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374 | Page 161, line 17, leave out “scheme rules” and insert “rules of the scheme” |
|
|
375 | Page 171, line 14, leave out from “scheme” to “to” in line 15 |
|
376 | Page 171, line 15, at end insert “other than a power conferred by— |
|
| (a) | a public service pension scheme, or |
|
| (b) | a prescribed scheme or a scheme of a prescribed description.” |
|
377 | Page 173, line 17, leave out “other entitlement to benefits” and insert “entitlement |
|
| to the present payment of a pension or other benefit” |
|
378 | Page 173, line 23, at end insert— |
|
| “( ) | At any time when the pensionable service of a member of an occupational |
|
| pension scheme is continuing, his subsisting rights are to be determined as |
|
| if he had opted, immediately before that time, to terminate that service.” |
|
379 | Page 173, line 25, leave out from “as” to end of line 36 and insert “overridden by a |
|
| relevant legislative provision, |
|
| (b) | the relevant legislative provisions, to the extent that they have effect |
|
| in relation to the scheme and are not reflected in the rules of the |
|
| |
380 | Page 173, line 41, at end insert— |
|
| “(7A) | For the purposes of subsection (7)— |
|
| (a) | “relevant legislative provision” means any provision contained in |
|
| any of the following provisions— |
|
| (i) | Schedule 5 to the Social Security Act 1989 (equal treatment |
|
| |
| (ii) | Chapters 2 to 5 of Part 4 of the Pension Schemes Act 1993 |
|
| (certain protection for early leavers) or regulations made |
|
| under any of those Chapters; |
|
| (iii) | Part 4A of that Act (requirements relating to pension credit |
|
| benefit) or regulations made under that Part; |
|
| (iv) | section 110(1) of that Act (requirement as to resources for |
|
| annual increase of guaranteed minimum pensions); |
|
| (v) | this Part of this Act (occupational pensions) or subordinate |
|
| legislation made or having effect as if made under this Part; |
|
| (vi) | section 31 of the Welfare Reform and Pensions Act 1999 |
|
| (pension debits: reduction of benefit); |
|
| (vii) | any provision mentioned in section 292(2) of the Pensions |
|
| |
| (b) | a relevant legislative provision is to be taken to override any of the |
|
| provisions of the scheme if, and only if, it does so by virtue of any |
|
| of the following provisions— |
|
| (i) | paragraph 3 of Schedule 5 to the Social Security Act 1989; |
|
| (ii) | section 129(1) of the Pension Schemes Act 1993; |
|
| (iii) | section 117(1) of this Act; |
|
| (iv) | section 31(4) of the Welfare Reform and Pensions Act 1999; |
|
| (v) | section 292(1) of the Pensions Act 2004.” |
|
|
|
|
|
381 | Page 174, line 37, leave out from beginning to “if” in line 40 and insert— |
|
| |
| (a) | the modification is not a protected modification, and |
|
| (b) | before the modification is made the trustees notify an affected |
|
| |
| |
382 | Page 174, line 43, leave out “(b)” and insert “(ii)” |
|
383 | Page 174, line 44, at end insert— |
|
| | “the trustees are to be taken to have complied with subsection (4)(a)(iv) in |
|
| |
384 | Page 175, line 43, leave out “of a prescribed description” and insert “with |
|
| prescribed qualifications or experience or who is approved by the Secretary of |
|
| |
385 | Page 177, line 11, after “not” insert “a protected modification” |
|
|
386 | Page 186, line 23, leave out from “as” to end of line 35 and insert “overridden by a |
|
| relevant legislative provision, |
|
| (b) | the relevant legislative provisions, to the extent that they have effect |
|
| in relation to the scheme and are not reflected in the rules of the |
|
| |
387 | Page 186, line 46, at end insert— |
|
| “(8) | For the purposes of subsection (7)— |
|
| (a) | “relevant legislative provision” means any provision contained in |
|
| any of the following provisions— |
|
| (i) | Schedule 5 to the Social Security Act 1989 (equal treatment |
|
| |
| (ii) | this Chapter or Chapters 2, 3 or 4 of this Part of this Act or |
|
| regulations made under this Chapter or any of those |
|
| |
| (iii) | Part 4A of this Act or regulations made under that Part; |
|
| (iv) | section 110(1) of this Act; |
|
| (v) | Part 1 of the Pensions Act 1995 (occupational pensions) or |
|
| subordinate legislation made or having effect as if made |
|
| |
| (vi) | section 31 of the Welfare Reform and Pensions Act 1999 |
|
| (pension debits: reduction of benefit); |
|
| (vii) | any provision mentioned in section 292(2) of the Pensions |
|
| |
| (b) | a relevant legislative provision is to be taken to override any of the |
