Pensions Bill

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 2 — Information relating to employer’s insolvency etc
75

Status of scheme
111
Insolvency practitioner’s duty to issue notices confirming status of scheme
(1)
This section applies where an insolvency event has occurred in relation to the
employer in relation to an occupational pension scheme
(2)
If an insolvency practitioner in relation to the employer is able to confirm—
5
(a)
that a scheme rescue is not possible, or
(b)
that a scheme rescue has occurred,

he must issue a notice to that effect.
(3)
Subsection (4) applies where—
(a)
in prescribed circumstances, insolvency proceedings in relation to the
10
employer are stayed or come to an end, or
(b)
a prescribed event occurs.
(4)
If a person who was acting as an insolvency practitioner in relation to the
employer immediately before this subsection applies has not been able to
confirm in relation to the scheme—
15
(a)
that a scheme rescue is not possible, or
(b)
that a scheme rescue has occurred,

he must issue a notice to that effect.
(5)
For the purposes of this section—
(a)
a person is able to confirm that a scheme rescue has occurred in relation
20
to an occupational pension scheme if, and only if, he is able to confirm
such matters as are prescribed for the purposes of this paragraph, and
(b)
a person is able to confirm that a scheme rescue is not possible, in
relation to such a scheme if, and only if, he is able to confirm such
matters as are prescribed for the purposes of this paragraph.
25
(6)
Where an insolvency practitioner or former insolvency practitioner in relation
to the employer issues a notice under this section, he must give a copy of that
notice to—
(a)
the Board,
(b)
the Regulator, and
30
(c)
the trustees or managers of the scheme.
(7)
A person must comply with an obligation imposed on him by subsection (2),
(4) or (6) as soon as reasonably practicable.
(8)
Regulations may require notices issued under this section—
(a)
to be in a prescribed form;
35
(b)
to contain prescribed information.
Board’s duties
112
Board’s duty where there is a failure to comply with section 111
(1)
This section applies where, in relation to an occupational pension scheme, the
Board is satisfied that an insolvency practitioner, or former insolvency
40
practitioner, in relation to the employer has failed to issue a notice which he
was required to issue under section 111.

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 3 — Pension protection
76

(2)
The Board must issue a notice in the form in which it ought to have been issued.
(3)
Subject to subsections (4) and (5), a notice issued under subsection (2) has effect
as if it were a notice issued under section 111 by an insolvency practitioner or,
as the case may, former insolvency practitioner in relation to the employer.
(4)
Where a notice is issued under subsection (2), section 111(6) does not apply and
5
the Board must, as soon as reasonably practicable, give a copy of the notice to—
(a)
the Regulator,
(b)
the trustees or managers of the scheme, and
(c)
any insolvency practitioner in relation to the employer, or if there is no
such insolvency practitioner, the employer.
10
(5)
The issuing of a notice under subsection (2) does not have effect to prevent an
insolvency event in relation to the employer being a qualifying insolvency
event within the meaning of any provision of this Part or a qualifying relevant
event within the meaning of section 75 of the Pensions Act 1995 (c. 26) if—
(a)
the event occurs after the failure mentioned in subsection (1), and
15
(b)
had the insolvency practitioner issued the required notice under
section 111, the event would have been a qualifying insolvency event
or, as the case may be, a qualifying relevant event for those purposes.
Chapter 3
Pension protection
20
Eligible schemes
113
Eligible schemes
(1)
In this Part references to an “eligible scheme” are to an occupational pension
scheme which—
(a)
is not a money purchase scheme, and
25
(b)
is not a prescribed scheme or a scheme of a prescribed description.
(2)
A scheme is not an eligible scheme if it is being wound up immediately before
the day appointed by the Secretary of State by order for the purposes of this
subsection.
Circumstances in which Board assumes responsibility for eligible schemes
30
114
Duty to assume responsibility for schemes following insolvency event
(1)
This section applies where a qualifying insolvency event has occurred in
relation to the employer in relation to an eligible scheme.
(2)
The Board must assume responsibility for the scheme in accordance with this
Chapter if—
35
(a)
the value of the assets of the scheme at the relevant time was less than
the amount of the protected liabilities at that time (see sections 118 and
127),

