Pensions Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 3 — Scheme funding
138

give such information, contain such statements and satisfy such other
requirements as may be prescribed.
(7)
The trustees or managers must secure that any actuarial valuation or report
obtained by them (whether obtained under this section or in pursuance of any
other power or duty) is made available to the employer within seven days of
5
their receiving it.
(8)
Where subsection (1), (4) or (7) 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.
206
Certification of technical provisions
10
(1)
When an actuarial valuation is carried out, the calculation of the technical
provisions must be certified by the actuary.
(2)
The certificate must state that in the opinion of the actuary the calculation—
(a)
is made in accordance with regulations under section 203, and
(b)
complies with any other prescribed requirements.
15
(3)
If the actuary cannot give the certificate required by subsection (2) he must
report the matter in writing to the Regulator within a reasonable period after
the end of the period within which the valuation must be received by the
trustees or managers.

Section 10 of the Pensions Act 1995 (civil penalties) applies to the actuary if he
20
fails without reasonable excuse to comply with this subsection.
207
Recovery plan
(1)
If having obtained an actuarial valuation it appears to the trustees or managers
of a scheme that the statutory funding objective was not met on the effective
date of the valuation, they must prepare a recovery plan within the prescribed
25
time.
(2)
A recovery plan must set out—
(a)
the steps to be taken to meet the statutory funding objective, and
(b)
the period within which that is to be achieved.
(3)
A recovery plan must comply with any prescribed requirements and must be
30
appropriate having regard to the nature and circumstances of the scheme.
(4)
In preparing a recovery plan the trustees or managers must take account of
prescribed matters.
(5)
Provision may be made by regulations as to the circumstances in which a
recovery plan may or must—
35
(a)
be reviewed and if necessary revised, or
(b)
be replaced by a recovery plan prepared as a result of a subsequent
actuarial valuation.
(6)
The trustees or managers must, except in prescribed circumstances, send a
copy of any recovery plan to the Regulator within a reasonable period after it
40
is prepared or, as the case may be, revised.

If the recovery plan replaces an earlier recovery plan, it must be accompanied
by the prescribed information.

Pensions Bill
Part 3 — Scheme funding
139

(7)
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.
208
Schedule of contributions
(1)
The trustees or managers must prepare, and from time to time review and if
5
necessary revise, a schedule of contributions.
(2)
A “schedule of contributions” means a statement showing—
(a)
the rates of contributions payable towards the scheme by or on behalf
of the employer and the active members of the scheme, and
(b)
the dates on or before which such contributions are to be paid.
10
(3)
Provision may be made by regulations—
(a)
as to the period within which, after the establishment of a scheme, a
schedule of contributions must be prepared,
(b)
requiring the schedule of contributions to be reviewed, and if necessary
revised, at such intervals, and on such occasions, as may be prescribed,
15
and
(c)
as to the period for which a schedule of contributions is to be in force.
(4)
The schedule of contributions must satisfy prescribed requirements.
(5)
The schedule of contributions must be certified by the actuary and—
(a)
the duty to prepare or revise the schedule is not fulfilled, and
20
(b)
the schedule shall not come into force,

until it has been so certified.
(6)
The certificate must state that, in the opinion of the actuary—
(a)
the schedule of contributions is consistent with the statement of
funding principles, and
25
(b)
the rates shown in the schedule are such that—
(i)
where the statutory funding objective was not met on the
effective date of the last actuarial valuation, the statutory
funding objective can be expected to be met by the end of the
period specified in the recovery plan, or
30
(ii)
where the statutory funding objective was met on the effective
date of the last actuarial valuation, the statutory funding
objective can be expected to continue to be met for the period for
which the schedule is to be in force.
(7)
Where the statutory funding objective was not met on the effective date of the
35
last actuarial valuation, the trustees or managers must send a copy of the
schedule of contributions to the Regulator within a reasonable period after it is
prepared or, as the case may be, revised.
(8)
Where any requirement of the preceding provisions of this section is not
complied with section 10 of the Pensions Act 1995 (civil penalties) applies to a
40
trustee or manager who has failed to take all reasonable steps to secure
compliance.
(9)
If the actuary is unable to give the certificate required by subsection (6), he
must report the matter in writing to the Regulator within a reasonable period
after the end of the period within which the schedule is required to be prepared
45
or, as the case may be, revised.

