation to the scheme, examine, or require to be examined, either
alone or in the presence of another person, any person on the premises
25
whom he has reasonable cause to believe to be able to give information
relevant to that matter.
(2)
Premises are scheme premises for the purposes of subsection (1) if the
appointed person has reasonable grounds to believe that—
(a)
they are being used for the business of the employer,
30
(b)
an insolvency practitioner in relation to the employer is acting there in
that capacity,
(c)
documents relevant to—
(i)
the administration of the scheme, or
(ii)
the employer,
35

are being kept there, or
(d)
the administration of the scheme, or work connected with the
administration of the scheme, is being carried out there,

unless the premises are a private dwelling-house not used by, or by permission
of, the occupier for the purposes of a trade or business.
40
(3)
An appointed person applying for admission to any premises for the purposes
of this section must, if so required, produce his certificate of appointment.
(4)
When exercising a power under this section an appointed person may be
accompanied by such persons as he considers appropriate.
(5)
Any document of which possession is taken under this section may be retained
45
until the end of the period comprising—

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 5 — Gathering information
97

(a)
the period of 12 months beginning with the date on which possession
was taken of the document, and
(b)
any extension of that period under subsection (6).
(6)
The Board may before the end of the period mentioned in subsection (5)
(including any extension of it under this subsection) extend it by such period
5
not exceeding 12 months as the Board considers appropriate.
(7)
In this section “appointed person” means a person appointed by the Board for
the purposes of this section in relation to the scheme.
155
Penalties relating to sections 153 and 154
(1)
A person who, without reasonable excuse, neglects or refuses to provide
10
information or produce a document when required to do so under section 153
is guilty of an offence.
(2)
A person who without reasonable excuse—
(a)
intentionally delays or obstructs an appointed person exercising any
power under section 154,
15
(b)
neglects or refuses to produce, or secure the production of, any
document when required to do so under that section, or
(c)
neglects or refuses to answer a question or to provide information
when so required,

is guilty of an offence.
20
(3)
In subsection (2)(a) “appointed person” has the same meaning as it has in
section 154.
(4)
A person guilty of an offence under subsection (1) or (2) is liable on summary
conviction to a fine not exceeding level 5 on the standard scale.
(5)
An offence under subsection (1) or (2)(b) or (c) may be charged by reference to
25
any day or longer period of time; and a person may be convicted of a second
or subsequent offence by reference to any period of time following the
preceding conviction of the offence.
(6)
Any person who intentionally and without reasonable excuse alters,
suppresses, conceals or destroys any document which he is or is liable to be
30
required under section 153 or 154 to produce to the Board is guilty of an
offence.
(7)
Any person guilty of an offence under subsection (6) is liable—
(a)
on summary conviction, to a fine not exceeding the statutory
maximum;
35
(b)
on conviction on indictment, to a fine or imprisonment for a term not
exceeding two years, or both.
156
Warrants
(1)
A justice of the peace may issue a warrant under this section if satisfied on
information on oath given by or on behalf of the Board that there are
40
reasonable grounds for believing—
(a)
that there is on, or accessible from, any premises any document—

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 5 — Gathering information
98

(i)
whose production has been required under section 153 or 154,
or any corresponding provision in force in Northern Ireland,
and
(ii)
which has not been produced in compliance with that
requirement,
5
(b)
that there is on, or accessible from, any premises any document
relevant to the exercise of the Board’s functions in relation to an
occupational pension scheme whose production could be so required
and, if its production were so required, the document—
(i)
would not be produced, but
10
(ii)
would be removed, or made inaccessible, from the premises,
hidden, tampered with or destroyed, or
(c)
that a person will do any act which constitutes a misuse or
misappropriation of the assets of an occupational pension scheme and
that there is on, or accessible from, any premises any document—
15
(i)
which relates to whether the act will be done, and
(ii)
whose production could be required under section 153 or 154,
or any corresponding provision in force in Northern Ireland.
(2)
A warrant under this section shall authorise an inspector—
(a)
to enter the premises specified in the information, using such force as is
20
reasonably necessary for the purpose,
(b)
to search the premises and—
(i)
take possession of any document appearing to be such a
document as is mentioned in subsection (1), or
(ii)
take in relation to such a document any other steps which
25
appear necessary for preserving it or preventing interference
with it,
(c)
to take copies of any such document,
(d)
to require any person named in the warrant to provide an explanation
of any such document or to state where it may be found or how access
30
to it may be obtained, and
(e)
in the case of any such document which consists of information which
is stored in electronic form and is on, or accessible from, the premises,
to require the information to be produced in a form—
(i)
in which it can be taken away, and
35
(ii)
in which it is legible or from which it can readily be produced
in a legible form.
(3)
When executing a warrant under this section, an inspector may be
accompanied by such persons as he considers appropriate.
(4)
A warrant under this section continues in force until the end of the period of
40
one month beginning with the day on which it is issued.
(5)
Any document of which possession is taken under this section may be retained
until the end of the period comprising—
(a)
the period of 12 months beginning with the date on which possession
was taken of the document, and
45
(b)
any extension of that period under subsection (6).
(6)
The Board may before the end of the period mentioned in subsection (5)
(including any extension of it under this subsection) extend it by such period
not exceeding 12 months as the Board considers appropriate.

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 5 — Gathering information
99

(7)
In this section “inspector” means a person appointed by the Board as an
inspector.
(8)
In the application of this section in Scotland—
(a)
the reference to a justice of the peace is to be read as a reference to a
justice within the meaning of the Criminal Procedure (Scotland) Act
5
1995 (c. 46), and
(b)
the references in subsections (1) and (2)(a) to information are to be read
as references to evidence.
Provision of false or misleading information
157
Offence of providing false or misleading information to the Board
10
(1)
Any person who knowingly or recklessly provides information which is false
or misleading in a material particular is guilty of an offence if the
information—
(a)
is provided in purported compliance with a requirement under—
(i)
section 152 (information to be provided to the Board),
15
(ii)
section 153 (notices requiring provision of information),
(iii)
section 154 (entry of premises), or
(b)
is provided otherwise than as mentioned in paragraph (a) but in
circumstances in which the person providing the information intends,
or could reasonably be expected to know, that it would be used by the
20
Board for the purposes of exercising its functions under this Act.
(2)
Any person guilty of an offence under subsection (1) is liable—
(a)
on summary conviction, to a fine not exceeding the statutory
maximum;
(b)
on conviction on indictment, to a fine or imprisonment for a term not
25
exceeding two years, or both.
Use of information
158
Use of information
Information held by the Board in the exercise of any of its functions may be
used by the Board for the purposes of, or for any purpose connected with or
30
incidental to, the exercise of its functions.
Disclosure of information
159
Restricted information
(1)
Except as provided by sections 160 to 165 and section 192, restricted
information must not be disclosed—
35
(a)
by the Board, or
(b)
by any person who receives the information directly or indirectly from
the Board,

except with the consent of the person to whom it relates and (if different) the
person from whom the Board obtained it.
40