Pensions Bill

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 1 — The Board
70

Pension Protection Fund) and the fund maintained under any corresponding
provision in force in Northern Ireland.
(4)
The Board must not appoint an individual or firm as a fund manager unless it
is satisfied—
(a)
in the case of an individual, that the individual has the appropriate
5
knowledge and experience for managing the investments of the
Pension Protection Fund, or
(b)
in the case of a firm, that arrangements are in place to secure that any
individual who will exercise functions which the firm has as fund
manager will, at the time he exercises those functions, have the
10
appropriate knowledge and experience for managing the investments
of that Fund.
103
Investment principles
(1)
The Board must secure—
(a)
that a statement of investment principles is prepared and maintained,
15
and
(b)
that the statement is reviewed at such intervals, and on such occasions,
as may be prescribed and, if necessary, revised.
(2)
In this section “statement of investment principles” means a written statement
of the investment principles governing determinations made by the Board
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about investments.
(3)
Before preparing or revising a statement of investment principles, the Board
must comply with any prescribed requirements.
(4)
A statement of investment principles must be in the prescribed form and cover,
amongst other things, the prescribed matters.
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104
Borrowing
(1)
The Board may—
(a)
borrow from a deposit-taker such sums as it may from time to time
require for exercising any of its functions;
(b)
give security for any money borrowed by it.
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(2)
The Board may not borrow if the effect would be—
(a)
to take the aggregate amount outstanding in respect of the principal of
sums borrowed by it over its borrowing limit, or
(b)
to increase the amount by which the aggregate amount so outstanding
exceeds that limit.
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(3)
In this section—

“borrowing limit” means such limit as the Secretary of State may specify
by order;

“deposit-taker” means—
(a)
a person who has permission under Part 4 of the Financial
40
Services and Markets Act 2000 (c. 8) to accept deposits, or
(b)
an EEA firm of the kind mentioned in paragraph 5(b) of
Schedule 3 to that Act which has permission under paragraph
15 of that Schedule (as a result of qualifying for authorisation
under paragraph 12 of that Schedule) to accept deposits.
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Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 1 — The Board
71

(4)
The definition of “deposit-taker” in subsection (3) must be read with—
(a)
section 22 of the Financial Services and Markets Act 2000 (c. 8),
(b)
any relevant order under that section, and
(c)
Schedule 2 to that Act.
105
Grants
5
The Secretary of State may pay the Board out of money provided by Parliament
such sums as he may determine towards any of its expenses, other than
expenditure which by virtue of section 156(3) or 171(3) is payable out of—
(a)
the Pension Protection Fund, or
(b)
the Fraud Compensation Fund.
10
106
Administration levy
(1)
Regulations may provide for the imposition of a levy (“administration levy”)
in respect of eligible schemes (see section 113) for the purpose of meeting—
(a)
the expenditure of the Secretary of State relating to the establishment of
the Board;
15
(b)
any expenditure of the Secretary of State under section 105.
(2)
An administration levy is payable to the Secretary of State by or on behalf of—
(a)
the trustees or managers of an eligible scheme, or
(b)
any other prescribed person.
(3)
An administration levy is payable at the prescribed rate and at prescribed
20
times.
(4)
Before prescribing a rate under subsection (3), the Secretary of State must
consult the Board.
(5)
An amount payable by a person on account of an administration levy is a debt
due from him to the Secretary of State.
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(6)
An amount so payable is recoverable by the Secretary of State or, if he so
determines, by the Regulator on his behalf.
(7)
Without prejudice to the generality of subsections (1), (5) and (6), regulations
under this section may include provision relating to—
(a)
the collection and recovery of amounts payable by way of levy under
30
this section;
(b)
the circumstances in which any such amount may be waived.
107
Fees
(1)
Regulations may authorise the Board—
(a)
to charge prescribed fees;
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(b)
to charge fees sufficient to meet prescribed costs.
(2)
Regulations under subsection (1) may prescribe, or authorise the Board to
determine, the time at which any fee is due.
(3)
Any fee which is owed to the Board by virtue of regulations under this section
may be recovered as a debt due to the Board.
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Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 2 — Information relating to employer’s insolvency etc
72

Annual reports
108
Annual reports to Secretary of State
(1)
The Board must prepare a report for each financial year.
(2)
Each report—
(a)
must deal with the activities of the Board in the financial year for which
5
it is prepared, and
(b)
must include the report prepared by the Non-Executive Committee
under section 101(6).
(3)
The Board must send each report to the Secretary of State as soon as practicable
after the end of the financial year for which it is prepared.
10
(4)
The Secretary of State must lay before each House of Parliament a copy of
every report received by him under this section.
(5)
In this section “financial year” means—
(a)
the period beginning with the date on which the Board is established
and ending with the next following 31st March, and
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(b)
each successive period of 12 months.
Chapter 2
Information relating to employer’s insolvency etc
Insolvency events
109
Duty to notify insolvency events in respect of employers
20
(1)
This section applies where, in the case of an occupational pension scheme, an
insolvency event occurs in relation to the employer.
(2)
The insolvency practitioner in relation to the employer must give a notice to
that effect within the notification period to—
(a)
the Board,
25
(b)
the Regulator, and
(c)
the trustees or managers of the scheme.
(3)
For the purposes of subsection (2) the “notification period” is the prescribed
period beginning with the later of—
(a)
the insolvency date, and
30
(b)
the date the insolvency practitioner becomes aware of the existence of
the scheme.
(4)
A notice under this section must be in such form and contain such information
as may be prescribed.
110
Insolvency event, insolvency date and insolvency practitioner
35
(1)
In this Part each of the following expressions has the meaning given to it by this
section—

