Amendments proposed to the Pensions Bill - continued House of Commons

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Section [Contribution notices where avoidance of employer debt] contribution notice: relationship with employer debt

   

Malcolm Wicks

NC42

To move the following Clause:—

    '(1)   This section applies where a contribution notice is issued to a person under section [Contribution notices where avoidance of employer debt] and condition A or B is met.

    (2)   Condition A is met if, at the time at which the contribution notice is issued, there is a debt due under section 75 of the Pensions Act 1995 (c.26) ("the 1995 Act") (deficiencies in the scheme assets) from the employer—

      (a) to the trustees or managers of the scheme, or

      (b) where the Board of the Pension Protection Fund has assumed responsibility for the scheme under Chapter 3 of Part 2 (pension protection), to the Board.

    (3)   Condition B is met if, after the contribution notice is issued but before the whole of the debt due by virtue of the notice is recovered, a debt becomes due from the employer to the trustees or managers of the scheme under section 75 of the 1995 Act.

    (4)   The Regulator may issue a direction to the trustees or managers of the scheme not to take any or any further steps to recover the debt due to them under section 75 of the 1995 Act pending the recovery of all or a specified part of the debt due to them by virtue of the contribution notice.

    (5)   If the trustees or managers fail to comply with a direction issued to them under subsection (4), section 10 of the 1995 Act (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

    (6)   Any sums paid—

      (a) to the trustees or managers of the scheme in respect of any debt due to them by virtue of the contribution notice, or

      (b) to the Board in respect of any debt due to it by virtue of the contribution notice,

    are to be treated as reducing the amount of the debt due to the trustees or managers or, as the case may be, to the Board under section 75 of the 1995 Act.

    (7)   For the purposes of this section—

      (a) references to a debt due under section 75 of the 1995 Act include a contingent debt under that section, and

      (b) references to the amount of such a debt include the amount of such a contingent debt.'.

Financial support directions

   

Malcolm Wicks

NC44

To move the following Clause:—

    '(1)   This section applies in relation to an occupational pension scheme other than—

      (a) a money purchase scheme, or

      (b) a prescribed scheme or a scheme of a prescribed description.

    (2)   The Regulator may issue a financial support direction under this section in relation to such a scheme if the Regulator is of the opinion that the employer in relation to the scheme—

      (a) is a service company, or

      (b) is insufficiently resourced,

    at a time determined by the Regulator which falls within subsection (7) ("the relevant time").

    (3)   A financial support direction in relation to a scheme is a direction which requires the person or persons to whom it is issued to secure—

      (a) that financial support for the scheme is put in place within the period specified in the direction,

      (b) that thereafter that financial support or other financial support remains in place while the scheme is in existence, and

      (c) that the Regulator is notified in writing of prescribed events in respect of the financial support as soon as reasonably practicable after the event occurs.

    (4)   A financial support direction in relation to a scheme may be issued to such one or more of the persons falling within subsection (5) as the Regulator considers appropriate.

    (5)   A person falls within this subsection if the person—

      (a) is the employer in relation to the scheme at the relevant time, or

      (b) is, at the relevant time, connected with or an associate of the employer.

    (6)   A financial support direction must identify all the persons to whom the direction is issued.

    (7)   A time falls within this subsection if it is a time which falls within a prescribed period which ends with the determination by the Regulator to exercise the power to issue the financial support direction in question.

    (8)   For the purposes of subsection (3), a scheme is in existence until it is wound up.

    (9)   No duty to which a person is subject is to be regarded as contravened merely because of any information or opinion contained in a notice given by virtue of subsection (3)(c).

    This is subject to section 234 (protected items).'.


Meaning of "service company" and "insufficiently resourced"

   

Malcolm Wicks

NC45

To move the following Clause:—

    '(1)   This section applies for the purposes of section [Financial support directions] (financial support directions).

    (2)   A company ("C") is a "service company" at the relevant time if C's turnover, as shown in the latest available accounts for C prepared in accordance with section 226 of the Companies Act 1985 (c.6), is solely or principally derived from amounts charged for the provision of the services of employees of C to other companies who are members of the same group of companies as C.

