Pensions Bill

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 1 — The Pensions Regulator
28

(a)
is the employer in relation to the scheme at the relevant time, or
(b)
is, at the relevant time, connected with or an associate of the employer.
(6)
A financial support direction must identify all the persons to whom the
direction is issued.
(7)
A time falls within this subsection if it is a time which falls within a prescribed
5
period which ends with the determination by the Regulator to exercise the
power to issue the financial support direction in question.
(8)
For the purposes of subsection (3), a scheme is in existence until it is wound up.
(9)
No duty to which a person is subject is to be regarded as contravened merely
because of any information or opinion contained in a notice given by virtue of
10
subsection (3)(c).

This is subject to section 268 (protected items).
40
Meaning of “service company” and “insufficiently resourced”
(1)
This section applies for the purposes of section 39 (financial support
directions).
15
(2)
A company (“C”) is a “service company” at the relevant time if C’s turnover, as
shown in the latest available accounts for C prepared in accordance with
section 226 of the Companies Act 1985 (c. 6), is solely or principally derived
from amounts charged for the provision of the services of employees of C to
other companies who are members of the same group of companies as C.
20
(3)
The employer in relation to a scheme is insufficiently resourced at the relevant
time if—
(a)
at that time the employer has insufficient net assets to enable it to meet
a prescribed percentage of the estimated section 75 debt in relation to
the scheme, and
25
(b)
there is at that time a person who is connected with, or an associate of,
the employer and who has sufficient net assets to meet that percentage
of that debt.
(4)
For the purposes of subsection (3) a person’s net assets are to be determined,
calculated and verified in a prescribed manner.
30
(5)
In this section the “estimated section 75 debt”, in relation to a scheme, means
the amount which the Regulator estimates to be the amount of the debt which
would become due from the employer to the trustees or managers of the
scheme under section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the
scheme assets) if—
35
(a)
subsection (2) of that section applied, and
(b)
the time designated by the trustees or managers of the scheme for the
purposes of that subsection were the relevant time.
(6)
When calculating the estimated section 75 debt in relation to a scheme under
subsection (5), the amount of any debt due at the relevant time from the
40
employer under section 75 of the Pensions Act 1995 is to be disregarded.
(7)
In this section “the relevant time” has the same meaning as in section 39.

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Part 1 — The Pensions Regulator
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41
Meaning of “financial support”
(1)
For the purposes of section 39 (financial support directions), “financial
support” for a scheme means one or more of the arrangements falling within
subsection (2) the details of which are approved in a notice issued by the
Regulator.
5
(2)
The arrangements falling within this subsection are—
(a)
an arrangement whereby, at any time when the employer is a member
of a group of companies, all the companies who are members of the
group are jointly and severally liable for the employer’s pension
liabilities in relation to the scheme;
10
(b)
an arrangement whereby, at any time when the employer is a member
of a group of companies, a company which meets prescribed
requirements and is the holding company of the group is liable for the
employer’s pension liabilities in relation to the scheme;
(c)
an arrangement which meets prescribed requirements and whereby
15
additional financial resources are provided to the scheme;
(d)
such other arrangements as may be prescribed.
(3)
In subsection (2), “the employer’s pension liabilities” in relation to a scheme
means—
(a)
the liabilities for any amounts payable by or on behalf of the employer
20
towards the scheme (whether on his own account or otherwise) in
accordance with a schedule of contributions under section 208, and
(b)
the liabilities for any debt which is or may become due to the trustees
or managers of the scheme from the employer whether by virtue of
section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the scheme
25
assets) or otherwise.
42
Contribution notices where non-compliance with financial support direction
(1)
This section applies where there is non-compliance with a financial support
direction issued in relation to a scheme under section 39.
(2)
The Regulator may issue a notice to any one or more of the persons to whom
30
the direction was issued stating that the person is under a liability to pay to the
trustees or managers of the scheme the sum specified in the notice (a
“contribution notice”).
(3)
The Regulator may issue a contribution notice to a person only if the Regulator
is of the opinion that it is reasonable to impose liability on the person to pay the
35
sum specified in the notice.
(4)
The Regulator, when deciding for the purposes of subsection (3) whether it is
reasonable to impose liability on a particular person to pay the sum specified
in the notice, must have regard to such matters as the Regulator considers
relevant including, where relevant, the following matters—
40
(a)
whether the person has taken reasonable steps to secure compliance
with the financial support direction,
(b)
the relationship which the person has or has had with the employer
(including, where the employer is a company, whether the person has
or has had control of the employer),
45
(c)
the relationship which the person has or has had with the parties to any
arrangements put in place in accordance with the direction (including,

