Energy Bill [HL]

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Energy Bill [HL]

Energy Bill [HL]
Schedule 8 — Pensions
Part 2 — Extensions of certain pension schemes
188

(a)
do not include references to his being eligible to become a participant
in a scheme if a different person becomes his employer or if his
employer becomes the subsidiary of a particular body corporate; but
(b)
do include references, in the case of a person whose participation in
the scheme is temporarily suspended (whether by reason of a
5
secondment or loan of his service or otherwise), to fulfilment of the
conditions that would bring the suspension to an end.
      (7)
In this paragraph “company” has the same meaning as in the Companies Act
1985 (c. 6).
Part 2
10
Extensions of certain pension schemes
2     (1)
The NDA may, by direction, make such modifications of a relevant pension
scheme as it considers appropriate for purposes connected with extending
the groups of persons who may participate in the scheme to—
(a)
employees of a qualifying employer;
15
(b)
directors or other officers of a qualifying employer who are not
employees of the employer.
      (2)
The NDA may also, by direction, make such further modifications of a
relevant pension scheme that has been modified by a direction under sub-
paragraph (1) as it considers appropriate for purposes connected with
20
conferring functions in relation to the scheme’s operation or management on
the NDA.
      (3)
For the purposes of this paragraph a person is a qualifying employer in
relation to a relevant pension scheme if—
(a)
a transfer is made in accordance with a nuclear transfer scheme; and
25
(b)
in consequence of that transfer persons falling within sub-paragraph
(4) become employees, or directors or other officers, of that person.
      (4)
A person falls within this sub-paragraph if immediately before the transfer
in question takes effect, he—
(a)
is a participant in the relevant pension scheme in question;
30
(b)
is eligible to become such a participant; or
(c)
would be eligible to become such a participant had he attained an
age, or fulfilled a condition, specified in that scheme.
      (5)
Where employees, or directors or other officers, of a qualifying employer
participate in a pension scheme by virtue of a direction under this
35
paragraph, the employer must pay to the trustee of the scheme in respect of
that participation—
(a)
such amounts as may be determined in accordance with the rules of
the scheme; or
(b)
such higher amounts as may be determined by the Secretary of State.
40
      (6)
The modifications of a pension scheme that may be made under this
paragraph include modifications that make supplemental, consequential or
transitional provision.
      (7)
The modifications of a pension scheme that may be made under this
paragraph do not include modifications that would, to any extent, deprive a
45
member of the scheme of pension rights that accrued to him under the
scheme before the coming into force of the modification.

Energy Bill [HL]
Schedule 8 — Pensions
Part 3 — Public sector transfers of UKAEA pension scheme members
189

      (8)
Before making a modification of a pension scheme under this paragraph the
NDA must consult—
(a)
the trustee of the scheme; and
(b)
such persons as appear to the NDA to represent the employees, or
directors or other officers, likely to be affected by the modification.
5
      (9)
The consent of the Secretary of State is required for the giving of a direction
under this paragraph.
     (10)
In this paragraph “relevant pension scheme” means—
(a)
a nuclear pension scheme maintained by or on behalf of a nuclear
company which is wholly-owned by the Crown;
10
(b)
a nuclear pension scheme designated as a relevant pension scheme
for the purposes of this paragraph by an order made by the Secretary
of State.
Part 3
Public sector transfers of UKAEA pension scheme members
15
Transfers of employment for NDA purposes
3
For the purposes of this Part of this Schedule a transfer of a person’s
employment is made for NDA purposes if his employment immediately
after the transfer takes effect is—
(a)
employment with the NDA or a subsidiary of the NDA; or
20
(b)
other employment the duties of which consist wholly or mainly of
duties relating to matters connected with the carrying out by the
NDA of its functions.
Application of UKAEA pension scheme
4     (1)
A person who—
25
(a)
in accordance with a nuclear transfer scheme, or with any transfer
arrangements, becomes an employee of a relevant public sector
employer, and
(b)
immediately before the transfer of his employment takes effect, is a
participant in a UKAEA pension scheme,
30

is not to cease to be a participant in that pension scheme by reason only that
he has ceased to be employed by the transferor.
      (2)
A person falling within sub-paragraph (1)(a) but not within sub-paragraph
(1)(b) who, immediately before the transfer of his employment takes effect—
(a)
is eligible to become a participant in a UKAEA pension scheme, or
35
(b)
would be eligible to become such a participant had he attained an
age, or fulfilled a condition, specified in the pension scheme,

is not precluded from being, or becoming, eligible to participate in that
pension scheme by reason only that he has ceased to be employed by the
transferor.
40
      (3)
Sub-paragraphs (1) and (2) do not apply in relation to the transfer of a
person’s employment unless—
(a)
the transfer is made for NDA purposes; or
(b)
the transfer is a transfer to the Civil Nuclear Police Authority.

