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Standing Committee Debates
Pensions Bill

Pensions Bill

Column Number: 733

Standing Committee B

Tuesday 27 April 2004

(Morning)

[Mr. Win Griffiths in the Chair]

Pensions Bill

New Clause 2

Effect of determination to wind up scheme on freezing order

No. NC2, to move the following Clause:—

    '(1) This section applies where—

    (a) the Regulator determines to make an order under section 11 of the Pensions Act 1995 (c.26) (power to wind up occupational pension schemes) in relation to a scheme (''a winding up order''),

    (b) that determination is made during the period for which a freezing order has effect in relation to the scheme,

    (c) the case is not one to which the special procedure in section 72 applies (immediate exercise of powers where immediate risk to assets etc), and

    (d) the winding up order accordingly cannot be made until the expiry of the period specified in section 70(4) (no exercise during period of referral to the Tribunal etc).

    (2) In such a case the freezing order is to continue to have effect until—

    (a) where the winding up order is made, it ceases to have effect under section 24 from the time when that order is made, or

    (b) the determination to make the winding up order is revoked.

    (3) Subsection (2) is subject to the Regulator's power under section 75 to revoke the freezing order at any time.'.—[Malcolm Wicks.]

9.30 am

Brought up, read the First and Second time, and added to the Bill.

New Clause 3

Reports by skilled persons

No. NC3, to move the following Clause:—

    '(1) The Regulator may issue a notice (a ''report notice'') to—

    (a) the trustees or managers of a work-based pension scheme,

    (b) any employer in relation to such a scheme, or

    (c) any person who is otherwise involved in the administration of such a scheme,

    requiring them or, as the case may be, him to provide the Regulator with a report on one or more specified matters which are relevant to the exercise of any of the Regulator's functions.

    (2) A report notice must require the person appointed to make the report to be a person—

    (a) nominated or approved by the Regulator, and

    (b) appearing to the Regulator to have the skills necessary to make a report on the matter or matters concerned.

    (3) A report notice may require the report to be provided to the Regulator—

    (a) in a specified form;

    (b) before a specified date.

    (4) The costs of providing a report in accordance with a report notice must be met by the person to whom the notice is issued (''the notified person'').

Column Number: 734

    (5) But a report notice may require a specified person (other than the Regulator) to reimburse to the notified person the whole or any part of the costs of providing the report.

    (6) Where, by virtue of subsection (5), an amount is required to be reimbursed by a specified person to the notified person, that amount is to be treated as a debt due from the specified person to the notified person.

    (7) If the trustees or managers of a work-based pension scheme fail to comply with a report notice issued to them, 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 compliance.

    (8) That section also applies to any other person who, without reasonable excuse, fails to comply with a report notice issued to him.

    (9) Where a report notice is issued, any person who is providing (or who at any time has provided) services to the notified person in relation to a matter on which the report is required must give the person appointed to make the report such assistance as he may reasonably require.

    (10) The duty imposed by subsection (9) is enforceable, on the application of the Regulator, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988 (c. 36).

    (11) In this section—

    ''specified'', in relation to a report notice, means specified in the notice;

    ''work-based pension scheme'' has the same meaning as in section 5 (Regulator's objectives).'.—[Malcolm Wicks.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 10

Schemes required to wind up but unable to buy out liabilities

No. NC10, to move the following Clause:—

    '(1) This section applies where section 120(2) or (2A) (scheme rescue not possible but scheme has sufficient assets to meet the protected liabilities) applies in relation to an eligible scheme.

    (2) If the trustees or managers of the scheme are unable to obtain a full buy-out quotation, they must, within the authorised period, apply to the Board for authority to continue as a closed scheme.

    (3) For the purposes of determining whether they must make an application under subsection (2), the trustees and managers of the scheme must take all reasonable steps to obtain a full buy-out quotation in respect of the scheme.

    (4) An application under subsection (2) must—

    (a) be in the prescribed form and contain the prescribed information, and

    (b) be accompanied by evidence in the prescribed form which shows that the trustees or managers of the scheme have complied with the obligation under subsection (3) but were unable to obtain a full buy-out quotation.

