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Amendment Paper as at
Wednesday 19th May 2004

CONSIDERATION OF BILL


PENSIONS BILL

NOTE

The Amendments have been arranged in accordance with the Order of the House [18th May 2004].

NEW CLAUSES AND AMENDMENTS RELATING TO ANY ARRANGEMENTS OTHERWISE THAN THROUGH THE PENSION PROTECTION FUND

Financial assistance scheme for members of certain pension schemes

   

Mr Secretary Smith

NC34

To move the following Clause:—

    '(1)   The Secretary of State must make provision, by regulations, for a scheme for making payments to, or in respect of, qualifying members of qualifying pension schemes ("the financial assistance scheme").

    (2)   For the purposes of this section—

"qualifying member", in relation to a qualifying pension scheme, means a person—

      (a) who, at such time as may be prescribed, is a member of the scheme in respect of whom the scheme's pension liabilities are unlikely to be satisfied in full because the scheme has insufficient assets, or

      (b) who, at such time as may be prescribed, had ceased to be a member of the scheme and in respect of whom the scheme's pension liabilities were not satisfied in full, before he ceased to be such a member, because the scheme had insufficient assets,

       and in respect of whom prescribed conditions are satisfied at such time as may be prescribed;

"qualifying pension scheme" means an occupational pension scheme (including such a scheme which has been fully wound up)—

      (a) which, at such time as may be prescribed, is not—

      (i) a money purchase scheme, or

      (ii) a scheme of a prescribed description,

      (b) the winding up of which began during such period as may be prescribed, and

      (c) the employer in relation to which satisfies such conditions as may be prescribed at such time as may be prescribed;

"scheme's pension liabilities", in respect of a member of a qualifying pension scheme, means the liabilities of the scheme to, or in respect of, the member in respect of pensions or other benefits (including increases in pensions),
    and a qualifying pension scheme has, or had, insufficient assets if the assets of the scheme are, or were, insufficient to satisfy in full the liabilities of the scheme calculated in the prescribed manner.

    (3)   Regulations under subsection (1) may, in particular, make provision—

      (a) for the financial assistance scheme to be managed by the Secretary of State, a body established by or for the purposes of the regulations or such other person as may be prescribed;

      (b) for the person who manages the financial assistance scheme ("the scheme manager") to hold (whether on trust or otherwise), manage and apply a fund in accordance with the regulations or, where the fund is held on trust, the deed of trust;

      (c) for the property, rights and liabilities of qualifying pension schemes to be transferred to the scheme manager in prescribed circumstances and for the trustees or managers of a qualifying pension scheme in respect of which such a transfer has occurred to be discharged from prescribed liabilities;

      (d) prescribing the circumstances in which payments are to be made by the scheme manager to, or in respect of, qualifying members of qualifying pension schemes and the manner in which the amount of any payment is to be determined, and, where the fund is held by the fund manager on trust, the circumstances and manner may be prescribed by reference to the deed of trust;

      (e) authorising the Secretary of State—

      (i) where he is not the scheme manager, to pay grants to the scheme manager;

      (ii) where he is the scheme manager, to pay amounts into the fund held by him in accordance with the regulations;

      (iii) to pay grants to other prescribed persons in connection with the financial assistance scheme;

      (f) prescribing the circumstances in which amounts are to be paid into or out of the fund held by the scheme manager;

      (g) conferring functions in relation to the financial assistance scheme on the Pensions Regulator or the Board of the Pension Protection Fund;

      (h) providing for a person to exercise a discretion in dealing with any matter in relation to the financial assistance scheme;

      (i) applying any provision of Part 1 or 2 with such modifications as may be prescribed;

    and such regulations may make different provision for different cases or descriptions of case and include such incidental, supplementary, consequential or transitional provision as appears to the Secretary of State to be expedient.

    (4)   Any amount which, by virtue of subsection (3)(e), the Secretary of State pays under regulations under subsection (1) is to be to paid out of money provided by Parliament.

    (5)   A time or period prescribed under subsection (2) may fall (or, in the case of a period, wholly or partly fall) at a time before the passing of this Act.

    (6)   Nothing in this section prejudices the operation of section 272 (subordinate legislation (general provisions)).'.