Energy Bill [HL]
Schedule 8 — Pensions
Part 3 — Public sector transfers of UKAEA pension scheme members
190

      (4)
Sub-paragraphs (1) and (2) do not apply in relation to the transfer of a
person’s employment that takes effect on or after the designated date
unless—
(a)
that person has satisfied the qualification requirement throughout
the period beginning immediately before that date and ending
5
immediately before the transfer takes effect; or
(b)
the transfer is a transfer to the Civil Nuclear Police Authority.
      (5)
The qualification requirement is satisfied by a person for the purposes of
sub-paragraph (4) at any time when—
(a)
he is a participant in a UKAEA pension scheme;
10
(b)
he is eligible to become such a participant; or
(c)
he would be eligible to become such a participant had he attained an
age, or fulfilled a condition, specified in the pension scheme;

and it is immaterial for the purposes of that sub-paragraph that the
requirement is satisfied at different times in the period in question by
15
reference to different paragraphs of this sub-paragraph.
      (6)
A UKAEA pension scheme may apply to persons who are—
(a)
persons to whom it would not otherwise apply, and
(b)
entitled to participate in that pension scheme by virtue of sub-
paragraph (1) or (2),
20

as it applies to persons to whom it applies apart from this paragraph.
      (7)
A UKAEA pension scheme may also apply to persons who (without being
persons to whom it would apply apart from this sub-paragraph) are
employees of a publicly controlled company in a case in which—
(a)
that company is a company to which employees have been
25
transferred in accordance with a nuclear transfer scheme or with
transfer arrangements;
(b)
those transfers, if they were made in accordance with transfer
arrangements, were made for NDA purposes;
(c)
the employees transferred were or included employees who,
30
immediately after the transfer, were entitled by virtue of sub-
paragraph (1) or (2) to participate in a UKAEA pension scheme or to
an actual or potential eligibility to participate; and
(d)
the employees to whom the scheme is applied do not include persons
who were employees of the company immediately before the
35
occasion or (as the case may be) first occasion on which a transfer of
the employment of a person so entitled was made in accordance with
a nuclear transfer scheme or transfer arrangements.
      (8)
A person is not entitled to participate in a UKAEA pension scheme by virtue
of any of sub-paragraphs (1) to (7) at any time after he has ceased to be able
40
to remain, or to become, a participant in that scheme as a consequence of
having agreed to become a participant in—
(a)
a pension scheme maintained by the relevant public sector employer
to whom his employment was transferred; or
(b)
a pension scheme maintained by another person in which he is able
45
to become a participant by reference to his employment with that
employer.
      (9)
If a relevant public sector employer to which the employment of any person
is transferred in accordance with a nuclear transfer scheme or with transfer
arrangements—
50

Energy Bill [HL]
Schedule 8 — Pensions
Part 3 — Public sector transfers of UKAEA pension scheme members
191

(a)
is a publicly controlled company at the time when the employment
is transferred, but
(b)
subsequently ceases to be a publicly controlled company,

then, from the time when it so ceases, no person employed by that company
shall be entitled, by virtue of that employment, to participate in a UKAEA
5
pension scheme or to be or to become eligible to participate in such a scheme.
     (10)
In this paragraph “transferor”, in relation to a transfer of employment,
means the person by whom the transferred employee was employed
immediately before the transfer takes effect.
Modification of UKAEA pension scheme
10
5     (1)
The Secretary of State may direct the UKAEA to make such modifications of
a UKAEA pension scheme for the purpose of giving effect to paragraph 4 as
may be specified in the direction.
      (2)
He may also direct the UKAEA to make such modifications as may be so
specified for either or both of the following purposes—
15
(a)
applying provisions of a UKAEA pension scheme that apply to
employees of a publicly controlled company to the case of a person
falling within sub-paragraph (3) who becomes a director or other
officer of that company; and
(b)
modifying those provisions in their application to such a case.
20
      (3)
A person falls within this sub-paragraph if, immediately before becoming a
director or other officer of the company in question, he—
(a)
is a participant in a UKAEA pension scheme;
(b)
is eligible to become such a participant; or
(c)
would be eligible to be such a participant had he attained an age, or
25
fulfilled a condition, specified in such a scheme.
Transfer of funds from UKAEA pension scheme
6     (1)
The Secretary of State may direct the UKAEA to make such modifications of
a UKAEA pension scheme as may be specified in the direction for the
purpose of requiring or enabling the transfer of funds and liabilities arising
30
under the scheme in a case falling within sub-paragraph (2).
      (2)
That case is where a person ceases to be a participant in the scheme in
consequence of—
(a)
a transfer of his employment in accordance with a nuclear transfer
scheme or transfer arrangements; or
35
(b)
a transfer, in accordance with such a scheme or such arrangements,
of securities of, or voting rights in, a company by which he is
employed or a company of which such a company is a subsidiary.
      (3)
A direction by the Secretary of State under this paragraph may prescribe—
(a)
the method of determining what is to be transferred; and
40
(b)
the assumptions to be used in making that determination.
Exercise of powers of Secretary of State
7     (1)
A direction under paragraph 5 or 6 may require the UKAEA to make such
supplemental, consequential and transitional provision modifying a
UKAEA pension scheme as the Secretary of State considers appropriate.
45

