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
175

(4)
In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(c. 24) (other disqualifying offices), after “Pensions Ombudsman” insert “and
any deputy to that Ombudsman appointed under section 145A of the Pension
Schemes Act 1993.”.
(5)
In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification Act
5
1975 (c. 25)(other disqualifying offices), at the appropriate place insert—

“Pensions Ombudsman and any deputy to that Ombudsman
appointed under section 145A of the Pension Schemes Act 1993”.
243
Jurisdiction
(1)
After section 146(4) of the Pension Schemes Act 1993 (c. 48) (power to apply
10
Part 10 of that Act to those concerned with the administration of a scheme)
insert—
“(4A)
For the purposes of subsection (4) a person or body of persons is
concerned with the administration of an occupational or personal
pension scheme where the person or body is responsible for carrying
15
out an act of administration concerned with the scheme.”
(2)
The amendment made by this section has effect in relation to the making of any
provision under section 146(4) of the Pension Schemes Act 1993 applying Part
10 of that Act in relation to a complaint or a dispute in so far as it relates to a
matter which arises on or after the day on which this section comes into force.
20
(3)
For the purposes of subsection (2), a question falling within section 146(1)(g) of
the Pension Schemes Act 1993 is to be treated as a dispute.
244
Investigations
(1)
Omit section 54 of the Child Support, Pensions and Social Security Act 2000
(c. 19) (“the 2000 Act”) (which amends sections 148, 149 and 151 of the Pension
25
Schemes Act 1993 and which has not been brought into force except for the
purpose of making regulations and rules).
(2)
Omit the following provisions of the Pension Schemes Act 1993 —
(a)
section 148(5)(ba) and (bb) as inserted by section 54(2) of the 2000 Act,
(b)
section 149(1), (1A) and (1B) as substituted by section 54(3) of the 2000
30
Act,
(c)
section 149(3)(ba) as substituted by section 54(4) of the 2000 Act,
(d)
section 149(3)(d) and the word “and” immediately preceding it as
inserted by section 54(5) of the 2000 Act,
(e)
section 149(8) as inserted by section 54(6) of the 2000 Act,
35
(f)
section 151(1)(c) and the word “and” immediately preceding it as
inserted by section 54(7) of the 2000 Act,
(g)
section 151(3)(ba) and (bb) as substituted by section 54(8) of the 2000
Act, and
(h)
in section 151(3)(c) the words “any of paragraphs (a) to (bb)” as inserted
40
by section 54(8) of the 2000 Act,

to the extent that those amendments made by section 54 of the 2000 Act have
been brought into force for the purpose of making regulations and rules.

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
176

Pension compensation
245
Amendments relating to the Pensions Compensation Board
(1)
The Pensions Act 1995 (c. 26) is amended as follows.
(2)
In section 80 (review of decisions of the Pensions Compensation Board)—
(a)
after subsection (2) insert—
5
“(2A)
The Compensation Board may also review such a
determination without an application being made.”
(b)
for subsections (4) and (5) substitute—
“(4)
Regulations may make provision—
(a)
with respect to reviews under this section (or any
10
corresponding provision in force in Northern Ireland);
(b)
with respect to applications under subsection (2) (or any
corresponding provision in force in Northern Ireland)
and the procedure to be adopted on any such
application.”
15
(3)
In section 81 (cases where compensation provisions apply), omit subsections
(1)(d), (2A) and (7).
(4)
In section 83 (amount of compensation) for subsections (3) and (4) substitute—
“(3)
The amount of the payment, or (if there is more than one) the aggregate,
must not exceed the aggregate of—
20
(a)
the amount (if any) by which the shortfall at the application date
exceeds the recoveries of value made between the application
date and the settlement date, and
(b)
interest at the prescribed rate for the prescribed period on the
amount of that excess (if any).”
25
Annual increases in rate of pensions
246
Annual increase in rate of certain occupational pensions
(1)
Section 51 of the Pensions Act 1995 (annual increase in rate of certain
occupational pensions) is amended in accordance with subsections (2) to (5).
(2)
In subsection (1) omit “and” at the end of paragraph (a) and for paragraph (b)
30
substitute—
“(b)
the whole, or any part of, the pension is attributable to
pensionable service on or after the appointed day or, in the case
of money purchase benefits, to payments in respect of
employment carried on on or after the appointed day, and
35
(c)
apart from this section—
(i)
the annual rate of the pension, or
(ii)
if only part of the pension is attributable as described in
paragraph (b), so much of the annual rate as is
attributable to that part,
40

would not be increased each year by at least the appropriate
percentage of that rate.”

