Pensions Bill

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
161

first consent given by an affected member under section 67B(4)(b) in
respect of the modification was given.
67F
The reporting requirement
(1)
For the purposes of section 67(2)(c), the reporting requirement is
satisfied in relation to the exercise of a power to which the subsisting
5
rights provisions apply to make a regulated modification if the trustees
have, in accordance with subsection (2)—
(a)
notified each affected member in whose case the consent
requirements apply in respect of the modification, and
(b)
taken all reasonable steps to notify each affected member in
10
whose case the actuarial equivalence requirements apply in
respect of the modification,

that they have made a determination, or given their consent, for the
purposes of section 67E(1) in relation to the exercise of the power to
make the modification.
15
(2)
The trustees must give (or, where the actuarial equivalence
requirements apply, take all reasonable steps to give) the notification—
(a)
within a reasonable period beginning with the date of the
determination or giving of consent mentioned in subsection (1),
and
20
(b)
before the date on which the modification takes effect.
67G
Powers of the Authority: voidable modifications
(1)
Subsection (2) applies in relation to a regulated modification made in
exercise of a power to which the subsisting rights provisions apply
which is voidable by virtue of—
25
(a)
section 67(2), or
(b)
section 67H(3).
(2)
The Authority may make an order declaring that subsection (6) applies
in relation to the regulated modification.
(3)
An order under subsection (2) relating to a regulated modification may
30
also declare that subsection (6) applies in relation to—
(a)
any other modification of the scheme made by the exercise of
the power mentioned in subsection (1), or
(b)
the grant of any rights under the scheme (whether by virtue of
the attribution of notional periods as pensionable service or
35
otherwise) in connection with the regulated modification.
(4)
An order under subsection (2) relating to a regulated modification must
specify the affected member or affected members or description of
affected members in respect of whom subsection (6) applies (“the
specified persons”).
40
(5)
An order under subsection (2) relating to a regulated modification may
also—
(a)
require the trustees to take, within the time specified in the
order, such steps as are so specified for the purpose of giving
effect to the order;
45

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162

(b)
declare that subsection (7) applies in relation to anything done
by the trustees after the time at which the modification would,
disregarding the order, have taken effect which—
(i)
would not have contravened any provision of the
scheme rules if the modification had taken effect at that
5
time, but
(ii)
as a result of the modification being void to any extent
by virtue of the order, would (but for that subsection)
contravene such a provision.

This is without prejudice to section 174(3).
10
(6)
Where the Authority make an order declaring that this subsection
applies in relation to a modification of a scheme, or the grant of any
rights under the scheme, the modification or grant is void to the extent
specified in the order, and in respect of the specified persons, as from
the time when it would, disregarding the order, have taken effect.
15
(7)
Where, by virtue of subsection (5)(b), the Authority make an order
under subsection (2) declaring that this subsection applies in relation to
anything done by the trustees, that thing is to be taken, for such
purposes as are specified in the order, not to have contravened any
provision of the trust deed or scheme rules.
20
(8)
An order under subsection (2) relating to a regulated modification, or
other modification, of a scheme or the grant of any rights under the
scheme may be made before or after the time at which the modification
or grant would, disregarding the order, have taken effect.
67H
Powers of the Authority to intervene
25
(1)
Subsection (2) applies where the Authority have reasonable grounds to
believe that a power to which the subsisting rights provisions apply—
(a)
will be exercised, or
(b)
has been exercised,

to make a regulated modification in circumstances where the
30
modification will be voidable by virtue of section 67(2).
(2)
The Authority may by order—
(a)
in a case within subsection (1)(a), direct the person on whom the
power is conferred not to exercise the power to make the
regulated modification;
35
(b)
require the trustees to take, within the time specified in the
order, such steps as are so specified for the purpose of securing
that any of the requirements mentioned in section 67(2) is
satisfied.
(3)
A regulated modification made in exercise of a power to which the
40
subsisting rights provisions apply is voidable in accordance with
section 67G if—
(a)
the exercise of the power contravened an order under
paragraph (a) of subsection (2), or
(b)
the trustees fail to comply with a requirement imposed by an
45
order under paragraph (b) of that subsection relating to any
exercise of the power to make the modification.