    (3)   The employer in relation to a scheme is insufficiently resourced at the relevant time if—

      (a) at that time the employer has insufficient net assets to enable it to meet a prescribed percentage of the estimated section 75 debt in relation to the scheme, and

      (b) there is at that time a person who is connected with, or an associate of, the employer and who has sufficient net assets to meet that percentage of that debt.

    (4)   For the purposes of subsection (3) a person's net assets are to be determined, calculated and verified in a prescribed manner.

    (5)   In this section the "estimated section 75 debt", in relation to a scheme, means the amount which the Regulator estimates to be the amount of the debt which would become due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (c.26) (deficiencies in the scheme assets) if—

      (a) subsection (2) of that section applied, and

      (b) the time designated by the trustees or managers of the scheme for the purposes of that subsection were the relevant time.

    (6)   When calculating the estimated section 75 debt in relation to a scheme under subsection (5), the amount of any debt due at the relevant time from the employer under section 75 of the Pensions Act 1995 (c.26) is to be disregarded.

    (7)   In this section "the relevant time" has the same meaning as in section [Financial support directions].'.


Meaning of "financial support"

   

Malcolm Wicks

NC46

To move the following Clause:—

    '(1)   For the purposes of section [Financial support directions] (financial support directions), "financial support" for a scheme means one or more of the arrangements falling within subsection (2) the details of which are approved in a notice issued by the Regulator.

    (2)   The arrangements falling within this subsection are—

      (a) an arrangement whereby, at any time when the employer is a member of a group of companies, all the companies who are members of the group are jointly and severally liable for the employer's pension liabilities in relation to the scheme;

      (b) an arrangement whereby, at any time when the employer is a member of a group of companies, a company which meets prescribed requirements and is the holding company of the group is liable for the employer's pension liabilities in relation to the scheme;

      (c) an arrangement which meets prescribed requirements and whereby additional financial resources are provided to the scheme;

      (d) such other arrangements as may be prescribed.

    (3)   In subsection (2), "the employer's pension liabilities" in relation to a scheme means—

      (a) the liabilities for any amounts payable by or on behalf of the employer towards the scheme (whether on his own account or otherwise) in accordance with a schedule of contributions under section 184, and

      (b) the liabilities for any debt which is or may become due to the trustees or managers of the scheme from the employer whether by virtue of section 75 of the Pensions Act 1995 (c.26) (deficiencies in the scheme assets) or otherwise.'.


Contribution notices where non-compliance with financial support direction

   

Malcolm Wicks

NC47

To move the following Clause:—

    '(1)   This section applies where there is non-compliance with a financial support direction issued in relation to a scheme under section [Financial support directions].

    (2)   The Regulator may issue a notice to any one or more of the persons to whom the direction was issued stating that the person is under a liability to pay to the trustees or managers of the scheme the sum specified in the notice (a "contribution notice").

    (3)   The Regulator may issue a contribution notice to a person only if the Regulator is of the opinion that it is reasonable to impose liability on the person to pay the sum specified in the notice.

    (4)   The Regulator, when deciding for the purposes of subsection (3) whether it is reasonable to impose liability on a particular person to pay the sum specified in the notice, must have regard to such matters as the Regulator considers relevant including, where relevant, the following matters—

      (a) whether the person has taken reasonable steps to secure compliance with the financial support direction,

      (b) the relationship which the person has or has had with the employer (including, where the employer is a company, whether the person has or has had control of the employer),

      (c) the relationship which the person has or has had with the parties to any arrangements put in place in accordance with the direction (including, where any of those parties is a company, whether the person has or has had control of that company),

      (d) any connection or involvement which the person has or has had with the scheme,

      (e) the financial circumstances of the person, and

      (f) such other matters as may be prescribed.

    (5)   Subsection (10) of section 435 of the Insolvency Act 1986 (c.45) (meaning of control) applies for the purposes of subsection (4) as it applies for the purposes of that section.

    (6)   A contribution notice may not be issued under this section in respect of non-compliance with a financial support direction in relation to a scheme where the Board of the Pension Protection Fund has assumed responsibility for the scheme under Chapter 3 of Part 2 (pension protection).'.



 
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