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
177

(3)
In subsection (4)(b) for “5 per cent per annum” substitute “—
(i)
in the case of a category X pension, 5% per annum, and
(ii)
in the case of a category Y pension, 2.5% per annum.”
(4)
After subsection (4) insert—
“(4A)
For the purposes of this section, a pension is a category X pension if it
5
is—
(a)
a pension which became a pension in payment before the
commencement day, or
(b)
a pension—
(i)
which becomes a pension in payment on or after the
10
commencement day, and
(ii)
the whole of which is attributable to pensionable service
before that day or, in the case of money purchase
benefits, to payments in respect of employment carried
on before that day.
15
(4B)
For the purposes of this section, a pension is a category Y pension if it
is a pension—
(a)
which becomes a pension in payment on or after the
commencement day, and
(b)
the whole of which is attributable to pensionable service on or
20
after the commencement day or, in the case of money purchase
benefits, to payments in respect of employment carried on on or
after that day.
(4C)
For the purposes of applying this section in the case of a pension—
(a)
which becomes a pension in payment on or after the
25
commencement day,
(b)
part of which is attributable to pensionable service before the
commencement day or, in the case of money purchase benefits,
to payments in respect of employment carried on before that
day, and
30
(c)
part of which is attributable to pensionable service on or after
that day or, in the case of money purchase benefits, to payments
in respect of employment carried on on or after that day,

each of those parts of the pension is to be treated as if it were a separate
pension.”
35
(5)
In subsection (5)—
(a)
for “the provisions of subsections (2) and (3)” substitute “any of the
provisions of this section”, and
(b)
in paragraph (a), after “appointed day” insert “or the commencement
day”.
40
(6)
After that section insert—
“51ZA  Meaning of the “appropriate percentage”
(1)
For the purposes of section 51(1)(c) and (2), “the appropriate
percentage” in relation to an increase in the whole or part of the annual
rate of a pension—
45
(a)
in the case of a category X pension, means the revaluation
percentage for the latest revaluation period specified in the

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
178

order under paragraph 2 of Schedule 3 to the Pension Schemes
Act 1993 (revaluation of accrued pension benefits) which is in
force at the time of the increase, and
(b)
in the case of a category Y pension, means whichever is the
lesser of—
5
(i)
the revaluation percentage for the latest revaluation
period specified in the order under paragraph 2 of
Schedule 3 to the Pension Schemes Act 1993 which is in
force at the time of the increase, and
(ii)
2.5%.
10
(2)
In this section “the revaluation percentage” and “the revaluation
period” have the same meaning as in paragraph 2 of Schedule 3 to the
Pension Schemes Act 1993.”
(7)
In section 54(3) of that Act (sections 51 to 53: supplementary), at the
appropriate place insert—
15

““the commencement day” means the day appointed for the coming into
force of section 246 of the Pensions Act 2004 (amendments to section
51);”.
247
Annual increase in rate of certain personal pensions
(1)
Section 162 of the Pensions Act 1995 (c. 26) (annual increase in rate of certain
20
personal pensions) is amended in accordance with subsections (2) and (3).
(2)
In subsection (1) omit “and” at the end of paragraph (a) and for paragraph (b)
substitute—
“(b)
the whole, or any part of, the pension is attributable to
contributions in respect of employment carried on on or after
25
the appointed day, and
(c)
apart from this section—
(i)
the annual rate of the pension, or
(ii)
if only part of the pension is attributable as described in
paragraph (b), so much of the annual rate as is
30
attributable to that part,

would not be increased each year by at least the appropriate
percentage of that rate.”
(3)
After subsection (2) insert—
“(2A)
For the purposes of this section, a pension is a category X pension if it
35
is—
(a)
a pension which became a pension in payment before the
commencement day, or
(b)
a pension—
(i)
which becomes a pension in payment on or after the
40
commencement day, and
(ii)
the whole of which is attributable to contributions in
respect of employment carried on before that day.
(2B)
For the purposes of this section, a pension is a category Y pension if it
is a pension—
45

