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
168

(6)
The employer must comply with a request under subsection (4) within
a reasonable period.
(7)
Where, as a result of the employer’s failure to so comply, the trustees or
managers are unable to discharge the duty imposed by subsection (3),
they must give notice to that effect to the Regulatory Authority within
5
a reasonable period.
(7A)
Where—
(a)
a contribution payable under the direct payment arrangements
has not been paid on or before its due date, and
(b)
the trustees or managers have reasonable cause to believe that
10
the failure to pay the contribution is likely to be of material
significance in the exercise by the Regulatory Authority of any
of their functions,

they must give notice to that effect to the Regulatory Authority and the
employee within a reasonable period after the due date.”
15
(3)
In subsection (8) (employer’s liability for civil penalties) for “subsection (3) or
(5)” substitute “subsection (6) and as a result the trustees or managers of the
scheme are unable to discharge the duty imposed by subsection (3)”.
(4)
In subsection (9) (liability of trustees or managers for civil penalties) for
“subsection (6) or (7)” substitute “subsection (7) or (7A)”.
20
239
Payments made by employers and members to occupational pension schemes
(1)
In section 49 of the Pensions Act 1995 (c. 26) (other responsibilities of trustees,
employers, etc), in subsection (9) (duty of trustee etc to report a failure by
employer to pay contributions deducted from earnings on time) for paragraph
(b) substitute—
25
“(b)
if the trustees or managers have reasonable cause to believe that
the failure is likely to be of material significance in the exercise
by the Authority of any of their functions, they must, except in
prescribed circumstances, give notice of the failure to the
Authority and the member within a reasonable period after the
30
end of the prescribed period under subsection (8).”
(2)
In section 88 of that Act (schedules of payments to money purchase schemes),
for subsection (1) (duty of trustees or managers to report a failure to pay
amounts on time) substitute—
“(1)
Where, in the case of an occupational pension scheme to which section
35
87 applies—
(a)
there is a failure to pay on or before the due date any amounts
payable in accordance with the payment schedule, and
(b)
the trustees or managers have reasonable cause to believe that
the failure is likely to be of material significance in the exercise
40
by the Authority of any of their functions,

they must, except in prescribed circumstances, give notice of the failure
to the Authority and to the members of the scheme within a reasonable
period after the due date.”

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
169

Deficiency in assets of certain occupational pension schemes
240
Debt due from the employer when assets insufficient
(1)
Section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the assets) is
amended as follows.
(2)
For subsections (1) to (4) substitute—
5
“(1)
This section applies in relation to an occupational pension scheme other
than a scheme which is—
(a)
a money purchase scheme, or
(b)
of a prescribed description.
(2)
If—
10
(a)
at any time which falls—
(i)
when a scheme is being wound up, but
(ii)
before any relevant event in relation to the employer
which occurs while the scheme is being wound up,

the value of the assets of the scheme is less than the amount at
15
that time of the liabilities of the scheme, and
(b)
the trustees or managers of the scheme designate that time for
the purposes of this subsection (before the occurrence of an
event within paragraph (a)(ii)),

an amount equal to the difference shall be treated as a debt due from
20
the employer to the trustees or managers of the scheme.

This is subject to subsection (3).
(3)
Subsection (2) applies only if—
(a)
no relevant event has occurred in relation to the employer in the
period beginning with the appointed day and ending with the
25
commencement of the winding up of the scheme, or
(b)
since the date of the last such relevant event but before the end
of that period, a cessation event has occurred in relation to the
scheme.
(4)
Where—
30
(a)
immediately before a qualifying relevant event occurs in
relation to the employer the value of the assets of the scheme is
less than the amount at that time of the liabilities of the scheme,
and
(b)
if the scheme was being wound up immediately before that
35
event, subsection (2) has not applied in relation to the scheme to
treat an amount as a debt due from the employer to the trustees
or managers of the scheme,

an amount equal to the difference shall be treated as a debt due from
the employer to the trustees or managers of the scheme.
40
(4A)
A debt under subsection (4) is to be taken, for the purposes of the law
relating to insolvency as it applies to the employer, to arise
immediately before the occurrence of the qualifying relevant event.
(4B)
Where the scheme was not being wound up immediately before the
qualifying relevant event, the debt due from the employer under
45
subsection (4) is contingent upon—

