Pensions Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Schedule 11 — Deferral of retirement pensions and shared additional pensions
Part 1 — Principal amendments of Social Security Contributions and Benefits Act 1992 (c. 4)
268

      (5)
In this paragraph “incremental period” means any period of six
days which are treated by regulations as days of increment for the
purposes of this paragraph in relation to the person and pension
in question.
      (6)
Where one or more orders have come into force under section 150
5
of the Administration Act during the period of deferment, the rate
for any incremental period shall be determined as if the order or
orders had come into force before the beginning of the period of
deferment.
      (7)
The sums which are the increases in the rates of shared additional
10
pension under this section are subject to alteration by order made
by the Secretary of State under section 150 of the Administration
Act.
Lump sum where entitlement to shared additional pension is deferred
4     (1)
This paragraph applies where—
15
(a)
a person’s entitlement to a shared additional pension is
deferred, and
(b)
the person has made (or is treated as having made) an
election under paragraph 1(1)(b) in relation to the period of
deferment.
20
      (2)
The person is entitled to an amount calculated in accordance with
paragraph 5 (a “lump sum”).
Calculation of lump sum
5     (1)
The lump sum is the accrued amount for the last accrual period
beginning during the period of deferment.
25
      (2)
In this paragraph—
‘accrued amount’ means the amount calculated in
accordance with sub-paragraph (3);
‘accrual period’ means any period of seven days beginning
with a prescribed day of the week, where that day falls
30
within the period of deferment.
      (3)
The accrued amount for an accrual period for a person is—

where—
A is the accrued amount for the previous accrual period (or,
in the case of the first accrual period beginning during the
35
period of deferment, zero);
P is the amount of the shared additional pension to which
the person would have been entitled for the accrual
period if his entitlement had not been deferred;
R is the percentage rate prescribed for the purposes of
40
paragraphs 3A and 7B of Schedule 5.
      (4)
For the purpose of the calculation of the lump sum, the amount of
the shared additional pension to which the person would have
been entitled for an accrual period does not include, in prescribed
circumstances, such amount as may be prescribed.
45

Pensions Bill
Schedule 11 — Deferral of retirement pensions and shared additional pensions
Part 2 — Consequential amendments
269

      (5)
The lump sum must be rounded to the nearest penny, taking any
1/2p as nearest to the next whole penny.”
Part 2
Consequential amendments
Social Security Contributions and Benefits Act 1992 (c. 4)
5
16
The Social Security Contributions and Benefits Act 1992 is amended as
follows.
17
In section 62(1) (graduated retirement benefit)—
(a)
in paragraph (a), for “paragraphs 1 to 3” substitute “paragraphs A1
to 3B and 7C”, and
10
(b)
after paragraph (b) insert—
“(c)
for amending that section in order to make provisions
corresponding to those of paragraphs 3C, 4(1) and
(1A) and 7A to 7C of Schedule 5 to this Act enabling a
widowed person to elect to receive a lump sum,
15
rather than an increase in the weekly rate of
retirement pension, in respect of the graduated
retirement benefit of his or her deceased spouse.”
18
In section 122(1) (interpretation of Parts 1 to 6) for the definitions of
“deferred” and “period of deferment” substitute—
20

“ “deferred” and “period of deferment”—
(a)
in relation to a Category A or Category B retirement pension,
have the meanings given by section 55(3), and
(b)
in relation to a shared additional pension, have the meanings
given by section 55C(3);”.
25
19
In section 176 (parliamentary control of subordinate legislation) in
subsection (1) (affirmative procedure), after paragraph (b) insert—
“(bb)
regulations prescribing a percentage rate for the purposes
of—
(i)
paragraph 3B(3) or 7B(3)of Schedule 5, or
30
(ii)
paragraph 5(3) of Schedule 5A;”.
Social Security Administration Act 1992 (c. 5)
20
The Social Security Administration Act 1992 is amended as follows.
21
In section 150 (annual up-rating of benefits)—
(a)
in subsection (1), after paragraph (d) insert—
35
“(dza)
which are lump sums to which surviving spouses will
become entitled under paragraph 7A of that Schedule
on becoming entitled to a Category A or Category B
retirement pension;”,
(b)
in subsection (1)(da), for “section 55C of” substitute “paragraph 2 of
40
Schedule 5A to”, and
(c)
in subsection (3)(b), after “(d),” insert “(dza)”.
22
In section 151 (up-rating—supplementary) in subsection (2)—