Pensions Bill
Part 3 — Scheme funding
140


Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to the actuary
if he fails without reasonable excuse to comply with this subsection.
(10)
The provisions of subsections (1), (3) and (5) to (9) above do not apply in
relation to a schedule of contributions imposed by the Regulator under section
212 or, as the case may be, where such a schedule of contributions is in force.
5
209
Failure to make payments
(1)
This section applies where an amount payable in accordance with the schedule
of contributions by or on behalf of the employer or an active member of a
scheme is not paid on or before the due date.
(2)
If the trustees or managers have reasonable cause to believe that the failure is
10
likely to be of material significance in the exercise by the Regulator of any of its
functions, they must, except in prescribed circumstances, give notice of the
failure to the Regulator and to the members within a resonable period.
(3)
The amount unpaid (whether payable by the employer or not), if not a debt due
from the employer to the trustees or managers apart from this subsection, shall
15
be treated as such a debt.
(4)
Section 10 of the Pensions Act 1995 (civil penalties) applies—
(a)
where subsection (2) above is not complied with, to a trustee or
manager who has failed to take all reasonable steps to secure
compliance with that subsection;
20
(b)
to the employer if he fails without reasonable excuse to make a
payment required of him—
(i)
in accordance with the schedule of contributions, or
(ii)
by virtue of subsection (4) above.
(5)
This section applies in relation to a schedule of contributions imposed by the
25
Regulator under section 212 as in relation to one agreed between the trustees
or managers and the employer.
210
Matters requiring agreement of the employer
(1)
The trustees or managers must obtain the agreement of the employer to—
(a)
any decision as to the methods and assumptions to be used in
30
calculating the scheme’s technical provisions (see section 203(4));
(b)
any matter to be included in the statement of funding principles (see
section 204);
(c)
any recovery plan (see section 207);
(d)
any matter to be included in the schedule of contributions (see section
35
208).
(2)
If it appears to the trustees or managers that it is not otherwise possible to
obtain the employer’s agreement within the prescribed time to any such
matter, they may (if the employer agrees) by resolution modify the scheme as
regards the future accrual of benefits.
40
(3)
Any such modification must be—
(a)
recorded in writing by the trustees or managers, and
(b)
notified to the active members within one month of the modification
taking effect.

Pensions Bill
Part 3 — Scheme funding
141

(4)
If the trustees or managers are unable to reach agreement with the employer
within the prescribed time on any such matter as is mentioned in subsection
(1), they must report the failure in writing to the Regulator within a reasonable
period.
(5)
Where subsection (1), (3) or (4) is not complied with section 10 of the Pensions
5
Act 1995 (c. 26) (civil penalties) applies to a trustee or manager who has failed
to take all reasonable steps to secure compliance.
211
Matters on which advice of actuary must be obtained
(1)
The trustees or managers must obtain the advice of the actuary before doing
any of the following—
10
(a)
making any decision as to the methods and assumptions to be used in
calculating the scheme’s technical provisions (see section 203(4)),
(b)
preparing or revising the statement of funding principles (see section
204),
(c)
preparing or revising a recovery plan (see section 207),
15
(d)
preparing or revising the schedule of contributions (see section 208),
(e)
modifying the scheme as regards the future accrual of benefits under
section 210(2).
(2)
Regulations may require the actuary to comply with any prescribed
requirements when advising the trustees or managers of a scheme on any such
20
matter.
(3)
The regulations may require the actuary to have regard to prescribed guidance.
“Prescribed guidance” means guidance that is prepared and from time to time
revised by a prescribed body and, if the regulations so provide, is approved by
the Secretary of State.
25
(4)
Where subsection (1) is not complied with section 10 of the Pensions Act 1995
(civil penalties) applies to a trustee or manager who has failed to take all
reasonable steps to secure compliance.
212
Powers of the Regulator
(1)
The powers conferred by this section are exercisable where it appears to the
30
Regulator with respect to a scheme (as a result of a report made to it or
otherwise)—
(a)
that the trustees or managers have failed—
(i)
to prepare a statement of funding principles as required by
section 204(1), or
35
(ii)
to review and revise such a statement as required by regulations
under section 204(3)(b);
(b)
that the trustees or managers have failed to obtain an actuarial
valuation as required by section 205(1);
(c)
that the actuary is unable, on an actuarial valuation required by section
40
205(1), to certify the calculation of the scheme’s technical provisions;
(d)
that the trustees or managers—
(i)
have failed to prepare a recovery plan when required to do so
under section 207,
(ii)
have prepared a recovery plan that does not comply with the
45
requirements of that section or any prescribed requirements, or

Pensions Bill
Part 3 — Scheme funding
142

(iii)
have failed to review, revise or replace a recovery plan as
required by subsection (5) of that section;
(e)
that the trustees or managers—
(i)
have failed to prepare a schedule of contributions when
required to do so under section 208, or
5
(ii)
have prepared a schedule of contributions that does not comply
with the requirements of that section or any prescribed
requirements, or
(iii)
have failed to review and revise a schedule of contributions as
required by subsection (3) of that section;
10
(f)
that the actuary is unable to certify a schedule of contributions (see
section 208(6));
(g)
that the employer has failed to make payments in accordance with the
schedule of contributions, or that are required of him by virtue of
section 209(4), and the failure is of material significance;
15
(h)
that the trustees or managers have been unable to reach agreement with
the employer within the prescribed time as to a matter in relation to
which such agreement is required (see section 210(4)).
(2)
In any of those circumstances the Regulator may by order exercise all or any of
the following powers—
20
(a)
it may modify the scheme as regards the future accrual of benefits;
(b)
it may give directions as to—
(i)
the manner in which the scheme’s technical provisions are to be
calculated, including the methods and assumptions to be used
in calculating the scheme’s technical provisions, or
25
(ii)
the period within which, and manner in which, any failure to
meet the statutory funding objective is to be remedied;
(c)
it may impose a schedule of contributions specifying—
(i)
the rates of contributions payable towards the scheme by or on
behalf of the employer and the active members of the scheme,
30
and
(ii)
the dates on or before which such contributions are to be paid.
(3)
In exercising any of the powers conferred by this section the Regulator must
comply with any prescribed requirements.
(4)
The powers conferred by this section are in addition to any other powers
35
exercisable by the Regulator under this Act or the Pensions Act 1995 (c. 26).
Supplementary provisions
213
Power to modify provisions of this Part
Regulations may modify the provisions of this Part as they apply in prescribed
circumstances.
40
214
Construction as one with the Pensions Act 1995
This Part shall be construed as one with Part 1 of the Pensions Act 1995.