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
170

(a)
if the qualifying relevant event is within subsection (6C)(a)(i)—
(i)
the occurrence, in relation to the scheme, of an event
within paragraph (a) of subsection (6A) in
circumstances where that event is the first event within
that subsection to occur after the qualifying relevant
5
event, or
(ii)
the commencement of the winding up of the scheme
before any event within subsection (6A) occurs;
(b)
if the qualifying relevant event is within subsection (6C)(a)(ii)—
(i)
the occurrence, in relation to the scheme, of an event
10
within paragraph (a) of subsection (6B) in circumstances
where an event within paragraph (b) of that subsection
had not occurred since the qualifying relevant event, or
(ii)
the commencement of the winding up of the scheme
before any event within subsection (6B) occurs.
15
(3)
In subsection (5) for “subsection (1)” substitute “subsections (2) and (4)”.
(4)
After subsection (6) insert—
“(6A)
The events within this subsection are—
(a)
the issuing of a notice under subsection (2) of section 111 of the
Pensions Act 2004 confirming that a scheme rescue is not
20
possible;
(b)
the issuing of such a notice confirming that a scheme rescue has
occurred;
(c)
the Board ceasing to be involved with the scheme by virtue of
an event within section 132(2)(c) of that Act (withdrawal where
25
no insolvency event likely to occur in six month period or
expiry of six month period without further insolvency event
occurring);
(d)
if, where an insolvency practitioner issues a notice under
section 111(4) of that Act (confirmation of inability to confirm
30
status of scheme), section 132(4) of that Act (Board’s duty to
consider whether to withdraw) does not apply, the issuing of
that notice.
(6B)
The events within this subsection are—
(a)
the issuing of a notice under subsection (2) of section 117 of the
35
Pensions Act 2004 confirming that a scheme rescue is not
possible;
(b)
the issuing of a notice under subsection (3) of that section
confirming that a scheme rescue has occurred.
(6C)
For the purposes of this section—
40
(a)
a relevant event occurs in relation to the employer in relation to
an occupational pension scheme if and when—
(i)
an insolvency event occurs in relation to the employer,
or
(ii)
the trustees or managers of the scheme make an
45
application under subsection (1) of section 116 of the
Pensions Act 2004 or receive a notice from the Board of
the Pension Protection Fund under subsection (5)(a) of
that section,

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
171

(b)
section 110 of the Pensions Act 2004 applies for the purposes of
determining if and when an insolvency event has occurred in
relation to the employer,
(c)
a relevant event (“the current event”) in relation to the employer
is a qualifying relevant event if it occurs on or after the
5
appointed day and either—
(i)
it is the first relevant event in relation to the employer to
occur on or after that day, or
(ii)
since the date of the last relevant event which occurred
before the current event (but not before that day), a
10
cessation event has occurred in relation to the scheme,
(d)
“appointed day” means the day appointed under section 113(2)
of the Pensions Act 2004 (no pension protection under Chapter
3 of Part 2 of that Act if the scheme begins winding up before the
day appointed by the Secretary of State),
15
(e)
“cessation event” means—
(i)
in the case of a relevant event within paragraph (a)(i), an
event within subsection (6A)(b), (c) or (d), and
(ii)
in the case of a relevant event within paragraph (a)(ii),
an event within subsection (6B)(b), and
20
(f)
references to an insolvency event in relation to an employer do
not include an insolvency event which occurred in relation to
him before he became the employer in relation to the scheme.”
(5)
Omit subsection (9).
Pension disputes
25
241
Resolution of disputes
For section 50 of the Pensions Act 1995 (c. 26) (resolution of disputes)
substitute—
“50
Requirement for dispute resolution arrangements
(1)
The trustees or managers of an occupational pension scheme must
30
secure that dispute resolution arrangements are made and
implemented.
(2)
Dispute resolution arrangements are such arrangements as are
required by this section for the resolution of pension disputes.
(3)
For this purpose a pension dispute is a dispute which—
35
(a)
is between—
(i)
the trustees or managers of a scheme, and
(ii)
one or more persons with an interest in the scheme (see
section 50A),
(b)
is about matters relating to the scheme, and
40
(c)
is not an exempted dispute (see subsection (9)).
(4)
The dispute resolution arrangements must provide a procedure—
(a)
for any of the parties to the dispute mentioned in subsection
(3)(a)(ii) to make an application for a decision to be taken on the

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
172

matters in dispute (“an application for the resolution of a
pension dispute”), and
(b)
for the trustees or managers to take that decision.
(5)
Where an application for the resolution of a pension dispute is made in
accordance with the dispute resolution arrangements, the trustees or
5
managers must—
(a)
take the decision required on the matters in dispute within a
reasonable period of the receipt of the application by them, and
(b)
notify the applicant of the decision within a reasonable period
of it having been taken.
10
(6)
The procedure provided for by the dispute resolution arrangements
must include the provision required by section 50B.
(7)
Dispute resolution arrangements under subsection (1) must, in the case
of existing schemes, have effect on and after the date of commencement
of this section in relation to applications made on or after that date.
15
(8)
This section does not apply in relation to an occupational pension
scheme if—
(a)
every member of the scheme is a trustee of the scheme,
(b)
the scheme has no more than one member, or
(c)
the scheme is of a prescribed description.
20
(9)
For the purposes of this section a dispute is an exempted dispute if—
(a)
proceedings in respect of it have been commenced in any court
or tribunal,
(b)
the Pensions Ombudsman has commenced an investigation in
respect of it as a result of a complaint made or a dispute referred
25
to him, or
(c)
it is of a prescribed description.
(10)
If, in the case of an occupational pension scheme, the dispute resolution
arrangements required by this section to be made—
(a)
have not been made, or
30
(b)
are not being implemented,

section 10 applies to any of the trustees or managers who have failed to
take all reasonable steps to secure that such arrangements are made or
implemented.
50A
Meaning of “person with an interest in the scheme”
35
(1)
For the purposes of section 50 a person is a person with an interest in
an occupational pension scheme if—
(a)
he is a member of the scheme,
(b)
he is a widow, widower or surviving dependant of a deceased
member of the scheme,
40
(c)
he is a surviving non-dependant beneficiary of a deceased
member of the scheme,
(d)
he is a prospective member of the scheme,
(e)
he has ceased to be within any of the categories of persons
referred to in paragraphs (a) to (d), or
45
(f)
he claims to be such a person as is mentioned in paragraphs (a)
to (e) and the dispute relates to whether he is such a person.