|
| provisions of the scheme if, and only if, it does so by virtue of any |
|
| of the following provisions— |
|
| (i) | paragraph 3 of Schedule 5 to the Social Security Act 1989; |
|
| (ii) | section 129(1) of this Act; |
|
| (iii) | section 117(1) of the Pensions Act 1995; |
|
| (iv) | section 31(4) of the Welfare Reform and Pensions Act 1999; |
|
| (v) | section 292(1) of the Pensions Act 2004.” |
|
|
|
|
|
|
|
388 | Insert the following new Clause— |
|
| |
| (1) | For section 73 of the Pensions Act 1995 (c. 26) (preferential liabilities on |
|
| |
| “73 | Preferential liabilities on winding up |
|
| (1) | This section applies where an occupational pension scheme to |
|
| which this section applies is being wound up to determine the order |
|
| in which the assets of the scheme are to be applied towards |
|
| satisfying the liabilities of the scheme in respect of pensions and |
|
| |
| (2) | This section applies to an occupational pension scheme other than |
|
| |
| (a) | a money purchase scheme, or |
|
| (b) | a prescribed scheme or a scheme of a prescribed description. |
|
| (3) | The assets of the scheme must be applied first towards satisfying |
|
| the amounts of the liabilities mentioned in subsection (4) and, if the |
|
| assets are insufficient to satisfy those amounts in full, then— |
|
| (a) | the assets must be applied first towards satisfying the |
|
| amounts of the liabilities mentioned in earlier paragraphs of |
|
| subsection (4) before the amounts of the liabilities |
|
| mentioned in later paragraphs, and |
|
| (b) | where the amounts of the liabilities mentioned in one of |
|
| those paragraphs cannot be satisfied in full, those amounts |
|
| must be satisfied in the same proportions. |
|
| (4) | The liabilities referred to in subsection (3) are— |
|
| |
| (i) | the trustees or managers of the scheme are entitled |
|
| to benefits under a relevant pre-1997 contract of |
|
| insurance entered into in relation to the scheme, and |
|
| (ii) | either that contract may not be surrendered or the |
|
| amount payable on surrender does not exceed the |
|
| liability secured by the contract, |
|
| | the liability so secured; |
|
| (b) | any liability for pensions or other benefits to the extent that |
|
| the amount of the liability does not exceed the |
|
| corresponding PPF liability, other than a liability within |
|
| |
| (c) | any liability for pensions or other benefits which, in the |
|
| opinion of the trustees or managers, are derived from the |
|
| payment by any member of voluntary contributions, other |
|
| than a liability within paragraph (a) or (b); |
|
| (d) | any other liability in respect of pensions or other benefits. |
|
| (5) | For the purposes of subsection (4)— |
|
| | “corresponding PPF liability” in relation to any liability for |
|
| pensions or other benefits means— |
|
|
|
|
|
|
| (a) | where the liability is to a member of the scheme, the |
|
| cost of securing benefits for or in respect of the |
|
| member corresponding to the compensation which |
|
| would be payable to or in respect of the member in |
|
| accordance with the pension compensation |
|
| provisions if the Board of the Pension Protection |
|
| Fund assumed responsibility for the scheme in |
|
| accordance with Chapter 3 of Part 2 of the Pensions |
|
| Act 2004 (pension protection), and |
|
| (b) | where the liability is to another person in respect of |
|
| a member of the scheme, the cost of securing benefits |
|
| for that person corresponding to the compensation |
|
| which would be payable to that person in respect of |
|
| the member in accordance with the pension |
|
| compensation provisions if the Board assumed |
|
| responsibility for the scheme in accordance with that |
|
| |
| | “relevant pre-1997 contract of insurance” means a contract of |
|
| insurance which was entered into before 6th April 1997 with |
|
| a view to securing the whole or part of the scheme’s liability |
|
| |
| (a) | any pension or other benefit payable to or in respect |
|
| of one particular person whose entitlement to |
|
| payment of a pension or other benefit has arisen, and |
|
| (b) | any benefit which will be payable in respect of that |
|
| |
| (6) | For the purposes of this section, when determining the |
|
| corresponding PPF liability in relation to any liability of a scheme |
|
| to, or in respect of, a member for pensions or other benefits, the |
|
| pension compensation provisions apply with such modifications as |
|
| |
| (7) | Regulations may modify subsection (4). |
|
| (8) | For the purposes of that subsection— |