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 3 — Pension protection
77

(b)
after the relevant time an insolvency practitioner in relation to the
employer issues a notice under section 111 confirming that a scheme
rescue is not possible in relation to the scheme, and
(c)
the Board has not ceased to be involved with the scheme (see section
132) in the period beginning with the relevant time and ending with the
5
issuing of that notice.
(3)
For the purposes of this section, in relation to an eligible scheme an insolvency
event (“the current event”) in relation to the employer is a qualifying
insolvency event if—
(a)
it occurs on or after the day appointed under section 113(2),
10
(b)
it—
(i)
is the first insolvency event to occur in relation to the employer
on or after that day, or
(ii)
does not occur within an assessment period (see section 119) in
relation to the scheme which began before the occurrence of the
15
current event, and
(c)
it does not occur in such circumstances as may be prescribed.
(4)
For the purposes of this section—
(a)
the reference in subsection (2)(a) to the assets of the scheme is a
reference to those assets excluding any assets representing the value of
20
any rights in respect of money purchase benefits under the scheme, and
(b)
“the relevant time” means the time immediately before the qualifying
insolvency event occurs.
(5)
This section is subject to sections 130 and 131 (cases where Board must refuse
to assume responsibility for a scheme).
25
115
Duty to assume responsibility for schemes following application or
notification
(1)
This section applies where, in relation to an eligible scheme, the trustees or
managers of the scheme—
(a)
make an application under subsection (1) of section 116 (a “section 116
30
application”), or
(b)
receive a notice from the Board under subsection (5)(a) of that section
(a “section 116 notification”).
(2)
The Board must assume responsibility for the scheme in accordance with this
Chapter if—
35
(a)
the value of the assets of the scheme at the relevant time was less than
the amount of the protected liabilities at that time (see sections 118 and
127),
(b)
after the relevant time the Board issues a notice under section 117
confirming that a scheme rescue is not possible in relation to the
40
scheme, and
(c)
the Board has not ceased to be involved with the scheme (see section
132) in the period beginning with the relevant time and ending with the
issuing of that notice.
(3)
In subsection (2)—
45

Pensions Bill
Part 2 — The Board of the Pension Protection Fund
Chapter 3 — Pension protection
78

(a)
the reference in paragraph (a) to the assets of the scheme is a reference
to those assets excluding any assets representing the value of any rights
in respect of money purchase benefits under the scheme, and
(b)
“the relevant time” means the time immediately before the section 116
application was made or, as the case may be, the section 116 notification
5
was received.
(4)
An application under section 116(1) or notification under section 116(5)(a) is to
be disregarded for the purposes of subsection (1) if it is made or given during
an assessment period (see section 119) in respect of the scheme which began
before the application was made or notification was given.
10
(5)
This section is subject to sections 130 and 131 (cases where Board must refuse
to assume responsibility for a scheme).
116
Applications and notifications for the purposes of section 115
(1)
Where the trustees or managers of an eligible scheme become aware that—
(a)
the employer in relation to the scheme is unlikely to continue as a going
15
concern, and
(b)
the prescribed requirements are met in relation to the employer,

they must make an application to the Board for it to assume responsibility for
the scheme under section 115.
(2)
Where the Board receives an application under subsection (1), it must give a
20
copy of the application to—
(a)
the Regulator, and
(b)
the employer.
(3)
An application under subsection (1) must—
(a)
be in the prescribed form and contain the prescribed information, and
25
(b)
be made within the prescribed period.
(4)
Where the Regulator becomes aware that—
(a)
the employer in relation to an eligible scheme is unlikely to continue as
a going concern, and
(b)
the requirements mentioned in subsection (1)(b) are met in relation to
30
the employer,

it must give the Board a notice to that effect.
(5)
Where the Board receives a notice under subsection (4), it must—
(a)
give the trustees or managers of the scheme a notice to that effect, and
(b)
give the employer a copy of that notice.
35
(6)
The duty imposed by subsection (1) does not apply where the trustees or
managers of an eligible scheme become aware as mentioned in that subsection
by reason of a notice given to them under subsection (5).
(7)
The duty imposed by subsection (4) does not apply where the Regulator
becomes aware as mentioned in that subsection by reason of a copy of an
40
application made by the trustees or managers of the eligible scheme in question
given to the Regulator under subsection (2).
(8)
Regulations may require notices under this section to be in the prescribed form
and contain the prescribed information.