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 6 — Reviews, appeals and maladministration
131

194
Status etc of the PPF Ombudsman and deputies
(1)
In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(c. 24) (other disqualifying offices), at the appropriate place insert—

“Ombudsman for the Board of the Pension Protection Fund and any
deputy to that Ombudsman appointed under section 193 of the
5
Pensions Act 2004.”
(2)
In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification Act
1975 (c. 25) (other disqualifying offices), at the appropriate place insert—

“Ombudsman for the Board of the Pension Protection Fund and any
deputy to that Ombudsman appointed under section 193 of the
10
Pensions Act 2004. “
(3)
In Schedule 4 to the Parliamentary Commissioner Act 1967 (c. 13) (relevant
tribunals for the purposes of section 5(7) of that Act), at the appropriate place
insert—

“The Ombudsman for the Board of the Pension Protection Fund
15
established under section 192 of the Pensions Act 2004.”
195
Annual reports to Secretary of State
(1)
The PPF Ombudsman must prepare a report on the discharge of his functions
for each financial year.
(2)
The PPF Ombudsman must send each report to the Secretary of State as soon
20
as practicable after the end of the financial year for which it is prepared.
(3)
The Secretary of State must arrange for the publication of each report sent to
him under subsection (2).
(4)
In this section “financial year” means—
(a)
the period beginning with the date on which the PPF Ombudsman is
25
established and ending with the next following 31st March, and
(b)
each successive period of 12 months.
References to the PPF Ombudsman
196
Reference of reviewable matter to the PPF Ombudsman
(1)
Regulations must make provision—
30
(a)
for a reviewable matter to be referred to the PPF Ombudsman
following a reconsideration decision under regulations made under
subsection (1)(b) or by virtue of subsection (3)(b) of section 190 in
respect of the matter, and
(b)
for the PPF Ombudsman—
35
(i)
to investigate and determine what (if any) is the appropriate
action for the Board to take in relation to the matter, and
(ii)
to remit the matter to the Board with directions for the purpose
of giving effect to his determination.
(2)
Regulations under subsection (1) must make provision about the making of
40
references to the PPF Ombudsman, including provision—
(a)
about the descriptions of persons who may make them,

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 6 — Reviews, appeals and maladministration
132

(b)
about the manner of making such references, including the times by
which they are to be made, and
(c)
for prescribed persons to be notified of—
(i)
references made under the regulations, and
(ii)
determinations and directions given under the regulations.
5
(3)
Regulations under subsection (1) must—
(a)
require the PPF Ombudsman to conduct an oral hearing in relation to
any reviewable matter referred to him under the regulations or to
dispose of the matter on the basis of written representations,
(b)
enable the PPF Ombudsman to consider evidence relating to the matter
10
which was not available to the Board or the Reconsideration
Committee, and
(c)
make other provision about the procedure for conducting
investigations, and reaching and giving determinations, under the
regulations, including the times by which determinations are to be
15
given.
(4)
The provision that may be made by virtue of subsection (3)(c) includes
provision—
(a)
conferring rights on prescribed persons—
(i)
to make representations to the PPF Ombudsman in relation to a
20
reviewable matter referred to him by virtue of this section,
(ii)
to be heard or represented at any oral hearing by the PPF
Ombudsman in relation to such a matter,
(b)
about the consideration of evidence by the PPF Ombudsman,
including—
25
(i)
production of documents,
(ii)
oral hearings,
(iii)
expert evidence,
(iv)
attendance of witnesses,
(c)
conferring rights on prescribed persons to continue a reference made
30
by a person who has died or is otherwise unable to act for himself,
(d)
as to the costs or expenses of prescribed persons,
(e)
conferring rights on prescribed persons to apply for a stay (or in
Scotland, for a sist) in relation to prescribed legal proceedings which
begin after the reference is made and conferring power on the relevant
35
court to make an order staying (or sisting) the proceedings if it is
satisfied of prescribed matters, and
(f)
for securing that any determination or direction of the PPF
Ombudsman under the regulations is binding on prescribed persons.
(5)
Regulations under subsection (1) may include provision—
40
(a)
conferring power on the PPF Ombudsman to direct the Board to pay
such compensation as he considers appropriate to such persons as he
may direct,
(b)
conferring power on the Board to make such payments, and
(c)
conferring such other powers on the Board as may be required when a
45
matter is remitted to it.