Pensions Bill
Part 4 — Financial planning for retirement
143

Part 4
Financial planning for retirement
Retirement planning
215
Promoting and facilitating financial planning for retirement
(1)
The Secretary of State and the Northern Ireland Department may take action
5
for the purpose of promoting or facilitating financial planning for retirement.
(2)
The action may in particular include the provision of facilities for the purpose
of enabling or assisting an individual or a person authorised by him—
(a)
to estimate the financial resources the individual is likely to need after
his retirement;
10
(b)
to estimate the financial resources that are likely to be available to the
individual after his retirement, from pensions and other sources;
(c)
to ascertain what action might be taken with a view to increasing the
financial resources available to the individual after his retirement.
(3)
This section does not authorise the Secretary of State or the Northern Ireland
15
Department to take action which the Secretary of State or the Northern Ireland
Department would otherwise be prohibited from taking under section 21 of the
Financial Services and Markets Act 2000 (c. 8) (restrictions on financial
promotion).
(4)
In this section “the Northern Ireland Department” means the Department for
20
Social Development in Northern Ireland.
216
Supply of information for purposes of section 215
(1)
This section applies to—
(a)
information which is relevant for determining the pensions and other
benefits that may become payable to or in respect of an individual;
25
(b)
information which relates to the financial resources of, or available to,
an individual;
(c)
information which relates to action taken in connection with—
(i)
providing facilities for saving (for retirement or otherwise) by
individuals, or
30
(ii)
promoting or facilitating saving (for retirement or otherwise) by
individuals.
(2)
A person who holds information to which this section applies may supply it
to—
(a)
the Secretary of State or the Northern Ireland Department, or
35
(b)
a person providing services to the Secretary of State or the Northern
Ireland Department,

for use for the purposes of functions under section 215(1).
(3)
Information supplied under subsection (2) must not be supplied by the
recipient except—
40
(a)
if the information relates to an individual—
(i)
to the individual or a person authorised by him;
(ii)
to another person, with the consent of the individual;

Pensions Bill
Part 4 — Financial planning for retirement
144

(b)
in any case—
(i)
to a person to whom it could be supplied under subsection (2);
(ii)
to any person with a view to the institution of relevant criminal
proceedings or otherwise for the purposes of relevant criminal
proceedings.
5
(4)
In subsection (3) “relevant criminal proceedings” means criminal proceedings
under—
(a)
the Pension Schemes Act 1993 (c. 48);
(b)
the Pensions Act 1995 (c. 26);
(c)
this Act;
10
(d)
any enactment in force in Northern Ireland corresponding to an Act
mentioned in any of paragraphs (a) to (c).
(5)
In this section “the Northern Ireland Department” means the Department for
Social Development in Northern Ireland.
217
Use and supply of information: private pensions policy and retirement
15
planning
Schedule 10 (which makes provision about the use and supply of information
for purposes relating to private pensions policy and retirement planning) has
effect.
218
Combined pension forecasts
20
(1)
Regulations may require the trustees or managers of an occupational or
personal pension scheme to provide any member of the scheme with—
(a)
the information specified in subsection (2), together with
(b)
the information specified in subsection (3).
(2)
The information referred to in subsection (1)(a) is information relating to the
25
member which—
(a)
is state pension information for the purposes of section 42 of the Child
Support, Pensions and Social Security Act 2000 (c. 19),
(b)
has been disclosed to the trustees or managers under that section (or,
by virtue of that section, is treated as having been so disclosed), and
30
(c)
is of a description specified in the regulations.
(3)
The information referred to in subsection (1)(b) is information which—
(a)
relates to the pensions and other benefits likely to accrue to the
member, or capable of being secured by him, under the scheme, and
(b)
is of a description specified in the regulations.
35
(4)
Regulations under subsection (1) may require information referred to in that
subsection to be provided at a time or times specified in the regulations.
Employee information and advice
219
Information and advice to employees
(1)
Regulations may require employers to take action for the purpose of enabling
40
employees to obtain information and advice about pensions and saving for
retirement.