|
| (a) | regulations may prescribe how it is to be determined |
|
| whether a liability for pensions or other benefits which, in |
|
| the opinion of the trustees or managers of the scheme, are |
|
| derived from the payment by any member of voluntary |
|
| contributions falls within paragraph (a) or (b) of that |
|
| |
| (b) | no pension or other benefit which is attributable (directly or |
|
| indirectly) to a pension credit is to be regarded for the |
|
| purposes of paragraph (c) of that subsection as derived from |
|
| the payment of voluntary contributions. |
|
| (9) | Where, on the commencement of the winding up period, a member |
|
| becomes a person to whom Chapter 5 of Part 4 of the Pension |
|
| Schemes Act 1993 (early leavers: cash transfer sums and |
|
| contribution refunds) applies, that Chapter applies in relation to |
|
| him with such modifications as may be prescribed. |
|
| (10) | For the purposes of this section— |
|
| | “assets” of a scheme to which this section applies do not |
|
| include any assets representing the value of any rights in |
|
| respect of money purchase benefits under the scheme rules; |
|
|
|
|
|
|
| | “liabilities” of such a scheme do not include any liabilities in |
|
| respect of money purchase benefits under the scheme rules; |
|
| | “the pension compensation provisions” has the same meaning |
|
| as in Part 2 of the Pensions Act 2004 (see section 153 of that |
|
| |
| | “scheme rules” has the same meaning as in the Pensions Act |
|
| 2004 (see section 303 of that Act); |
|
| | “winding up period”, in relation to an occupational pension |
|
| scheme to which this section applies, means the period |
|
| |
| (a) | begins with the day on which the time immediately |
|
| after the beginning of the winding up of the scheme |
|
| |
| (b) | ends when the winding up of the scheme is |
|
| |
| 73A | Operation of scheme during winding up period |
|
| (1) | This section applies where an occupational pension scheme to |
|
| which section 73 applies is being wound up. |
|
| (2) | During the winding up period, the trustees or managers of the |
|
| |
| (a) | must secure that any pensions or other benefits (other than |
|
| money purchase benefits) paid to or in respect of a member |
|
| are reduced, so far as necessary, to reflect the liabilities of |
|
| the scheme to or in respect of the member which will be |
|
| satisfied in accordance with section 73, and |
|
| (b) | may, for the purposes of paragraph (a), take such steps as |
|
| they consider appropriate (including steps adjusting future |
|
| payments) to recover any overpayment or pay any shortfall. |
|
| (3) | During the winding up period— |
|
| (a) | no benefits may accrue under the scheme rules to, or in |
|
| respect of, members of the scheme, and |
|
| (b) | no new members of any class may be admitted to the |
|
| |
| (4) | Subsection (3) does not prevent any increase, in a benefit, which |
|
| would otherwise accrue in accordance with the scheme or any |
|
| |
| (5) | Subsection (3) does not prevent the accrual of money purchase |
|
| benefits to the extent that they are derived from income or capital |
|
| gains arising from the investment of payments which are made by, |
|
| or in respect of, a member of the scheme. |
|
| (6) | Where a person is entitled to a pension credit derived from another |
|
| person’s shareable rights under the scheme, subsection (3) does not |
|
| prevent the trustees or managers of the scheme discharging their |
|
| liability in respect of the credit under Chapter 1 of Part 4 of the |
|
| Welfare Reform and Pensions Act 1999 (sharing of rights under |
|
| pension arrangements) by conferring appropriate rights under the |
|
| |
|
|
|
|
|
| (7) | Regulations may require the trustees or managers of the scheme, in |
|
| prescribed circumstances— |
|
| (a) | to adjust the entitlement of a person to a pension or other |
|
| benefit under the scheme rules where the entitlement arises |
|
| as a result of a discretionary award which takes effect |
|
| during the winding up period; |
|
| (b) | to adjust the entitlement of a person (“the survivor”) to a |
|
| pension or other benefit under the scheme rules where— |
|
| (i) | a member of the scheme, or a person who was (or |
|
| might have become) entitled to a pension or other |
|
| benefit in respect of a member, dies during the |
|
| |
| (ii) | the survivor’s entitlement is to a pension or other |
|
| benefit in respect of the member (whether arising on |
|
| the date of that death or subsequently). |
|
| (8) | Regulations under subsection (7) may, in particular— |
