Pensions Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
145

(2)
Regulations under subsection (1) may in particular—
(a)
provide that they are to apply in relation to employers of a prescribed
description and employees of a prescribed description;
(b)
make different provision for different descriptions of employers and
employees;
5
(c)
make provision as to the action to be taken by employers (including the
frequency at which, and the time and place at which, action is to be
taken);
(d)
make provision as to the description of information and advice in
relation to which requirements apply;
10
(e)
make provision about the description of person authorised to provide
any such information and advice.
(3)
Employers to whom regulations under subsection (1) apply must provide
information to the Regulator about the action taken by them for the purpose of
complying with the regulations.
15
(4)
Regulations may make provision as to—
(a)
the information to be provided under subsection (3);
(b)
the form and manner in which the information is to be provided;
(c)
the period within which the information is to be provided.
(5)
Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any person
20
who, without reasonable excuse, fails to comply with subsection (3).
(6)
In this section “employer” means any employer, whether or not resident or
incorporated in any part of the United Kingdom.
Part 5
Occupational and personal pension schemes: miscellaneous provisions
25
Requirements for member-nominated trustees and directors
220
Requirement for member-nominated trustees
(1)
The trustees of an occupational trust scheme must secure—
(a)
that, within a reasonable period of the commencement date,
arrangements are in place which provide for at least one-third of the
30
total number of trustees to be member-nominated trustees, and
(b)
that those arrangements are implemented.
(2)
“Member-nominated trustees” are trustees of an occupational trust scheme
who—
(a)
are nominated as the result of a process in which at least all the active
35
members of the scheme are eligible to participate, and
(b)
are selected by some or all of the members of the scheme.
(3)
The “commencement date”, in relation to a scheme, is—
(a)
the date upon which this section first applies in relation to the scheme,
or
40
(b)
in the case of a scheme to which this section has ceased to apply and
then reapplies, the date on which the section reapplies to it.

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
146

(4)
The arrangements may provide for a greater number of member-nominated
trustees than that required to satisfy the one-third minimum mentioned in
subsection (1)(a) only if the employer has approved the greater number.
(5)
The arrangements—
(a)
must provide for the nomination and selection process to take place
5
within a reasonable period of any requirement arising under the
arrangements to appoint a member-nominated trustee,
(b)
must provide, where a vacancy is not filled because insufficient
nominations are received, for the nomination and selection process to
be repeated at reasonable intervals until the vacancy is filled,
10
(c)
must provide that where the employer so requires, a person who is not
a member of the scheme must have the employer’s approval to qualify
for selection as a member-nominated trustee, and
(d)
subject to paragraph (c), may provide that, where the number of
nominations received is equal to or less than the number of
15
appointments required, the nominees are deemed to be selected.
(6)
The arrangements must provide that the removal of a member-nominated
trustee requires the agreement of all the other trustees.
(7)
Nothing in the arrangements or in the provisions of the scheme may exclude
member-nominated trustees from the exercise of functions exercisable by other
20
trustees by reason only of the fact that they are member-nominated trustees.
(8)
This section does not apply in relation to an occupational trust scheme if—
(a)
every member of the scheme is a trustee of the scheme and no other
person is such a trustee,
(b)
every trustee of the scheme is a company, or
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(c)
the scheme is of a prescribed description.
(9)
If, in the case of an occupational trust scheme, the arrangements required by
subsection (1)—
(a)
are not in place as required by subsection (1)(a), or
(b)
are not being implemented,
30

section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee
who has failed to take all reasonable steps to secure compliance.
221
Requirement for member-nominated directors of corporate trustees
(1)
Where a company is a trustee of an occupational trust scheme and every
trustee of the scheme is a company, the company must secure—
35
(a)
that, within a reasonable period of the commencement date,
arrangements are in place which provide for at least one-third of the
total number of directors of the company to be member-nominated
directors, and
(b)
that those arrangements are implemented.
40
(2)
“Member-nominated directors” are directors who—
(a)
are nominated as the result of a process in which at least all the active
members of the occupational trust scheme are eligible to participate,
and
(b)
are selected by some or all of the members of that scheme.
45
(3)
The “commencement date”, in relation to a company, is—