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 6 — Reviews, appeals and maladministration
133

197
Investigation by PPF Ombudsman of complaints of maladministration
(1)
Regulations must provide for the investigation and determination by the PPF
Ombudsman of such matters as may be prescribed following decisions on
relevant complaints given by the Board or the committee of the Board referred
to in section 191(3)(b) under regulations made under that section.
5
(2)
Regulations under this section must make provision—
(a)
prescribing the descriptions of person who may refer matters to the PPF
Ombudsman under the regulations,
(b)
about the manner in which such references may be made, including the
times by which they are to be made,
10
(c)
about the procedure for conducting investigations, and reaching and
giving determinations, on such references, including the times by
which the determinations are to be given,
(d)
about the powers of the PPF Ombudsman on making such
determinations, including—
15
(i)
the power to direct the Board to pay such compensation as he
considers appropriate to such persons as he considers have
sustained injustice in consequence of the matters complained
of, and
(ii)
the power to direct the Board to take or refrain from taking such
20
other steps as he may specify,
(e)
conferring such powers on the Board as are necessary to comply with
such requirements,
(f)
for prescribed persons to be notified of—
(i)
references to the PPF Ombudsman under the regulations, and
25
(ii)
determinations and directions by the PPF Ombudsman under
the regulations,
(g)
conferring rights on prescribed persons—
(i)
to make representations to the PPF Ombudsman in relation to a
matter referred to him by virtue of this section,
30
(ii)
to be heard or represented at any oral hearing by the PPF
Ombudsman in relation to such a matter,
(h)
about the consideration of evidence by the PPF Ombudsman,
including—
(i)
production of documents,
35
(ii)
oral hearings,
(iii)
expert evidence,
(iv)
attendance of witnesses,
(i)
conferring rights on prescribed persons to continue a reference made
by a person who has died or is otherwise unable to act for himself,
40
(j)
as to the costs or expenses of prescribed persons,
(k)
conferring rights on prescribed persons to apply for a stay (or in
Scotland, for a sist) in relation to prescribed legal proceedings which
begin after the reference is made and conferring power on the relevant
court to make an order staying (or sisting) the proceedings if it is
45
satisfied of prescribed matters, and
(l)
for securing that any determination or direction of the PPF
Ombudsman under the regulations is binding on prescribed persons.

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 6 — Reviews, appeals and maladministration
134

198
Publishing reports etc
(1)
If the PPF Ombudsman considers it appropriate to do so in any particular case,
he may publish in such form and manner as he considers appropriate a report
of any investigation carried out by virtue of regulations under section 196 or
197 and of the result of that investigation.
5
(2)
For the purposes of the law of defamation, the publication of any matter by the
PPF Ombudsman under or by virtue of any provision of this Chapter shall be
absolutely privileged.
199
Determinations of the PPF Ombudsman
(1)
A person bound by a determination or direction by the PPF Ombudsman by
10
virtue of regulations made under section 196 or section 197 may appeal on a
point of law arising from the determination or direction—
(a)
in England and Wales, to the High Court, or
(b)
in Scotland, to the Court of Session.
(2)
Any determination or direction of the PPF Ombudsman is enforceable—
15
(a)
in England and Wales, in a county court as if it were a judgment or
order of that court, and
(b)
in Scotland, in like manner as an extract registered decree arbitral
bearing warrant for execution issued by the sheriff court of any
sheriffdom in Scotland.
20
200
Obstruction etc of the PPF Ombudsman
(1)
This section applies if any person—
(a)
without lawful excuse obstructs the PPF Ombudsman in the
performance of his functions, or
(b)
is guilty of any act or omission in relation to an investigation by the PPF
25
Ombudsman under regulations made under section 196 or section 197,
which, if that investigation were a proceeding in the court, would
constitute contempt of court.
(2)
The PPF Ombudsman may certify the offence to the court.
(3)
Where an offence is certified under subsection (2), the court may—
30
(a)
inquire into the matter,
(b)
hear any witnesses who may be produced against or on behalf of the
person charged with the offence and any statement that may be offered
in defence, and
(c)
deal with him in any manner in which the court could deal with him if
35
he had committed the like offence in relation to the court.
(4)
This section is to be construed, in its application to Scotland, as if contempt of
court were categorised as an offence in Scots law.
(5)
In this section “the court” means—
(a)
in England and Wales, a county court;
40
(b)
in Scotland, the sheriff.

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 7 — Miscellaneous
135

Chapter 7
Miscellaneous
Backdating the winding up of eligible schemes
201
Backdating the winding up of eligible schemes
(1)
Subsection (3) applies where—
5
(a)
a qualifying insolvency event occurs in relation to the employer in
relation to an eligible scheme, and
(b)
the winding up of the scheme begins at or after the time of that event
but not later than the first of the following events in relation to the
scheme—
10
(i)
the issuing of a notice under section 111(2) by an insolvency
practitioner in relation to the employer,
(ii)
the Board ceasing to be involved with the scheme by virtue of
an event within section 132(2)(c), or
(iii)
in a case where section 132(4) does not apply, the issuing of a
15
notice under section 111(4) by a person who was or is such an
insolvency practitioner.
(2)
Subsection (3) also applies where—
(a)
the trustees or managers of an eligible scheme—
(i)
make an application to the Board under subsection (1) of section
20
116, or
(ii)
receive a notice from the Board under subsection (5)(a) of that
section, and
(b)
the winding up of the scheme begins—
(i)
at or after the time the application is made or notice is received,
25
but
(ii)
not later than the issuing of a notice in relation to the scheme
under section 117(2) or (3).
(3)
The winding up of the scheme is to be taken as beginning immediately before
the event within subsection (1)(a) or, as the case may be, (2)(a) if—
30
(a)
the winding up is in pursuance of an order of the Regulator under
section 11 of the Pensions Act 1995 (c. 26) directing the winding up of
the scheme, or
(b)
in any other case, the trustees or managers of the scheme so determine.
(4)
For the purposes of this section “qualifying insolvency event” has the same
35
meaning as in section 114.
(5)
Subsection (4) of section 115 applies for the purposes of subsection (2) of this
section as it applies for the purposes of subsection (1) of that section.
(6)
This section is to be read subject to section 122 (which restricts the winding up
of an eligible scheme during an assessment period).
40

