Pensions Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 3 — Pension protection
101

151
Administration of compensation
(1)
Regulations may make further provision regarding the operation and
administration of this Chapter.
(2)
Regulations under subsection (1) may, in particular, make provision—
(a)
prescribing the manner in which and time when compensation is to be
5
paid (including provision requiring periodic compensation to be paid
by instalments);
(b)
for calculating the amounts of compensation payable under Schedule 7
according to a prescribed scale or otherwise adjusting them to avoid
fractional amounts or facilitate computation;
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(c)
prescribing the circumstances and manner in which the Board may
discharge its liability to provide periodic compensation by the payment
of a lump sum;
(d)
prescribing the circumstances and manner in which compensation to
which a person (“the beneficiary”) is entitled may be made to another
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person on behalf of the beneficiary for any purpose (including the
discharge in whole or in part of an obligation of the beneficiary or any
other person);
(e)
for the payment or distribution of compensation to or among persons
claiming to be entitled on the death of any person and for dispensing
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with strict proof of their title;
(f)
for the recovery of amounts of compensation paid by the Board in
excess of entitlement (together with interest on such amounts for the
period from payment until recovery);
(g)
specifying the circumstances in which payment of compensation can be
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suspended.
(3)
In this section “compensation” means compensation payable under Schedule 7.
Discharge of Board’s liabilities
152
Discharge of liabilities in respect of compensation
(1)
The section applies where the Board assumes responsibility for an eligible
30
scheme under this Chapter.
(2)
The Board may provide for the discharge of any liability imposed by this
Chapter to provide compensation—
(a)
by the taking out of a policy of insurance or a number of such policies;
(b)
by the entry into an annuity contract or a number of such contracts;
35
(c)
by the transfer of the benefit of such a policy or policies or such a
contract or contracts.
153
Discharge of liabilities in respect of money purchase benefits
(1)
This subsection applies where—
(a)
the Board assumes responsibility for an eligible scheme under this
40
Chapter, and
(b)
one or more members are entitled, or have accrued rights, under the
scheme rules to money purchase benefits.

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 3 — Pension protection
102

(2)
Regulations must make provision in respect of cases to which subsection (1)
applies requiring the Board to secure that liabilities in respect of such benefits
transferred to the Board under section 144 are discharged by it in the
prescribed manner.
(3)
The provision made under subsection (2) must include provision prescribing
5
the manner in which protected rights are to be given effect to.
(4)
In this section—

“accrued rights”, under the scheme rules of a scheme, include pension
credit rights within the meaning of section 124(1) of the Pensions Act
1995 (c. 26);
10

“protected rights” has the meaning given in section 10 of the Pension
Schemes Act 1993 (c. 48) (protected rights and money purchase
benefits);

“scheme rules” has the meaning given by section 134(7).
Equal treatment
15
154
Equal treatment
(1)
This section applies where—
(a)
a woman has been employed on like work with a man in the same
employment,
(b)
a woman has been employed on work rated as equivalent with that of
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a man in the same employment, or
(c)
a woman has been employed on work which, not being work in relation
to which paragraph (a) or (b) applies, was, in terms of the demands
made on her (for instance under such headings as effort, skill and
decision), of equal value to that of a man in the same employment,
25

and service in that employment was pensionable service under an
occupational pension scheme.
(2)
If, apart from this subsection, any of the payment functions as it applies
(directly or indirectly) in respect of the scheme—
(a)
is or becomes less favourable to the woman than it is to the man, or
30
(b)
is or becomes less favourable to the man than it is to the woman,

that function has effect with such modifications as are necessary to ensure that
the provision is not less favourable.
(3)
Subsection (2) does not operate in relation to any difference as between a
woman and a man in the operation of any of the payment functions if the Board
35
proves that the difference is genuinely due to a material factor which—
(a)
is not the difference of sex, but
(b)
is a material difference between the woman’s case and the man’s case.
(4)
Subsection (2) does not apply in such circumstances as may be prescribed.
(5)
This section has effect in relation to the exercise of any payment function in so
40
far as it relates to pensionable service under the scheme on or after 17th May
1990.
(6)
In this section—

