Amendments proposed to the Finance Bill - continued House of Commons

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Mr Oliver Letwin
Mr Howard Flight [R]
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne

384

Schedule     34,     page     470,     line     20,     at end insert 'in a prescribed manner'.

   

Mr Paul Boateng

571

Schedule     34,     page     470,     line     36,     at end insert—

    '(8) This sub-paragraph applies in relation to sums or assets held for the purposes of, or representing accrued rights under, the arrangement if—

            (a)   they are transferred so as to become held for the purposes of a money purchase arrangement that is not a cash balance arrangement, or two or more more money purchase arrangements that are not cash balance arrangements, under a registered pension scheme or recognised overseas pension scheme, or

            (b)   where the transfer occurs in connection with the winding up of the pension scheme under which the arrangement is made and the arrangement is a cash balance arrangement or a defined benefits arrangement, they are transferred so as to become held for the purposes of, or to represent rights under, a cash balance arrangement or defined benefits arrangement relating to the same employment as the arrangement and made under a registered pension scheme or recognised overseas pension scheme.

    (9) Where there is a permitted transfer—

            (a)   if the transfer is a permitted transfer by virtue of sub-paragraph (8)(a), this paragraph (and paragraphs 13 and 13A) apply in relation to the arrangement, or each of the arrangements, to which the transfer is made, and

            (b)   if the transfer is a permitted transfer by virtue of sub-paragraph (8)(b), this paragraph (and paragraphs 13 and 13B) apply as if the arrangement to which the transfer is made were the same as that from which it is made.'.

   

Mr Paul Boateng

572

Schedule     34,     page     470,     line     38,     leave out from 'arrangement' to 'a' in line 8 on page 471 and insert—

            (a)   in the case of a money purchase arrangement that is not a cash balance arrangement, if a relevant contribution is paid under the arrangement (see paragraph 13A), and

            (b)   in the case of a cash balance arrangement or defined benefits arrangement, if, when a benefit crystallisation event or transfer that is a permitted transfer by virtue of paragraph 12(8)(a) (a "relevant event") occurs in relation to the individual and the arrangement, the relevant crystallised amount exceeds the appropriate limit (see paragraph 13B).

     13A For the purposes of paragraph 13(1)(a)'.

   

Mr Oliver Letwin
Mr Howard Flight [R]
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne

385

Schedule     34,     page     471,     line     5,     leave out 'retail prices index' and insert 'national average earnings'.

   

Mr Paul Boateng

511

Schedule     34,     page     471,     line     18,     leave out 'sub-paragraph (1)(b)' and insert 'paragraph 13(1)(a)'.

   

Mr Paul Boateng

573

Schedule     34,     page     471,     line     26,     leave out from beginning to end of line 11 on page 472 and insert—

    '13B (1) For the purposes of paragraph 13(1)(b) "the relevant crystallised amount" is—

            (a)   if the relevant event is the first relevant event occurring in relation to the individual and to the arrangement or any other cash balance arrangement or defined benefits arrangement related to the arrangement ("the first relevant event"), the amount crystallised by that event, and

            (b)   otherwise, the aggregate of the amount crystallised by the relevant event and the amount crystallised by the relevant event, or by each of the relevant events, which has or have previously occurred in relation to the individual and to the arrangement or any other cash balance arrangement or defined benefits arrangement related to the arrangement.

    (2) If the relevant event is a permitted transfer which is not a benefit crystallisation event, sub-paragraph (1) applies as if the amount crystallised by the event were the aggregate of—

            (a)   the amount of any sums held for the purposes of, or representing accrued rights under, the arrangement, and

            (b)   the market value of any assets held for the purposes of, or representing accrued rights under, the arrangement.

    (3) For the purposes of this paragraph (and paragraph 15) another arrangement is related to the arrangement if—

            (a)   the other arrangement relates to the individual, and

            (b)   both the arrangement and the other arrangement relate to the same employment;

    and whether an arrangement relates to an employment is to be determined in accordance with paragraph 9(6).