Pensions Bill
Part 3 — Scheme funding
136

Part 3
Scheme funding
Introductory
202
Pension schemes to which this Part applies
(1)
The provisions of this Part apply to every occupational pension scheme other
5
than—
(a)
a money purchase scheme, or
(b)
a prescribed scheme or a scheme of a prescribed description.
(2)
Regulations under subsection (1)(b) may provide for exemptions from all or
any of the provisions of this Part.
10
Scheme funding
203
The statutory funding objective
(1)
Every scheme is subject to a requirement (“the statutory funding objective”)
that it must have sufficient and appropriate assets to cover its technical
provisions.
15
(2)
A scheme’s “technical provisions” means the amount required, on an actuarial
calculation, to make provision for the scheme’s liabilities.
(3)
For the purposes of this Part—
(a)
the assets to be taken into account and their value shall be determined,
calculated and verified in a prescribed manner, and
20
(b)
the liabilities to be taken into account shall be determined in a
prescribed manner and the scheme’s technical provisions shall be
calculated in accordance with any prescribed methods and
assumptions.
(4)
Regulations may—
25
(a)
provide for alternative prescribed methods and assumptions,
(b)
provide that it is for the trustees or managers to determine which
methods and assumptions are to be used in calculating a scheme’s
technical provisions, and
(c)
require the trustees or managers, in making their determination, to take
30
into account prescribed matters and follow prescribed principles.
(5)
Any provision of the scheme that limits the amount of its liabilities by reference
to the value of its assets shall be disregarded.
204
Statement of funding principles
(1)
The trustees or managers must prepare, and from time to time review and if
35
necessary revise, a written statement of—
(a)
their policy for securing that the statutory funding objective is met, and
(b)
such other matters as may be prescribed.

This is referred to in this Part as a “statement of funding principles”.

Pensions Bill
Part 3 — Scheme funding
137

(2)
The statement must, in particular, record any decisions by the trustees or
managers as to—
(a)
the methods and assumptions to be used in calculating the scheme’s
technical provisions, and
(b)
the period within which, and manner in which, any failure to meet the
5
statutory funding objective is to be remedied.
(3)
Provision may be made by regulations—
(a)
as to the period within which a statement of funding principles must be
prepared, and
(b)
requiring it to be reviewed, and if necessary revised, at such intervals,
10
and on such occasions, as may be prescribed.
(4)
Where any requirement of this section is not complied with section 10 of the
Pensions Act 1995 (c. 26) (civil penalties) applies to a trustee or manager who
has failed to take all reasonable steps to secure compliance.
205
Actuarial valuations and reports
15
(1)
The trustees or managers must obtain actuarial valuations—
(a)
at intervals of not more than one year or, if they obtain actuarial reports
for the intervening years, at intervals of not more than three years, and
(b)
in such circumstances and on such other occasions as may be
prescribed.
20
(2)
In this Part—
(a)
an “actuarial valuation” means a written report, prepared and signed
by the actuary, valuing the scheme’s assets and calculating its technical
provisions,
(b)
the effective date of an actuarial valuation is the date by reference to
25
which the assets are valued and the technical provisions calculated,
(c)
an “actuarial report” means a written report, prepared and signed by
the actuary, on developments affecting the scheme’s technical
provisions since the last actuarial valuation was prepared, and
(d)
the effective date of an actuarial report is the date by reference to which
30
the information in the report is stated.
(3)
The intervals referred to in subsection (1)(a) are between effective dates of the
valuations, and—
(a)
the effective date of the first actuarial valuation must be not more than
one year after the establishment of the scheme, and
35
(b)
the effective date of any actuarial report must be not more than one
year after the effective date of the last actuarial valuation, or, if more
recent, the last actuarial report.
(4)
The trustees or managers must ensure that a valuation or report obtained by
them is received by them within the prescribed period after its effective date.
40
(5)
Nothing in this section affects any power or duty of the trustees or managers
to obtain actuarial valuations or reports at more frequent intervals or in other
circumstances or on other occasions.
(6)
An actuarial valuation or report (whether obtained under this section or in
pursuance of any other power or duty) must be prepared in such a manner,
45