Pensions Bill
Schedule 12 — Minor and consequential amendments
270

(a)
for “subsection (1)(d) or (e)” substitute “subsection (1)(d), (dza) or
(e)”, and
(b)
after “apart from the order and” insert “, in the case of the sums
mentioned in subsection (1)(d) or (e) of that section,”.
Welfare Reform and Pensions Act 1999 (c. 30)
5
23
The Welfare Reform and Pensions Act 1999 is amended as follows.
24
In section 50, omit subsection (2) (which amends provisions relating to the
deferment of shared additional pensions and is superseded by Part 1 of this
Schedule).
25
In section 52(2) (power to make regulations preserving rights in respect of
10
additional pensions), in paragraph (b)—
(a)
after “increase of pension” insert “or payment of lump sum”, and
(b)
after “constituent element of an increase” insert “or of a lump sum”.
Part 3
Transitional provisions
15
Widowers’ entitlement to increase of pension or widowed person’s lump sum
26
In the case of a widower who attains pensionable age before 6th April 2010,
paragraphs 3C, 4 and 7A of Schedule 5 to the Social Security Contributions
and Benefits Act 1992 (c. 4) (entitlement to increase of pension or widowed
person’s lump sum) shall not apply unless he was over pensionable age
20
when his wife died.
Transitional provision
27    (1)
The Secretary of State may by regulations make such transitional provision
as he thinks fit in connection with the coming into force of this Schedule.
      (2)
Regulations under this paragraph may, in particular, modify the preceding
25
provisions of this Schedule in relation to cases where the retirement pension
or shared additional pension of a person is deferred and the period of
deferment begins before 6th April 2005 and continues on or after that day.
      (3)
In this paragraph “deferred” and “period of deferment” are to be read in
accordance with section 55 or 55C of the Social Security Contributions and
30
Benefits Act 1992, as the case requires.
Schedule 12
Section 276

Minor and consequential amendments
Superannuation Act 1972 (c.11)
1     (1)
Schedule 1 to the Superannuation Act 1972 (kinds of employment in relation
35
to which pension schemes may be made) is amended as follows.
      (2)
At the appropriate place in the list of “Other Bodies” insert—

“The Board of the Pension Protection Fund.”, and

Pensions Bill
Schedule 12 — Minor and consequential amendments
271


“The Pensions Regulator.”
      (3)
At the appropriate place in the list of “Offices” insert—

“Chairman of the Board of the Pension Protection Fund.”,
and

“Chairman of the Pensions Regulator.”
5
Social Security Administration Act 1992 (c. 5)
2
In section 122AA of the Social Security Administration Act 1992 (disclosure
of contributions etc information by Inland Revenue), in subsection (2)(d), for
“Occupational Pensions Regulatory Authority” substitute “Pensions
Regulator”.
10
Tribunals and Inquiries Act 1992 (c. 53)
3
In Schedule 1 to the Tribunals and Inquiries Act 1992 (tribunals under
general supervision of the Council on Tribunals), in Part 1, in paragraph 35,
after paragraph (h) insert—

“(i) the Pensions Regulator

15

established by section 1 of the

Pensions Act 2004.

(j) the Pensions Regulator

Tribunal established by section 91

of that Act.

20

(k) the Ombudsman for the Board

of the Pension Protection Fund in

respect of his functions under

section 196 of that Act.”