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67I
Subsisting rights requirements: civil penalties
(1)
Subsections (2) and (3) apply where a regulated modification is
voidable by virtue of section 67(2).
(2)
Where the modification was made by the exercise of a power—
(a)
by the trustees of the scheme, or
5
(b)
by any other person in circumstances which do not fall within
subsection (3),

section 10 applies to any trustee who has failed to take all reasonable
steps to secure that the modification is not so voidable.
(3)
Section 10 applies to any person other than the trustees of the scheme
10
who, without reasonable excuse, exercises a power to make the
modification if—
(a)
the trustees have not given their consent, for the purposes of
section 67E(1), to the exercise of the power to make the
modification, or
15
(b)
in the case of any affected member, the timing requirement is
not satisfied (within the meaning of section 67B) in respect of
the modification.
(4)
Where the trustees fail to comply with any requirement imposed, by
virtue of subsection (5)(a) of section 67G, by an order under subsection
20
(2) of that section, section 10 applies to any trustee who has failed to
take all reasonable steps to secure such compliance.
(5)
Where a regulated modification is made by the exercise of a power in
contravention of an order under section 67H(2)(a)—
(a)
if the power is exercised by the trustees, section 10 applies to
25
any trustee who has failed to take all reasonable steps to secure
that the order was not contravened,
(b)
section 10 applies to any other person who without reasonable
excuse exercises the power in contravention of the order.
(6)
Where the trustees fail to comply with any requirement specified in an
30
order under section 67H(2)(b), section 10 applies to any trustee who has
failed to take all reasonable steps to secure such compliance.”
Short service benefit
234
Increase in age at which short service benefit must be payable
(1)
In section 71 of the Pension Schemes Act 1993 (c. 48) (basic principle as to short
35
service benefit), for subsection (3) substitute—
“(3)
Subject to subsection (4), short service benefit must be made payable as
from an age which is no greater than—
(a)
the age of 65, or
(b)
if in the member’s case normal pension age is greater than 65,
40
normal pension age.”
(2)
In section 72 of that Act (no discrimination between short service and long

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service beneficiaries), at the end add—
“(4)
This section is subject to subsections (3) and (6) of section 71 (age at
which short service benefit is to be payable).”
Safeguarding pension rights
235
Paternity leave and adoption leave
5
(1)
In Schedule 5 to the Social Security Act 1989 (c. 24) (employment-related
schemes for pensions or other benefits: equal treatment), after paragraph 5
insert—
“Unfair paternity leave provisions
5A    (1)
Where an employment-related benefit scheme includes any unfair
10
paternity leave provisions (irrespective of any differences on the
basis of sex in the treatment accorded to members under those
provisions), then—
(a)
the scheme shall be regarded to that extent as not complying
with the principle of equal treatment; and
15
(b)
subject to sub-paragraph (3), this Schedule shall apply
accordingly.
      (2)
In this paragraph “unfair paternity leave provisions”, in relation to
an employment-related benefit scheme, means any provision—
(a)
which relates to continuing membership of, or the accrual of
20
rights under, the scheme during any period of paid paternity
leave in the case of any member who is (or who, immediately
before the commencement of such a period, was) an
employed earner and which treats such a member otherwise
than in accordance with the normal employment
25
requirement; or
(b)
which requires the amount of any benefit payable under the
scheme to or in respect of any such member, to the extent that
it falls to be determined by reference to earnings during a
period which included a period of paid paternity leave, to be
30
determined otherwise than in accordance with the normal
employment requirement.
      (3)
In the case of any unfair paternity leave provision—
(a)
the more favourable treatment required by paragraph 3(1) is
treatment no less favourable than would be accorded to the
35
member in accordance with the normal employment
requirement; and
(b)
paragraph 3(2) does not authorise the making of any such
election as is there mentioned;

but, in respect of any period of paid paternity leave, a member shall
40
only be required to pay contributions on the amount of contractual
remuneration or statutory paternity pay actually paid to or for him
in respect of that period.
      (4)
In this paragraph—
“period of paid paternity leave”, in the case of a member,
45
means a period—

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(a)
throughout which the member is absent from work
in circumstances where sub-paragraph (5), (6) or (7)
applies, and
(b)
for which the employer (or if he is no longer in his
employment, his former employer) pays him any
5
contractual remuneration or statutory paternity pay;
and
“the normal employment requirement” is the requirement that
any period of paid paternity leave shall be treated as if it
were a period throughout which the member in question
10
works normally and receives the remuneration likely to be
paid for doing so.
      (5)
This sub-paragraph applies if—
(a)
the member’s absence from work is due to the birth or
expected birth of a child, and
15
(b)
the member satisfies the conditions prescribed under section
171ZA(2)(a)(i) and (ii) of the Social Security Contributions
and Benefits Act 1992 in relation to that child.
      (6)
This sub-paragraph applies if—
(a)
the member’s absence from work is due to the placement or
20
expected placement of a child for adoption under the law of
any part of the United Kingdom, and
(b)
the member satisfies the conditions prescribed under section
171ZB(2)(a)(i) and (ii) of that Act in relation to that child.
      (7)
This sub-paragraph applies if—
25
(a)
the member’s absence from work is due to the adoption or
expected adoption of a child who has entered the United
Kingdom in connection with or for the purposes of adoption
which does not involve the placement of the child for
adoption under the law of any part of the United Kingdom,
30
and
(b)
the member satisfies the conditions prescribed under section
171ZB(2)(a)(i) and (ii) of that Act (as applied by virtue of
section 171ZK of that Act (adoption cases not involving
placement under the law of the United Kingdom)) in relation
35
to that child.
Unfair adoption leave provisions
5B    (1)
Where an employment-related benefit scheme includes any unfair
adoption leave provisions (irrespective of any differences on the
basis of sex in the treatment accorded to members under those
40
provisions), then—
(a)
the scheme shall be regarded to that extent as not complying
with the principle of equal treatment; and
(b)
subject to sub-paragraph (3), this Schedule shall apply
accordingly.
45
      (2)
In this paragraph “unfair adoption leave provisions”, in relation to
an employment-related benefit scheme, means any provision—
(a)
which relates to continuing membership of, or the accrual of
rights under, the scheme during any period of paid adoption
leave in the case of any member who is (or who, immediately
50