“insolvency event”

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 2 — Information relating to employer’s insolvency etc
73


“insolvency date”

“insolvency practitioner”.
(2)
An insolvency event occurs in relation to an individual where—
(a)
he is adjudged bankrupt or sequestration of his estate has been
awarded;
5
(b)
the nominee in relation to a proposal for a voluntary arrangement
under Part 8 of the Insolvency Act 1986 (c. 45) submits a report to the
court under section 256(1) or 256A(3) of that Act which states that in his
opinion a meeting of the individual’s creditors should be summoned to
consider the debtor’s proposal;
10
(c)
a deed of arrangement made by or in respect of the affairs of the
individual is registered in accordance with the Deeds of Arrangement
Act 1914 (c. 47);
(d)
he executes a trust deed for his creditors or enters into a composition
contract;
15
(e)
he has died and—
(i)
an insolvency administration order is made in respect of his
estate in accordance with an order under section 421 of the
Insolvency Act 1986, or
(ii)
a judicial factor appointed under section 11A of the Judicial
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Factors (Scotland) Act 1889 (c. 39) is required by that section to
divide the individual’s estate among his creditors.
(3)
An insolvency event occurs in relation to a company where—
(a)
the nominee in relation to a proposal for a voluntary arrangement
under Part 1 of the Insolvency Act 1986 submits a report to the court
25
under section 2 of that Act (procedure where nominee is not the
liquidator or administrator) which states that in his opinion meetings
of the company and its creditors should be summoned to consider the
proposal;
(b)
the directors of the company file (or in Scotland lodge) with the court
30
documents and statements in accordance with paragraph 7(1) of
Schedule A1 to that Act (moratorium where directors propose
voluntary arrangement);
(c)
an administrative receiver within the meaning of section 251 of that Act
is appointed in relation to the company;
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(d)
the company enters administration within the meaning of paragraph
1(2)(b) of Schedule B1 to that Act;
(e)
a resolution is passed for a voluntary winding up of the company
without a declaration of solvency under section 89 of that Act;
(f)
a meeting of creditors is held in relation to the company under section
40
95 of that Act (creditors’ meeting which has the effect of converting a
members’ voluntary winding up into a creditors’ voluntary winding
up);
(g)
an order for the winding up of the company is made by the court under
Part 4 or 5 of that Act.
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(4)
An insolvency event occurs in relation to a partnership where—
(a)
an order for the winding up of the partnership is made by the court
under any provision of the Insolvency Act 1986 (as applied by an order
under section 420 of that Act (insolvent partnerships));

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 2 — Information relating to employer’s insolvency etc
74

(b)
sequestration is awarded on the estate of the partnership under section
12 of the Bankruptcy (Scotland) Act 1985 (c. 66) or the partnership
grants a trust deed for its creditors;
(c)
the nominee in relation to a proposal for a voluntary arrangement
under Part 1 of the Insolvency Act 1986 (c. 45) (as applied by an order
5
under section 420 of that Act) submits a report to the court under
section 2 of that Act (procedure where nominee is not the liquidator or
administrator) which states that in his opinion meetings of the
members of the partnership and the partnership’s creditors should be
summoned to consider the proposal;
10
(d)
the members of the partnership file with the court documents and
statements in accordance with paragraph 7(1) of Schedule A1 to that
Act (moratorium where directors propose voluntary arrangement) (as
applied by an order under section 420 of that Act);
(e)
an administration order under Part 2 of the Insolvency Act 1986 (as
15
applied by section 420 of that Act) is made in relation to the
partnership.
(5)
An insolvency event also occurs in relation to a person where an event occurs
which is a prescribed event in relation to such a person.
(6)
Except as provided by subsections (2) to (5), for the purposes of this Part an
20
event is not to be regarded as an insolvency event in relation to a person.
(7)
The Secretary of State may by order amend subsection (4)(e) to make provision
consequential upon any order under section 420 of the Insolvency Act 1986
(insolvent partnerships) applying the provisions of Part 2 of that Act
(administration) as amended by the Enterprise Act 2002 (c. 40).
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(8)
“Insolvency date”, in relation to an insolvency event, means the date on which
the event occurs.
(9)
“Insolvency practitioner”, in relation to a person, means—
(a)
a person acting as an insolvency practitioner, in relation to that person,
in accordance with section 388 of the Insolvency Act 1986,
30
(b)
in such circumstances as may be prescribed, a person of a prescribed
description.
(10)
In this section—

“company” means a company within the meaning given by section 735(1)
of the Companies Act 1985 (c. 6) or a company which may be wound up
35
under Part 5 of the Insolvency Act 1986 (unregistered companies);

“person acting as an insolvency practitioner”, in relation to a person,
includes the official receiver acting as receiver or manager of any
property of that person.
(11)
In applying section 388 of the Insolvency Act 1986 under subsection (9)
40
above—
(a)
the reference in section 388(2)(a) to a permanent or interim trustee in
sequestration must be taken to include a reference to a trustee in
sequestration, and
(b)
section 388(5) (which includes provision that nothing in the section
45
applies to anything done by the official receiver or the Accountant in
Bankruptcy) must be ignored.