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 3 — Pension protection
103


“payment function” means any function conferred on the Board by or by
virtue of this Chapter which relates to a person’s entitlement to or the
payment of any amount under or by virtue of—
(a)
the pension compensation provisions,
(b)
section 149 (duty to pay scheme benefits unpaid at assessment
5
date),
(c)
section 153 (discharge of liabilities in respect of money purchase
benefits);

“pensionable service” has the meaning given in paragraph 32 of Schedule
7.
10
Relationship with fraud compensation regime
155
Relationship with fraud compensation regime
(1)
No transfer notice may be given in respect of a scheme within the first 12
months of an assessment period in relation to the scheme.
(2)
Where an application has been made under section 165 (application for fraud
15
compensation payment), no transfer notice may be given until—
(a)
the Board has determined the application,
(b)
the period within which the Board’s determination may be reviewed
by virtue of Chapter 6 has expired, and
(c)
if the determination is so reviewed—
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(i)
the review and any reconsideration,
(ii)
any reference to the PPF Ombudsman in respect of the
determination, and
(iii)
any appeal against his determination or directions,

has been finally disposed of.
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(3)
Subsection (4) applies where during an assessment period in relation to a
scheme the Board determines to make one or more fraud compensation
payments (“the fraud compensation”) to the trustees or managers of the
scheme under Chapter 4 of this Part.
(4)
For the purposes of determining whether the condition in section 114(2)(a),
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115(2)(a), 135(2) or 141(1) is satisfied, any fraud compensation payment which
becomes payable after the relevant time is, to the extent that it relates to a loss
incurred by the scheme before that time, to be regarded as an asset of the
scheme at that time.
(5)
For the purposes of subsection (4) “relevant time”—
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(a)
in the case of section 114(2)(a), has the same meaning as in that
provision,
(b)
in the case of section 115(2)(a), has the same meaning as in that
provision,
(c)
in the case of section 135(2) means the reconsideration date (within the
40
meaning of section 134), and
(d)
in the case of section 141(1), has the same meaning as in that provision.
(6)
Subsection (4) does not apply to the extent that the fraud compensation is
payable in respect of a reduction in the value of money purchase assets of the
scheme.
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Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 3 — Pension protection
104

For this purpose “money purchase assets” means assets representing the value
of any rights in respect of money purchase benefits under the scheme.
The fund
156
Pension Protection Fund
(1)
The Pension Protection Fund shall consist of—
5
(a)
property and rights transferred to the Board under section 144(2)(a),
(b)
contributions levied under section 157 or 158 (initial and pension
protection levies),
(c)
money borrowed by the Board under section 104 for the purposes of
this Chapter,
10
(d)
any income or capital gain credited under subsection (2),
(e)
any amount paid to the Board by virtue of section 126 (repayment of
loans to trustees or managers and payment of interest),
(f)
amounts recovered under section 146(3)(a) or by virtue of section
151(2)(f) (overpayments),
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(g)
amounts transferred from the Fraud Compensation Fund under section
170 (fraud compensation transfer payments), and
(h)
amounts of a prescribed description (other than amounts paid, directly
or indirectly, to the Board by the Crown).
(2)
The Board must credit to the Pension Protection Fund any income or capital
20
gain arising from the assets in the Fund.
(3)
The following are payable out of the Pension Protection Fund—
(a)
any sums required to meet liabilities transferred to the Board under
section 144(2)(a),
(b)
any sums required to make payments in accordance with the pension
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compensation provisions,
(c)
any sums required for the repayment of, and the payment of interest
on, money within subsection (1)(c),
(d)
any sums required to make loans under section 126 (loans to trustees or
managers),
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(e)
any sums required to make payments under section 146(3)(b)
(underpayments during the assessment period),
(f)
any sums required to make payments under section 149 (payment of
unpaid scheme benefits),
(g)
any sums required to discharge liabilities under section 152 or 153
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(discharge of liabilities in respect of compensation or money purchase
benefits),
(h)
any sums required to meet expenditure incurred by virtue of section
144(5) and paragraph 7 of Schedule 6 (expenditure associated with
transfer of property, rights and liabilities to the Board),
40
(i)
sums required for prescribed purposes.
(4)
No other amounts are payable out of the Pension Protection Fund.