Pensions Bill
Part 1 — The Pensions Regulator
30

where any of those parties is a company, whether the person has or has
had control of that company),
(d)
any connection or involvement which the person has or has had with
the scheme,
(e)
the financial circumstances of the person, and
5
(f)
such other matters as may be prescribed.
(5)
Subsection (10) of section 435 of the Insolvency Act 1986 (c. 45) (meaning of
control) applies for the purposes of subsection (4) as it applies for the purposes
of that section.
(6)
A contribution notice may not be issued under this section in respect of non-
10
compliance with a financial support direction in relation to a scheme where the
Board of the Pension Protection Fund has assumed responsibility for the
scheme under Chapter 3 of Part 2 (pension protection).
43
The sum specified in a section 42 contribution notice
(1)
The sum specified by the Regulator in a contribution notice under section 42
15
may be either the whole or a specified part of the shortfall sum in relation to
the scheme.
(2)
The shortfall sum in relation to a scheme is—
(a)
in a case where, at the time of non-compliance, a debt was due from the
employer to the trustees or managers of the scheme under section 75 of
20
the Pensions Act 1995 (c. 26) (“the 1995 Act”) (deficiencies in the scheme
assets), the amount which the Regulator estimates to be the amount of
that debt at that time, and
(b)
in a case where, at the time of non-compliance, no such debt was due,
the amount which the Regulator estimates to be the amount of the debt
25
under section 75 of the 1995 Act which would become due if—
(i)
subsection (2) of that section applied, and
(ii)
the time designated by the trustees or managers of the scheme
for the purposes of that subsection were the time of non-
compliance.
30
(3)
For the purposes of this section “the time of non-compliance” means—
(a)
in the case of non-compliance with paragraph (a) of subsection (3) of
section 39 (financial support directions), the time immediately after the
expiry of the period specified in the financial support direction for
putting in place the financial support,
35
(b)
in the case of non-compliance with paragraph (b) of that subsection, the
time when financial support for the scheme ceased to be in place,
(c)
in the case of non-compliance with paragraph (c) of that subsection, the
time when the prescribed event occurred in relation to which there was
the failure to notify the Regulator, or
40
(d)
where more than one of paragraphs (a) to (c) above apply, whichever
of the times specified in the applicable paragraphs the Regulator
determines.
44
Content and effect of a section 42 contribution notice
(1)
This section applies where a contribution notice is issued to a person under
45
section 42.