Energy Bill [HL]
Schedule 8 — Pensions
Part 4 — Other transfers
192

      (2)
Before giving a direction under paragraph 5 or 6, the Secretary of State must
consult—
(a)
the UKAEA;
(b)
the Treasury; and
(c)
such persons as appear to him to represent the employees, or
5
directors or other officers, likely to be affected by the direction.
      (3)
The power to give a direction under paragraph 5 affecting persons who
become employees, or directors or other officers, of a publicly controlled
company is not exercisable after the company has ceased to be a publicly
controlled company.
10
      (4)
The provisions of paragraphs 5 and 6—
(a)
are in addition to the powers of the Secretary of State to give
directions to the UKAEA under paragraph 13 of this Schedule,
paragraph 7 of Schedule 10 to this Act or section 3 of the Atomic
Energy Authority Act 1954 (c. 32); and
15
(b)
are to be disregarded in construing those powers.
Payments to UKAEA by relevant public sector employer
8
Where employees, or directors or other officers, of a relevant public sector
employer to whom employees are transferred in accordance with a nuclear
transfer scheme or transfer arrangements participate in a UKAEA pension
20
scheme by virtue of paragraph 4 or 5, the employer must pay to the UKAEA
such amounts in respect of that participation as are—
(a)
agreed between the relevant public sector employer and the
UKAEA; or
(b)
in the absence of such agreement, determined in relation to that
25
employer by the Secretary of State.
Part 4
Other transfers
Persons entitled to pension protection under paragraphs 10 and 11
9     (1)
For the purposes of this Part of this Schedule a person is entitled to pension
30
protection in relation to a nuclear transfer scheme or any transfer
arrangements if—
(a)
sub-paragraph (2) applies to him; and
(b)
he is a person falling within sub-paragraph (5).
      (2)
This sub-paragraph applies to a person if—
35
(a)
in accordance with the scheme or arrangements, a transfer
mentioned in sub-paragraph (3) occurs; and
(b)
immediately after the time at which that transfer takes effect, the
person’s employment is for NDA purposes.
      (3)
The transfers referred to in sub-paragraph (2) are—
40
(a)
a transfer of the person’s employment to the UKAEA, the NDA, a
publicly controlled company or a private sector employer;
(b)
where his employment is not so transferred, a transfer of securities
of, or voting rights in, a company by which he is employed or a
company of which such a company is a subsidiary.
45