    (4) For the purposes of paragraph 13(1)(b) "the appropriate limit", in relation to a relevant event, is the greater of—

            (a)   the value of the individual's rights on 5th April 2006 under the arrangement, or (where there is or are one or more other cash balance arrangements or defined benefits arrangements related to the arrangement) the aggregate of the value of the individual's rights under the arrangement and the other arrangement or arrangements, arrived at in accordance with paragraphs 8 and 9, as increased by the relevant indexation percentage (see sub-paragraph (5)), and

            (b)   what would be the value of those rights, so arrived at, on the assumptions specified in sub-paragraph (6).

    (5) For the purposes of sub-paragraph (4)(a) "the relevant indexation percentage", in relation to a relevant event, means whichever is the greatest of—

            (a)   the percentage by which an amount would be increased if it were increased for the period beginning with 6th April 2006 and ending with the date on which the relevant event occurs at an annual rate of 5%,

            (b)   the percentage by which an amount would be increased if it were increased for that period at an annual percentage rate referred to in regulations made by the Board of Inland Revenue, and

            (c)   the percentage by which the retail prices index for the month in which the relevant event occurs is higher than that for April 2006.

    (6) The assumptions referred to in sub-paragraph (4)(b) are—

            (a)   that the individual's age on 5th April 2006 were what it is at the time of the first relevant event (so that neither paragraph 8(6) nor section (Valuation assumptions)(a) applies in arriving at what would be the value of the rights under paragraph 8), and

            (b)   that the amount of the earnings which would have fallen to be taken into account under the arrangement for calculating the amount of benefits payable to or in respect of the individual (if the individual became entitled to the present payment of benefits in respect of the rights under the arrangement on that date) were the lesser of the two amounts specified in sub-paragraph (7).

    (7) The amounts referred to in sub-paragraph (6)(b) are—

            (a)   the current amount of the relevant pensionable earnings immediately before the first relevant event, and

            (b)   the post-commencement earnings limit (see paragraphs 15 and 16).

    (8) But sub-paragraph (6)(b) applies in relation to an arrangement under a pension scheme within paragraph 1(1)(c) or (e) as if for "the lesser of the two amounts specified in sub-paragraph (7)" there were substituted "the amount specified in sub-paragraph (7)(a)".

    (9) In this paragraph "the relevant pensionable earnings" means the description of earnings (or the portion of the description of earnings) of the individual by reference to which the amount of benefits payable to or in respect of the individual would have fallen to be calculated if the individual became entitled to the present payment of benefits in respect of the rights under the arrangement on 5th April 2006.

    (10) For the purposes of sub-paragraph (7)(a) "the current amount" of the relevant pensionable earnings immediately before the first relevant event is the amount of the relevant pensionable earnings which, at that time, would fall to be taken into account in calculating the amount of benefits payable to or in respect of the individual under the arrangement if the individual became entitled to the present payment of benefits at that time (but subject to sub-paragraph (11)).

    (11) If at that time the individual is absent from work in connection with pregnancy, maternity, paternity or adoption, the current amount of the relevant pensionable earnings at that time includes what would be likely to be included in that amount if the individual were not so absent.'.

   

Mr Oliver Letwin
Mr Howard Flight [R]
Mr Mark Prisk
Mr Andrew Tyrie
Mr George Osborne

386

Schedule     34,     page     472,     line     6,     leave out 'pregnancy or childbirth' and insert 'being on maternity leave, adoption leave, parental leave, paternity leave (each as defined in accordance with the Employment Rights Act 1996) or in other prescribed circumstances'.

   

Mr Paul Boateng

513

Schedule     34,     page     472,     line     14,     leave out 'the pension scheme under which the arrangement' and insert 'any pension scheme under which the arrangement or any other arrangement related to the arrangement'.

   

Mr Paul Boateng

514

Schedule     34,     page     472,     line     18,     leave out 'benefit crystallisation' insert 'first relevant'.

   

Mr Paul Boateng

515

Schedule     34,     page     472,     line     20,     leave out 'relevant earnings' and insert 'individual's employment income from the employment to which the arrangement relates'.

   

Mr Paul Boateng

516

Schedule     34,     page     472,     line     23,     leave out from second 'the' to end of line 24 and insert 'first relevant event occurs.'.

 
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