    (5) Where the Board receives an application under subsection (2), if it is satisfied that the trustees or managers have complied with the obligation under subsection (3) but were unable to obtain a full buy-out quotation, it must authorise the scheme to continue as a closed scheme.

    (6) Where the Board determines an application in respect of a scheme under this section, it must issue a determination notice and give a copy of that notice to—

    (a) the trustees or managers of the scheme, and

    (b) the Regulator.

    (7) In this section—

    ''authorised period'' has the same meaning as in section 120;

    ''determination notice'' means a notice which is in the prescribed form and contains such information about the determination as may be prescribed;

Column Number: 735

    ''full buy-out quotation'', in relation to a scheme, means a quotation for one or more annuities from one or more insurers (being companies willing to accept payment in respect of the members from the trustees or managers of the scheme) which would provide in respect of each member of the scheme, from a relevant date, benefits in accordance with the member's entitlement or accrued rights, including pension credit rights, under the scheme (other than his entitlement or rights in respect of money purchase benefits);

    ''pension credit rights'' has the meaning given in section 124(1) of the Pensions Act 1995;

    ''relevant date'' means a date within the authorised period.

    (8) If the trustees or managers of the scheme fail to comply with subsection (2) or (3), section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.'.—[Malcolm Wicks.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 11

Treatment of closed schemes required to wind up

No. NC11, to move the following Clause:—

    '(1) In this section ''closed scheme'' means an eligible scheme which is authorised under section [schemes required to wind up but unable to buy out liabilities] to continue as a closed scheme.

    (2) The provisions mentioned in subsection (3) apply in relation to a closed scheme at any time when the trustees or managers of the scheme are required to wind up or continue winding up the scheme under section 119 as if that time fell within an assessment period in relation to the scheme.

    (3) The provisions are—

    (a) section 105 (admission of new members, payment of contributions etc);

    (b) section 106 (directions);

    (c) section 109 (Board to act as creditor of the employer).

    (4) Section 105, as it applies by virtue of subsection (2), does not preclude the admission to a closed scheme of new pension credit members (within the meaning of section 124(1) of the Pensions Act 1995).'.—[Malcolm Wicks.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 12

Valuations of closed schemes

No. NC12, to move the following Clause:—

    '(1) Regulations may make provision requiring the trustees or managers of closed schemes to obtain actuarial valuations of the scheme at such intervals as may be prescribed for the purposes of enabling them to determine—

    (a) the benefits payable under the scheme;

    (b) whether to make an application under section [applications and notifications where closed schemes have insufficient assets].

    (2) Regulations under this section may prescribe how—

    (a) the assets, the full scheme liabilities and the protected liabilities in relation to closed schemes, and

    (b) their amount or value,

    are to be determined, calculated and verified.

    (3) Subject to any provision made under subsection (2), those matters are to be determined, calculated and verified in accordance with guidance issued by the Board.

    (4) In calculating the amount of any liabilities for the purposes of a valuation required by virtue of this section, a provision of the scheme which limits the amount of its liabilities by reference to the value of its assets is to be disregarded.

    (5) In this section, in relation to a scheme—

Column Number: 736

    ''actuarial valuation'' means a written valuation of—

    (a) the scheme's assets,

    (b) the full scheme liabilities, and

    (c) the protected liabilities in relation to the scheme;

    ''the actuary'' means—

    (a) the actuary appointed under section 47(1)(b) of the Pensions Act 1995 (professional advisers) in relation to the scheme, or

    (b) if no such actuary has been appointed, a person with prescribed qualifications;

    ''assets'' do not include assets representing the value of any rights in respect of money purchase benefits under the scheme;

    ''closed scheme'' has the same meaning as in section [treatment of closed schemes required to wind up];

    ''full scheme liabilities'' means—

    (a) the liabilities under the scheme to or in respect of members of the scheme,

    (b) other liabilities of the scheme, and

    (c) the estimated cost of winding up the scheme;

    ''liabilities'' does not include liabilities in respect of money purchase benefits under the scheme.'.—[Malcolm Wicks.]

Brought up, read the First and Second time, and added to the Bill.

 
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