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Part 1 — The Pensions Regulator
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(2)
The contribution notice must —
(a)
contain a statement of the matters which it is asserted constitute the
non-compliance with the financial support direction in respect of which
the notice is issued, and
(b)
specify the sum which the person is stated to be under a liability to pay.
5
(3)
The sum specified in the notice is to be treated as a debt due from the person
to the trustees or managers of the scheme.
(4)
The Regulator may, on behalf of the trustees or managers of the scheme,
exercise such powers as the trustees or managers have to recover the debt.
(5)
But during any assessment period (within the meaning of section 119) in
10
relation to the scheme, the rights and powers of the trustees or managers of the
scheme in relation to any debt due to them by virtue of a contribution notice,
are exercisable by the Board of the Pension Protection Fund to the exclusion of
the trustees or managers and the Regulator.
(6)
Where, by virtue of subsection (5), any amount is paid to the Board in respect
15
of a debt due by virtue of a contribution notice, the Board must pay the amount
to the trustees or managers of the scheme.
(7)
The contribution notice must identify any other person to whom contribution
notices have been or are issued in respect of the non-compliance in question
and the sums specified in each of those notices.
20
(8)
Where the contribution notice so specifies, the person to whom the notice is
issued (“P”) is to be treated as jointly and severally liable for the debt with any
persons specified in the notice who are persons to whom corresponding
contribution notices are issued.
(9)
For the purposes of subsection (8), a corresponding contribution notice is a
25
notice which—
(a)
is issued in respect of the same non-compliance with the financial
support direction as the non-compliance in respect of which P’s
contribution notice is issued,
(b)
specifies the same sum as is specified in P’s contribution notice, and
30
(c)
specifies that the person to whom the contribution notice is issued is
jointly and severally liable with P for that sum.
(10)
A debt due by virtue of a contribution notice is not to be taken into account for
the purposes of section 75(2) and (4) of the Pensions Act 1995 (c. 26)
(deficiencies in the scheme assets) when ascertaining the amount or value of
35
the assets or liabilities of a scheme.
45
Section 42 contribution notice: relationship with employer debt
(1)
This section applies where a contribution notice is issued to a person under
section 42 and condition A or B is met.
(2)
Condition A is met if, at the time at which the contribution notice is issued,
40
there is a debt due from the employer to the trustees or managers of the scheme
under section 75 of the Pensions Act 1995 (“the 1995 Act”) (deficiencies in the
scheme assets).
(3)
Condition B is met if, after the contribution notice is issued but before the
whole of the debt due by virtue of the notice is recovered, a debt becomes due
45

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Part 1 — The Pensions Regulator
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from the employer to the trustees or managers of the scheme under section 75
of the 1995 Act.
(4)
The Regulator may issue a direction to the trustees or managers of the scheme
not to take any or any further steps to recover the debt due to them under
section 75 of the 1995 Act pending the recovery of all or a specified part of the
5
debt due to them by virtue of the contribution notice.
(5)
If the trustees or managers fail to comply with a direction issued to them under
subsection (4), section 10 of the 1995 Act (civil penalties) applies to any trustee
or manager who has failed to take all reasonable steps to secure compliance.
(6)
Any sums paid—
10
(a)
to the trustees or managers of the scheme in respect of any debt due to
them by virtue of the contribution notice, or
(b)
to the Board in respect of any debt due to it by virtue of the contribution
notice (where it has assumed responsibility for the scheme under
Chapter 3 of Part 2 (pension protection)),
15

are to be treated as reducing the amount of the debt due to the trustees or
managers or, as the case may be, to the Board under section 75 of the 1995 Act.
46
Sections 39 to 45: interpretation
(1)
In sections 39 to 45—

“company” has the meaning given by section 735(1) of the Companies Act
20
1985 (c. 6);

“group of companies” means a holding company and its subsidiaries
within the meaning given by section 736(1) of that Act;

“holding company” has the meaning given by section 736(1) of that Act.
(2)
For the purposes of those sections—
25
(a)
references to a debt due under section 75 of the Pensions Act 1995 (c. 26)
include a contingent debt under that section, and
(b)
references to the amount of such a debt include the amount of such a
contingent debt.
(3)
For the purposes of those sections—
30
(a)
section 249 of the Insolvency Act 1986 (c. 45) (connected persons)
applies as it applies for the purposes of any provision of the first Group
of Parts of that Act,
(b)
section 435 of that Act (associated persons) applies as it applies for the
purposes of that Act, and
35
(c)
section 74 of the Bankruptcy (Scotland) Act 1985 (c. 66) (associated
persons) applies as it applies for the purposes of that Act.
Applications under the Insolvency Act 1986
47
Regulator’s right to apply under section 423 of Insolvency Act 1986
(1)
In this section “section 423” means section 423 of the Insolvency Act 1986
40
(transactions defrauding creditors).
(2)
The Regulator may apply for an order under section 423 in relation to a debtor
if—