Pension Schemes Act 1993 (c.48)
25
4
The Pension Schemes Act 1993 is amended as follows.
5
In section 53 (supervision: former contracted-out schemes), after subsection
(1B) insert—
“(1C)
But where a direction under subsection (1) conflicts with a freezing
order made by the Regulatory Authority under section 20 of the
30
Pensions Act 2004 in relation to the scheme then, during the period
for which the freezing order has effect, the direction to the extent that
it conflicts with the freezing order—
(a)
is not binding as described in subsection (1), and
(b)
is not enforceable as described in subsection (1B).”
35
6
In section 99 (trustees’ duties after exercise of option)—
(a)
in subsection (4) after “circumstances,” insert “by direction”, and
(b)
in subsection (4A) for “in relation to applications for extensions
under subsection (4)” substitute “requiring applications for
extensions under subsection (4) to meet prescribed requirements”.
40
7
In section 101J (time for compliance with transfer notice)—

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Schedule 12 — Minor and consequential amendments
272

(a)
in subsection (2) after “circumstances,” insert “by direction”, and
(b)
in subsection (6)(a) for “in relation to applications for extensions
under subsection (2)” substitute “requiring applications for
extensions under subsection (2) to meet prescribed requirements”.
8
In section 111A (monitoring of employers’ payments to personal pension
5
schemes) omit subsection (10).
9
In section 146 (functions of the Pensions Ombudsman)—
(a)
for subsection (1)(f) substitute—
“(f)
any dispute, in relation to a time while section 22 of
the Pensions Act 1995 (circumstances in which
10
Regulator may appoint an independent trustee)
applies in relation to an occupational pension scheme,
between an independent trustee of the scheme
appointed under section 23(1) of that Act and either—
(i)
other trustees of the scheme, or
15
(ii)
former trustees of the scheme who were not
independent trustees appointed under section
23(1) of that Act, and”, and
(b)
in subsection (8), in paragraph (a) of the definition of “independent
trustee” for the words from “section 23(1)(b)” to the end substitute
20
“section 23(1) of the Pensions Act 1995 (appointment of independent
trustee by the Regulatory Authority)”.
10
In section 168(4) (penalties for contravention of regulations) after “the
provision” insert “to be required by notice in writing”.
11
In section 175 (levies)—
25
(a)
for subsection (8) substitute—
“(8)
An amount payable by a person on account of a levy imposed
under this section shall be a debt due from him to the
Secretary of State, and an amount so payable shall be
recoverable by the Secretary of State accordingly or, if the
30
Secretary of State so determines, by the Regulatory Authority
on his behalf.”, and
(b)
in subsection (9) for “subsections (1) and (4)” substitute “subsection
(1)”.
12
In section 178 (power to make regulations as to the persons to be regarded
35
as trustees or managers of schemes for certain purposes), in paragraph (b)
for “to 26C” substitute “to 26”.
13
In section 192(2) (provisions extending to Northern Ireland)—
(a)
for “section 145 (except subsections (4)” substitute “section 145
(except subsections (4A) to (4C)”, and
40
(b)
at the appropriate place insert—

“section 145A,”.
Pensions Act 1995 (c.26)
14
The Pensions Act 1995 is amended as follows.
15
In section 4 (suspension orders), in subsections (3) and (5) for “class”
45
substitute “description”.