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
179

(a)
which becomes a pension in payment on or after the
commencement day, and
(b)
the whole of which is attributable to contributions in respect of
employment carried on on or after that day.
(2C)
For the purposes of applying this section in the case of a pension—
5
(a)
which becomes a pension in payment on or after the
commencement day,
(b)
part of which is attributable to contributions in respect of
employment carried on before that day, and
(c)
part of which is attributable to contributions in respect of
10
employment carried on on or after that day,

each of those parts of the pension is to be treated as if it were a separate
pension.”
(4)
After that section insert—
“162A  Meaning of the “appropriate percentage”
15
(1)
For the purposes of section 162(1)(c) and (2), “the appropriate
percentage” in relation to an increase in the whole or part of the annual
rate of a pension—
(a)
in the case of a category X pension, means the revaluation
percentage for the latest revaluation period specified in the
20
order under paragraph 2 of Schedule 3 to the Pension Schemes
Act 1993 (revaluation of accrued pension benefits) which is in
force at the time of the increase, and
(b)
in the case of a category Y pension, means whichever is the
lesser of—
25
(i)
the revaluation percentage for the latest revaluation
period specified in the order under paragraph 2 of
Schedule 3 to the Pension Schemes Act 1993 which is in
force at the time of the increase, and
(ii)
2.5%.
30
(2)
In this section “the revaluation percentage” and “the revaluation
period” have the same meaning as in paragraph 2 of Schedule 3 to the
Pension Schemes Act 1993.”
(5)
In section 163(3) of that Act (section 162: supplementary), at the appropriate
place insert—
35

““the commencement day” means the day appointed for the coming into
force of section 247 of the Pensions Act 2004 (amendments to section
162);”.
248
Power to increase pensions giving effect to pension credits etc
(1)
Section 40 of the Welfare Reform and Pensions Act 1999 (c. 30) (power of the
40
Secretary of State to increase pensions provided to give effect to certain rights)
is amended as follows.
(2)
In subsection (1), for “5%” substitute “the maximum percentage”.
(3)
After subsection (2) insert—
“(2A)
For the purposes of subsection (1) the “maximum percentage” means—
45

Pensions Bill
Part 5 — Occupational and personal pension schemes: miscellaneous provisions
180

(a)
5% in a case where—
(i)
the pension is in payment before the commencement
day, or
(ii)
the pension is not in payment before the commencement
day but the entitlement to the relevant pension credit
5
arose before that day, and
(b)
2.5% in a case where the entitlement to the relevant pension
credit arises on or after the commencement day.”
(4)
In subsection (3), at the appropriate places insert—

““commencement day” means the day appointed for the coming into
10
force of section 248 of the Pensions Act 2004 (amendments to section
40);”

““relevant pension credit” means the pension credit to which the eligible
pension credit rights or, as the case may be, the safeguarded rights
relate.”
15
Revaluation
249
Exemption from statutory revaluation requirement
(1)
Section 84 of the Pension Schemes Act 1993 (c. 48) (basis of revaluation) is
amended as follows.
(2)
In subsection (5), after paragraph (a) insert “or
20
(b)
under any arrangement which maintains the value of the
pension or other benefit by reference to the rise in the retail
prices index during that period,”.
(3)
After that subsection add—
“(6)
In subsection (5)(b), “retail prices index” means—
25
(a)
the general index of retail prices (for all items) published by the
Office for National Statistics; or
(b)
where that index is not published for a month, any substituted
index or figures published by that Office.”
Contracting out
30
250
Meaning of “working life” in Pension Schemes Act 1993
In section 181 of the Pension Schemes Act 1993 (general interpretation), in
subsection (1) for the definition of “working life” substitute—
““working life”, in relation to a person, means the period beginning with
the tax year in which the person attains the age of 16 and ending
35
with—
(a)
the tax year before the one in which the person attains the age
of 65 in the case of a man or 60 in the case of a woman, or
(b)
if earlier, the tax year before the one in which the person dies.”