As Amendments to Mr Secretary Smith's proposed New Clause (NC34) (Financial assistance scheme for members of certain pension schemes):

   

Mr Frank Field
Derek Wyatt

(d)

Line     7,     after 'prescribed', insert '(irrespective of the time at which the winding up of the scheme took place)'.

   

Mr Frank Field
Derek Wyatt

(e)

Line     10,     after 'prescribed', insert '(irrespective of the time at which the winding up of the scheme took place)'.

   

Steve Webb
Sue Doughty

(a)

Line     73,     at end add—

    '( )   The first payments from the financial assistance scheme shall be made within six months of the coming into force of this Act;'.

   

Steve Webb
Sue Doughty

(b)

Line     73,     at end add—

    '( )   Schemes where the qualifying pension scheme was closed whilst the sponsoring employer was solvent shall be qualifying pension schemes for the purpose of this section;'.

As an Amendment to Steve Webb's proposed Amendment (b) to Mr Secretary Smith's proposed New Clause (NC34) (Financial assistance scheme for members of certain pension schemes):

         

                     Mr Frank Field
                     Derek Wyatt

      (a)

                     Line     1,     after 'closed', insert 'up until 14th May 2004'.

   

Steve Webb
Sue Doughty

(c)

Line     73,     at end add—

    '( )   Assistance from the financial assistance scheme shall be at least sufficient to provide total benefits to qualifying members as they would have received had their scheme fallen within the scope of the Pension Protection Fund.'.


   

Mr David Willetts
Mr Nigel Waterson
Mr George Osborne
Mr Peter Atkinson
Gregory Barker

212

Page     76,     line     27     [Clause     113],     leave out subsection (2).


   

Mr Secretary Smith

216

Page     192,     line     2     [Clause     265],     leave out second 'and'.

   

Mr Secretary Smith

217

Page     192,     line     3     [Clause     265],     at end insert ', and

      ( ) section [Financial assistance scheme for members of certain pension schemes] (financial assistance scheme for members of certain pension schemes).'.


   

Mr Secretary Smith

218

Page     196,     line     21     [Clause     273],     at end insert—

      '( ) regulations under section [Financial assistance scheme for members of certain pension schemes] (financial assistance scheme for members of certain pension schemes);'.


NEW CLAUSES RELATING TO PART 2

Reviewable ill health pensions

   

Mr Secretary Smith

NC20

To move the following Clause:—

    '(1)   This section applies where there is an assessment period in relation to an eligible scheme.

    (2)   The Board may review a reviewable ill health pension in respect of a member under the scheme if—

      (a) disregarding section [Effect of a review], the member would be entitled to compensation under paragraph 3 of Schedule 7 in respect of the pension if the Board assumed responsibility for the scheme,

      (b) the member did not attain normal pension age in respect of the pension before the assessment date, and

      (c) the pension is attributable to the member's pensionable service under the scheme or another scheme.

    (3)   An ill health pension in respect of a member under the scheme is reviewable for the purposes of subsection (2) if the member is entitled to the pension by reason of an award under the scheme ("the award") which was made—

      (a) in the period of three years ending immediately before the assessment date, or

      (b) before the end of the prescribed period beginning with the assessment date, in response to an application made before that date.

    (4)   Where—

      (a) before the assessment date, an application was made under the scheme for the award of a pension before normal pension age by virtue of any provision of the scheme rules making special provision as to early payment of pension on grounds of ill health, and

      (b) the trustees or managers of the scheme failed to decide the application before the end of the period mentioned in subsection (3)(b),

    section 10 of the Pensions Act 1995 (c.26) (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure that the application was decided before the end of that period.

    (5)   Where—

      (a) the award was made in response to an application which—

      (i) was made on or after the assessment date, or

      (ii) was made before that date but not decided by the trustees or managers of the scheme before the end of the period mentioned in subsection (3)(b), and

      (b) in the absence of this subsection, the award would take effect before the assessment date,

    the award is, for the purposes of determining the compensation payable under this Chapter in a case where the Board assumes responsibility for the scheme, to be treated as taking effect after the date on which the decision to make the award was made.

    (6)   Regulations must prescribe the procedure to be followed in relation to the review of a pension under this section and any subsequent decision under section [Effect of a review].'.

 
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Prepared 19 May 2004