Pensions Bill
Schedule 12 — Minor and consequential amendments
273

16
In section 7 (appointment of trustees)—
(a)
in subsection (1) omit “a trustee of such a scheme ceases to be a
trustee”, and
(b)
in subsection (2) for “section 23(1)(b)” in both places substitute
“section 23(1)”.
5
17
In section 9 (removal and appointment of trustees: property), after “exercise”
insert “by order”.
18
In section 10 (civil penalties), in subsection (5)(a) omit “as a trustee of a trust
scheme”.
19
In section 15(4) (failure to comply with Authority’s direction) for “sections 3
10
and 10 apply” substitute “section 10 applies”.
20
In section 22 (circumstances in which independent trustee provisions
apply), in subsections (1) and (3) for “to 26A”, in each place, substitute “to
26”.
21
In section 25 (appointment and powers of independent trustees: further
15
provisions)—
(a)
in subsection (1) for “section 23(1)(b)” substitute “section 23(1)”,
(b)
in subsection (2)—
(i)
after “a scheme” insert “and there is an independent trustee
of the scheme appointed under section 23(1)”, and
20
(ii)
omit from “but if” to the end,
(c)
in subsection (3) for “, no independent trustee of the scheme may”
substitute “and there is an independent trustee of the scheme
appointed under section 23(1), the independent trustee may not”,
and
25
(d)
in subsection (4)—
(i)
for “section 23(1)(b)” substitute “section 23(1)”, and
(ii)
after “person” insert “(within the meaning of section 23(3))”.
22
In section 26 (insolvency practitioner or official receiver to give information
to trustees), in subsection (1) after “a scheme” insert “by virtue of subsection
30
(1) of that section”.
23
Sections 26A to 26C are hereby repealed.
24
In section 28 (consequences of prohibition on trustee being auditor of
scheme etc) omit subsection (4).
25
In section 29 (persons disqualified for being trustees), in subsection (5) for
35
“class” substitute “description”.
26
In section 30 (persons disqualified: consequences)—
(a)
in subsection (2), after “exercise” insert “by order”, and
(b)
omit subsections (7) and (8).
27
Omit section 30A (accessibility of register of disqualified trustees).
40
28
In section 32 (decisions of trustees by a majority)—
(a)
in subsection (4) for “, 16(3)(b) and 25(2)” substitute “and 25(2) of this
Act and section 220(6) of the Pensions Act 2004”, and
(b)
in subsection (5) for “sections 3 and 10 apply” substitute “section 10
applies”.
45

Pensions Bill
Schedule 12 — Minor and consequential amendments
274

29
In section 36 (choosing investments), in subsection (8) for “sections 3 and 10
apply” substitute “section 10 applies”.
30
In section 37 (payment of surplus to employer), in subsection (8) for
“sections 3 and 10 apply” substitute “section 10 applies”.
31
In section 38 (power to defer winding up), in subsection (2)—
5
(a)
in paragraph (a) after “scheme” insert “(other than those due to be
paid before the determination is made)”, and
(b)
in paragraph (b) omit “new”.
32
In section 40 (restriction on employer-related investments), in subsection (4)
for “sections 3 and 10 apply” substitute “section 10 applies”.
10
33
In section 41 (provision of documents for members)—
(a)
for subsection (3) substitute—
“(3)
The documents referred to in subsection (1)(b) are—
(a)
any statement of funding principles prepared or
revised under section 204 of the Pensions Act 2004,
15
(b)
any valuation or report prepared by the actuary
under section 205 of that Act,
(c)
any certificate given by the actuary under section 206
or 208 of that Act.”, and
(b)
in subsection (5B) for “sections 3 and 10 apply to any trustee, and
20
section 10 applies” substitute “section 10 applies to any trustee, and”.
34
In section 47 (professional advisers), in subsections (3), (8) and (11) for
“sections 3 and 10 apply to any trustee, and section 10 applies” substitute
“section 10 applies to any trustee, and”.
35
In section 49 (other responsibilities of trustees, employers, etc)—
25
(a)
in subsection (6) for “sections 3 and 10 apply” substitute “section 10
applies”, and
(b)
in subsection (10)—
(i)
omit paragraph (a) and the word “and” immediately after it,
and
30
(ii)
in paragraph (b) for “such steps” substitute “reasonable steps
to secure compliance”.
36
In section 49A (record of winding up decisions) omit subsection (4).
37
In section 68 (power of trustees to modify schemes by resolution), in
subsection (2)—
35
(a)
in paragraph (b), for “section 16(1) or 17(2)” substitute “section 220 of
the Pensions Act 2004”, and
(b)
for paragraph (c) substitute—
“(c)
to enable the scheme to comply with such terms and
conditions as may be imposed by the Board of the
40
Pension Protection Fund in relation to any payment
made by them under section 168 or 169 of the
Pensions Act 2004,”.
38
In section 69(2) (power to make provision in relation to applications under
that section)—
45
(a)
for “about the manner of dealing with” substitute “requiring”, and