Energy Bill [HL]
Schedule 8 — Pensions
Part 4 — Other transfers
193

      (4)
For the purposes of sub-paragraph (2) a person’s employment is for NDA
purposes if it is—
(a)
employment with the NDA or a subsidiary of the NDA; or
(b)
other employment the duties of which consist wholly or mainly of
duties relating to matters connected with the carrying out by the
5
NDA of its functions.
      (5)
A person falls within this sub-paragraph if—
(a)
he is a person to whom sub-paragraph (7) applies immediately
before the relevant time;
(b)
he is (in a case where the relevant time is on or after the designated
10
date) a person to whom that sub-paragraph has applied throughout
the period beginning immediately before the designated date and
ending immediately before the relevant time;
(c)
he satisfies the employment condition at the relevant time; and
(d)
in consequence of the transfer scheme or transfer arrangements—
15
(i)
he is precluded from being, or becoming, eligible to
participate in the nuclear pension scheme by reference to
which that sub-paragraph applies to him immediately before
the relevant time; or
(ii)
his employer is entitled to do something the effect of which
20
will be so to preclude him.
      (6)
For the purposes of sub-paragraph (5) it is immaterial that the condition in
paragraph (b) of that sub-paragraph is satisfied at different times in the
period by reference to different schemes or different paragraphs of sub-
paragraph (7) or both.
25
      (7)
This sub-paragraph applies to a person if—
(a)
he is a participant in a nuclear pension scheme;
(b)
he is eligible to become such a participant; or
(c)
he would be eligible to become such a participant had he attained an
age, or fulfilled a condition, specified in the pension scheme.
30
      (8)
For the purposes of sub-paragraph (5) the employment condition is satisfied
by a person at the relevant time if, and only if, his employment throughout
the relevant period has been for NDA purposes (within the meaning of sub-
paragraph (4)).
      (9)
For the purposes of sub-paragraph (8) the relevant period in the case of a
35
person to whom sub-paragraph (2) applies is whichever is the shorter of—
(a)
the period of six months ending with the relevant time; and
(b)
the period up to the relevant time since the last occasion prior to the
present case on which sub-paragraph (2) applied to him.
     (10)
For the purpose of a person being entitled to pension protection in relation
40
to a nuclear transfer scheme or any transfer arrangements on the first
occasion on which sub-paragraph (2) applies to him, this paragraph shall
have effect with the omission of sub-paragraph (5)(c).
     (11)
A person is not entitled to pension protection in relation to a nuclear transfer
scheme or any transfer arrangements—
45
(a)
at a time before the designated date unless he is a public sector
employee immediately before that time; or
(b)
at a time on or after the designated date unless he was a public sector
employee at the time immediately before that date.

Energy Bill [HL]
Schedule 8 — Pensions
Part 4 — Other transfers
194

     (12)
In this paragraph “the relevant time”, in relation to a person to whom sub-
paragraph (2) applies, means—
(a)
the time when, in accordance with the scheme or arrangements, the
transfer of his employment to the UKAEA, the NDA, a publicly
controlled company or a private sector employer takes effect; or
5
(b)
in relation to a person whose employment is not so transferred, the
time when, in accordance with the scheme or arrangements, the
transfer of securities of, or voting rights in, the company by which he
is employed or the company of which it is a subsidiary takes effect.
Protection on transfer in accordance with a nuclear transfer scheme
10
10    (1)
Before the coming into force of a nuclear transfer scheme in relation to which
persons are entitled to pension protection the Secretary of State must
consult—
(a)
the appropriate pension scheme authority;
(b)
the Treasury; and
15
(c)
such persons as appear to him to represent the persons who will be
entitled to pension protection in relation to the scheme.
      (2)
Before the coming into force of such a transfer scheme, the Secretary of State
must satisfy himself that every person entitled to pension protection in
relation to the scheme will be entitled, by virtue of the employment that he
20
will hold after the relevant time—
(a)
to exercise an option of becoming a participant in an appropriate
pension scheme; or
(b)
in the case of a person to whom paragraph 9(7)(c) will apply
immediately before the relevant time, to exercise such an option on
25
or before attaining the age or fulfilling the condition in question.
      (3)
The Secretary of State’s duty under sub-paragraph (2) is owed to every
person who is entitled to pension protection in relation to the transfer
scheme.
      (4)
In the case of a person to whom paragraph 9(5)(d)(ii) applies, the references
30
in sub-paragraph (2) to a person being entitled to exercise an option are to
be construed as references to a person being entitled to exercise an option if
his employer exercises the entitlement mentioned in paragraph 9(5)(d)(ii).
      (5)
For the purposes of sub-paragraph (2), a pension scheme is an appropriate
pension scheme in relation to a person if the Secretary of State is satisfied
35
that—
(a)
taking into account the other benefits (if any) that are conferred on or
made available to that person as a result of the employment that he
will hold after the relevant time, and
(b)
taking the benefits that are available under the provisions of that
40
pension scheme as a whole,

the benefits that are available under those provisions are no less favourable
than the benefits available under the provisions (taken as a whole) of the
nuclear pension scheme in respect of which he is entitled to protection under
this Part of this Schedule.
45
      (6)
In sub-paragraph (5) the reference to the scheme in respect of which a person
is entitled to protection under this Part of this Schedule is a reference to—
(a)
in the case of a person who has not previously been owed a duty
under either sub-paragraph (2) or paragraph 11(3), the scheme by