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before the commencement of such a period, was) an
employed earner and which treats such a member otherwise
than in accordance with the normal employment
requirement; or
(b)
which requires the amount of any benefit payable under the
5
scheme to or in respect of any such member, to the extent that
it falls to be determined by reference to earnings during a
period which included a period of paid adoption leave, to be
determined otherwise than in accordance with the normal
employment requirement.
10
      (3)
In the case of any unfair adoption leave provision—
(a)
the more favourable treatment required by paragraph 3(1) is
treatment no less favourable than would be accorded to the
member in accordance with the normal employment
requirement; and
15
(b)
paragraph 3(2) does not authorise the making of any such
election as is there mentioned;

but, in respect of any period of paid adoption leave, a member shall
only be required to pay contributions on the amount of contractual
remuneration or statutory adoption pay actually paid to or for him
20
in respect of that period.
      (4)
In this paragraph—
“period of paid adoption leave”, in the case of a member,
means a period—
(a)
throughout which the member is absent from work
25
in circumstances where sub-paragraph (5) or (6)
applies, and
(b)
for which the employer (or, if he is no longer in his
employment, his former employer) pays him any
contractual remuneration or statutory adoption pay;
30
and
“the normal employment requirement” is the requirement that
any period of paid adoption leave shall be treated as if it
were a period throughout which the member in question
works normally and receives the remuneration likely to be
35
paid for doing so.
      (5)
This sub-paragraph applies if—
(a)
the member’s absence from work is due to the placement, or
expected placement, of a child for adoption under the law of
any part of the United Kingdom, and
40
(b)
the member is a person with whom the child is, or is expected
to be, placed for such adoption.
      (6)
This sub-paragraph applies if—
(a)
the member’s absence from work is due to the adoption or
expected adoption of a child who has entered the United
45
Kingdom in connection with or for the purposes of adoption
which does not involve the placement of the child for
adoption under the law of any part of the United Kingdom,
and
(b)
the member is a person by whom the child has been or is
50
expected to be adopted.”

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(2)
The provision that may be made under section 142(1) of the Adoption and
Children Act 2002 (c. 38) (power to make consequential etc provision to give
full effect to any provision of that Act) includes provision modifying
paragraph 5A or 5B of Schedule 5 to the Social Security Act 1989 (c. 24) (as
inserted by subsection (1) above).
5
236
Inalienability of occupational pension
(1)
Section 91 of the Pensions Act 1995 (c. 26) (inalienability of occupational
pension) is amended as follows.
(2)
In subsection (5) (exceptions to the rule of inalienability) at the end insert—
“(f)
subject to subsection (6), a charge or lien on, or set-off against,
10
the person in question’s entitlement, or right, for the purpose of
discharging some monetary obligation due from the person in
question to the scheme arising out of a payment made in error
in respect of the pension.”
(3)
In subsection (6) (limits on the charge, lien or set-off under subsection (5)(d) or
15
(e)) for “or (e)” substitute “, (e) or (f)”.
Voluntary contributions
237
Voluntary contributions
(1)
Omit section 111 of the Pension Schemes Act 1993 (c. 48) (requirements for
schemes to provide facilities for members to pay voluntary contributions, and
20
relating to any such contributions).
(2)
In section 132 of that Act (duty to bring schemes into conformity with
indirectly-applying requirements) omit from “or the voluntary” to third
“requirements”.
(3)
In section 181(1) of that Act (general interpretation) omit the definition of
25
“voluntary contributions requirements”.
Payments by employers
238
Payments made by employers to personal pension schemes
(1)
Section 111A of the Pension Schemes Act 1993 (monitoring of employers’
payments to personal pension schemes) is amended as follows.
30
(2)
For subsections (3) to (7) substitute—
“(3)
The trustees or managers of the scheme must monitor the payment of
contributions by or on behalf of the employer under the direct payment
arrangements.
(4)
The trustees or managers may request the employer to provide them,
35
(or arrange for them to be provided) with the payment information
specified in the request.
(5)
For the purposes of subsection (4) “payment information” is
information required by the trustees or managers to enable them to
discharge the duty imposed by subsection (3).
40