|
| (a) | prescribe how the required adjustments to entitlement are |
|
| to be determined and the manner in which they are to be |
|
| |
| (b) | in a case where the commencement of the winding up of the |
|
| scheme is backdated (whether in accordance with section |
|
| 145 of the Pensions Act 2004 (requirement to wind up |
|
| schemes with sufficient assets to meet protected liabilities) |
|
| or otherwise), require any adjustment to a person’s |
|
| entitlement to be made with effect from the time the award |
|
| |
| (c) | without prejudice to sections 10(3) to (9), 73B(2) and 116, |
|
| make provision about the consequences of breaching the |
|
| requirements of the regulations. |
|
| (9) | If the scheme confers power on any person other than the trustees |
|
| or managers of the scheme to apply the assets of the scheme in |
|
| respect of pensions or other benefits (including increases in |
|
| pensions or benefits), it cannot be exercised by that person but may, |
|
| subject to the provisions made by or by virtue of this section and |
|
| sections 73 and 73B, be exercised instead by the trustees or |
|
| |
| (10) | For the purposes of this section— |
|
| | “appropriate rights” has the same meaning as in paragraph 5 |
|
| of Schedule 5 to the Welfare Reform and Pensions Act 1999 |
|
| (pension credits: mode of discharge); |
|
| | “discretionary award” means an award of a prescribed |
|
| |
| | “shareable rights” has the same meaning as in Chapter 1 of |
|
| Part 4 of the Welfare Reform and Pensions Act 1999 (sharing |
|
| of rights under pension arrangements); |
|
| and subsection (10) of section 73 applies as it applies for the |
|
| purposes of that section. |
|
| 73B | Sections 73 and 73A: supplementary |
|
| (1) | Any action taken in contravention of section 73A(3) is void. |
|
|
|
|
|
|
| (2) | If any provision made by or by virtue of the winding up provisions |
|
| is not complied with in relation to a scheme to which section 73 |
|
| applies, section 10 applies to any trustee or manager of the scheme |
|
| who has failed to take all reasonable steps to secure compliance. |
|
| (3) | For the purposes of subsection (2), when determining whether |
|
| section 73A(3) has been complied with subsection (1) of this section |
|
| |
| |
| (a) | prescribe how, for the purposes of the winding up |
|
| |
| (i) | the assets and liabilities of a scheme to which section |
|
| |
| (ii) | their value or amount, |
|
| | are to be determined, calculated and verified; |
|
| (b) | modify any of the winding up provisions as it applies— |
|
| (i) | to prescribed schemes or prescribed descriptions of |
|
| |
| (ii) | in relation to a scheme where only part of the |
|
| scheme is being wound up; |
|
| (iii) | in relation to a case where any liability of the scheme |
|
| in respect of a member has been discharged by |
|
| virtue of regulations under section 127(4) of the |
|
| Pensions Act 2004 (power to make regulations |
|
| permitting discharge of scheme’s liabilities during |
|
| |
| (5) | Without prejudice to the generality of subsection (4), regulations |
|
| under paragraph (b)(i) of that subsection may, in particular, modify |
|
| any of the winding up provisions as it applies in relation to a |
|
| scheme in relation to which there is more than one employer. |
|
| (6) | The winding up provisions do not apply— |
|
| (a) | in relation to any liability for an amount by way of pensions |
|
| or other benefits which a person became entitled to payment |
|
| of, under the scheme rules, before commencement of the |
|
| |
| (b) | in prescribed circumstances, in relation to any liability in |
|
| respect of rights of a prescribed description to which a |
|
| member of the scheme became entitled under the scheme |
|
| rules by reason of his pensionable service under the scheme |
|
| terminating before the commencement of the winding up |
|
| |
| (c) | in relation to any liability in respect of rights of prescribed |
|
| descriptions to which a member of the scheme had become |
|
| entitled under the scheme rules before the commencement |
|
| of the winding up period, or |
|
| (d) | in relation to any liability the discharge of which is |
|
| validated under section 128 of the Pensions Act 2004 (power |
|
| to validate actions taken during an assessment period to |
|
| discharge liabilities of a scheme). |
|
| (7) | But nothing in subsection (6) prevents the winding up provisions |
|
| applying in relation to a liability under Chapter 4 of Part 4 of the |
|
| Pension Schemes Act 1993 (transfer values) which— |
|
|