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
147

(a)
the date upon which this section first applies in relation to the
company, or
(b)
in the case of a company to which this section has ceased to apply and
then reapplies, the date on which the section reapplies to it.
(4)
The arrangements may provide for a greater number of member-nominated
5
directors than that required to satisfy the one-third minimum mentioned in
subsection (1)(a) only if the employer has approved the greater number.
(5)
The arrangements—
(a)
must provide for the nomination and selection process to take place
within a reasonable period of any requirement arising under the
10
arrangements to appoint a member-nominated director,
(b)
must provide, where a vacancy is not filled because insufficient
nominations are received, for the nomination and selection process to
be repeated at reasonable intervals until the vacancy is filled,
(c)
must provide that where the employer so requires, a person who is not
15
a member of the scheme must have the employer’s approval to qualify
for selection as a member-nominated director, and
(d)
subject to paragraph (c), may provide that, where the number of
nominations received is equal to or less than the number of
appointments required, the nominees are deemed to be selected.
20
(6)
The arrangements must provide that the removal of a member-nominated
director requires the agreement of all the other directors.
(7)
Nothing in the arrangements may exclude member-nominated directors from
the exercise of functions exercisable by other directors by reason only of the
fact that they are member-nominated directors.
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(8)
Where the same company is a trustee of two or more occupational trust
schemes by reference to each of which this section applies to the company, then
subject to subsection (9), the preceding provisions of this section have effect as
if—
(a)
the schemes were a single scheme,
30
(b)
the members of each of the schemes were members of that single
scheme, and
(c)
the references to “the employer” were references to all the employers in
relation to the schemes.
(9)
Where, apart from this subsection, subsection (8) would apply in relation to a
35
company, the company may elect that subsection (8)—
(a)
is not to apply as mentioned in that subsection, or
(b)
is to apply but only in relation to some of the schemes to which it would
otherwise apply.
(10)
This section does not apply in relation to an occupational trust scheme if the
40
scheme is of a prescribed description.
(11)
If, in the case of a company which is a trustee of an occupational trust scheme,
the arrangements required by subsection (1)—
(a)
are not in place as required by subsection (1)(a), or
(b)
are not being implemented,
45

section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to the
company.

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
148

222
Member-nominated trustees and directors: supplementary
(1)
Regulations may modify sections 220 and 221 in their application to prescribed
cases.
(2)
In sections 220 and 221—

“company” means a company within the meaning given by section 735(1)
5
of the Companies Act 1985 (c. 6) or a company which may be wound up
under Part 5 of the Insolvency Act 1986 (c. 45) (unregistered
companies);

“occupational trust scheme” means an occupational pension scheme
established under a trust.
10
Obligations of trustees of occupational pension schemes
223
Investment principles
For section 35 of the Pensions Act 1995 (c. 26) (investment principles)
substitute—
“35
Investment principles
15
(1)
The trustees of a trust scheme must secure—
(a)
that a statement of investment principles is prepared and
maintained for the scheme, and
(b)
that the statement is reviewed at such intervals, and on such
occasions, as may be prescribed and, if necessary, revised.
20
(2)
In this section “statement of investment principles”, in relation to a trust
scheme, means a written statement of the investment principles
governing decisions about investments for the purposes of the scheme.
(3)
Before preparing or revising a statement of investment principles, the
trustees of a trust scheme must comply with any prescribed
25
requirements.
(4)
A statement of investment principles must be in the prescribed form
and cover, amongst other things, the prescribed matters.
(5)
Neither a trust scheme nor a statement of investment principles may
impose restrictions (however expressed) on any power to make
30
investments by reference to the consent of the employer.
(6)
If in the case of a trust scheme—
(a)
a statement of investment principles has not been prepared, is
not being maintained or has not been reviewed or revised, as
required by this section, or
35
(b)
the trustees have not complied with the obligation imposed on
them by subsection (3),

section 10 applies to any trustee who has failed to take all reasonable
steps to secure compliance.
(7)
Regulations may provide that this section is not to apply to any scheme
40
which is of a prescribed description.”