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Part 1 — The Pensions Regulator
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(a)
the debtor is the employer in relation to an occupational pension
scheme, and
(b)
condition A or condition B is met in relation to the scheme.
(3)
Condition A is that an actuarial valuation under section 127 obtained by the
Board of the Pension Protection Fund in respect of the scheme indicates that
5
the value of the assets of the scheme at the relevant time, as defined by that
section, was less than the amount of the protected liabilities, as defined by
section 118, at that time.
(4)
Condition B is that an actuarial valuation, as defined by section 205(2),
obtained by the trustees or managers of the scheme indicates that the statutory
10
funding objective in section 203 is not met.
(5)
In a case where the debtor has been adjudged bankrupt or is a body corporate
which is being wound up or in relation to which an administration order is in
force, subsection (2) does not enable an application to be made under section
423 except with the permission of the court.
15
(6)
An application made under this section is to be treated as made on behalf of
every victim of the transaction who is—
(a)
a trustee or member of the scheme, or
(b)
the Board.
(7)
This section does not apply where the valuation mentioned in subsection (3) or
20
(4) is made by reference to a date that falls before the commencement of this
section.
(8)
Expressions which are defined by section 423 for the purposes of that section
have the same meaning when used in this section.
Register of schemes
25
48
Register of occupational and personal pension schemes
(1)
The Regulator must compile and maintain a register of occupational pension
schemes and personal pension schemes which are, or have been, registrable
schemes (referred to in this Act as “the register”).
(2)
In this section and sections 51 to 54 “registrable scheme” means an
30
occupational pension scheme, or a personal pension scheme, of a prescribed
description.
(3)
In respect of each registrable scheme, the Regulator must record in the
register—
(a)
the registrable information most recently provided to it in respect of the
35
scheme, and
(b)
if the Regulator has received—
(i)
a notice under section 51(5) (scheme which is wound up or
ceases to be registrable),
(ii)
a copy of a notice under section 143 (transfer notice), or
40
(iii)
any notice, or copy of a notice, under any provision in force in
Northern Ireland corresponding to a provision mentioned in
sub-paragraph (i) or (ii),

that fact.

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(4)
In respect of each scheme which has been a registrable scheme, but
(a)
has been, or is treated as having been, wound up, or
(b)
has ceased to be a registrable scheme,

the Regulator must maintain in the register the registrable information last
provided to it in respect of the scheme.
5
(5)
Information recorded in the register must be so recorded in such manner as the
Regulator considers appropriate.
(6)
In particular, the register may consist of more than one part.
(7)
In this section—
(a)
references to an occupational pension scheme or a personal pension
10
scheme include such a scheme within the meaning of the Pension
Schemes (Northern Ireland) Act 1993 (c. 49), and
(b)
references to “registrable information”, in relation to a scheme to which
any provision in force in Northern Ireland corresponding to section
49(2) (“the corresponding Northern Ireland provision”) applies, are to
15
information of any description within the corresponding Northern
Ireland provision.
49
Registrable information
(1)
For the purposes of sections 48 to 54 “registrable information”, in relation to an
occupational or personal pension scheme, means information within
20
subsection (2).
(2)
That information is—
(a)
the name of the scheme;
(b)
the address of the scheme;
(c)
the full names and addresses of each of the trustees or managers of the
25
scheme;
(d)
the status of the scheme with respect to the following matters—
(i)
whether new members may be admitted to the scheme;
(ii)
whether further benefits may accrue to, or in respect of,
members under the scheme;
30
(iii)
whether further contributions may be paid towards the scheme;
(iv)
whether any members of the scheme are active members;
(e)
the categories of benefits under the scheme;
(f)
in the case of an occupational pension scheme—
(i)
the name and address of each relevant employer, and
35
(ii)
any other name by which any relevant employer has been
known at any time on or after the relevant date;
(g)
in the case of an occupational pension scheme, the number of members
of the scheme on the later of—
(i)
the last day of the scheme year which ended most recently, and
40
(ii)
the day on which the scheme became a registrable scheme; and
(h)
such other information as may be prescribed.
(3)
Regulations may make provision about the interpretation of any of the
descriptions in subsection (2).
(4)
For the purposes of subsection (2)(f)—
45