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Part 5 — Occupational and personal pension schemes: miscellaneous provisions
173

(2)
In subsection (1)(c) a “non-dependant beneficiary”, in relation to a
deceased member of an occupational pension scheme, means a person
who, on the death of the member, is entitled to the payment of benefits
under the scheme.
(3)
In subsection (1)(d) a “prospective member” means any person who,
5
under the terms of his contract of service or the rules of the scheme—
(a)
is able, at his own option, to become a member of the scheme,
(b)
will become so able if he continues in the same employment for
a sufficiently long period,
(c)
will be admitted to the scheme automatically unless he makes
10
an election not to become a member, or
(d)
may be admitted to it subject to the consent of his employer.
50B
The dispute resolution procedure
(1)
The procedure provided for by the dispute resolution arrangements
under section 50 must include the following provision.
15
(2)
The procedure must provide that an application for the resolution of a
pension dispute under section 50(4) may be made or continued on
behalf of a person who is a party to the dispute mentioned in section
50(3)(a)(ii)—
(a)
where the person dies, by his personal representative,
20
(b)
where the person is a minor or is otherwise incapable of acting
for himself, by a member of his family or some other person
suitable to represent him, and
(c)
in any other case, by a representative nominated by him.
(3)
The procedure may include provision about the time limits for making
25
an application for the resolution of a pension dispute but it must
require that—
(a)
in the case of a person with an interest in a scheme as mentioned
in section 50A(1)(e), the time limit for making an application is
the end of the period of six months beginning immediately after
30
the date upon which he ceased to be a person with an interest as
mentioned in section 50A(1)(a), (b), (c) or (d), and
(b)
in the case of a person with an interest in a scheme as mentioned
in section 50A(1)(f) who is claiming to be such a person as is
mentioned in section 50A(1)(e), the time limit for making an
35
application is the end of the period of six months beginning
immediately after the date upon which he claims that he ceased
to be a person with an interest as mentioned in section
50A(1)(a), (b), (c) or (d).
(4)
The procedure must include provision about—
40
(a)
the manner in which an application for the resolution of a
pension dispute is to be made,
(b)
the particulars which must be included in such an application,
and
(c)
the manner in which any decisions required are to be reached
45
and given.
(5)
The procedure must provide that if, after an application for the
resolution of a pension dispute has been made, the dispute becomes an

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
174

exempted dispute within the meaning of section 50(9)(a) or (b), the
resolution of the dispute under the procedure ceases.”
The Pensions Ombudsman
242
The Pensions Ombudsman and Deputy Pensions Ombudsmen
(1)
In subsection (2) of section 145 of the Pension Schemes Act 1993 (c. 48) (the
5
Pensions Ombudsman) after “hold” insert “and vacate”.
(2)
For subsection (3) of that section substitute—
“(3)
The Pensions Ombudsman may resign or be removed from office in
accordance with those terms and conditions.”.
(3)
After that section insert—
10
“145A  Deputy Pensions Ombudsmen
(1)
The Secretary of State may appoint one or more persons to act as a
deputy to the Pensions Ombudsman (“a Deputy Pensions
Ombudsman”).
(2)
Any such appointment is to be upon such terms and conditions as the
15
Secretary of State thinks fit.
(3)
A Deputy Pensions Ombudsman—
(a)
is to hold and vacate office in accordance with the terms and
conditions of his appointment, and
(b)
may resign or be removed from office in accordance with those
20
terms and conditions.
(4)
A Deputy Pensions Ombudsman may perform the functions of the
Pensions Ombudsman—
(a)
during any vacancy in that office,
(b)
at any time when the Pensions Ombudsman is for any reason
25
unable to discharge his functions, or
(c)
at any other time, with the consent of the Secretary of State.
(5)
References to the Pensions Ombudsman in relation to the performance
of his functions are accordingly to be construed as including references
to a Deputy Pensions Ombudsman in relation to the performance of
30
those functions.
(6)
The Secretary of State may—
(a)
pay to or in respect of a Deputy Pensions Ombudsman such
amounts—
(i)
by way of remuneration, compensation for loss of office,
35
pension, allowances and gratuities, or
(ii)
by way of provision for any such benefits,

as the Secretary of State may determine, and
(b)
reimburse the Pensions Ombudsman in respect of any expenses
incurred by a Deputy Pensions Ombudsman in the
40
performance of any of the Pensions Ombudsman’s functions.”