Rights of Savers Bill

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

Rights of Savers Bill

Rights of Savers Bill
Part 1 — Savings and Retirement Account schemes
1

A
Bill
[AS AMENDED IN STANDING COMMITTEE C]
To
Make provision about the rights and choices of savers in relation to pensions
and pension schemes, annuities and savings; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Part 1
Savings and Retirement Account schemes
General
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Meaning of “Savings and Retirement Account (SaRA) schemes”
(1)
A pension scheme is a Savings and Retirement Account (SaRA) scheme for the
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purposes of this Part if it is registered as such a scheme under section 2 and
each of the following is fulfilled, namely—
(a)
the conditions set out in subsections (2) to (11), and
(b)
such other conditions as may be prescribed.
(2)
The first condition is that the scheme is established under a trust or in such
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other way as may be prescribed.
(3)
The second condition is that the provisions made by the instruments
establishing the scheme comply with such requirements as may be prescribed.
(4)
The third condition is that the scheme complies with the investment
requirements set out in section 4.
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(5)
The fourth condition is that the scheme complies with the drawdown
requirements set out in section 5.

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Rights of Savers Bill
Part 1 — Savings and Retirement Account schemes
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(6)
The fifth condition is that the scheme complies with such requirements as may
be prescribed as regards the extent to which, and the circumstances in which—
(a)
any payment made to the scheme by, or on behalf or in respect of, a
member of the scheme,
(b)
any income or capital gain arising from the investment of such a
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payment, or
(c)
the value of rights under the scheme,

may be used to defray the administrative expenses of the scheme, to pay
commission or in any other way which does not result in the provision of
benefits for or in respect of members.
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(7)
The sixth condition is that the scheme complies with such of the requirements
of regulations under section 113 of the 1993 Act (disclosure of information
about schemes to members etc.) and of regulations under section 237 of the
2004 Act (combined pension forecasts) as are applicable to it.
(8)
The seventh condition is that, subject to such minimum contribution levels and
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other restrictions as may be prescribed, members of the scheme may make such
contributions to the scheme as they think appropriate.
(9)
The eighth condition is that, except in so far as is necessary to ensure that the
scheme has tax-exemption or tax-approval (within the meaning of the 1993
Act), the scheme accepts transfer payments in respect of members’ rights
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under—
(a)
other pension schemes,
(b)
contracts and schemes approved under Chapter 3 of Part 14 of the
Income and Corporation Taxes Act 1988 (c. 1) (retirement annuity
contracts);
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(c)
annuities and insurance policies purchased or transferred for the
purpose of giving effect to rights under pension schemes; and
(d)
annuities purchased or entered into for the purpose of discharging
liability in respect of pension credits under section 29(1)(b) of the 1999
Act or under corresponding Northern Ireland legislation.
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(10)
The ninth condition is that the scheme has such exemption or approval as is
mentioned in subsection (9).
(11)
The tenth condition is that—
(a)
if the scheme is an occupational pension scheme, it is specified in a
contracting-out certificate in relation to all categories of employment to
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which the scheme relates, and
(b)
if the scheme is a personal pension scheme, it is an appropriate scheme
within the meaning of section 7(4) of the 1993 Act.
2
Registration of SaRA schemes
(1)
The Authority shall keep a register of SaRA schemes.
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(2)
Subject to subsection (3), the Authority shall register a pension scheme under
this section if the trustees of the scheme, or any person or persons prescribed
in relation to the scheme—
(a)
make an application for the purpose and pay such fee as the Authority
may determine; and
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(b)
declare that each of the following is fulfilled in relation to the scheme,
namely—

Rights of Savers Bill
Part 1 — Savings and Retirement Account schemes
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(i)
the conditions set out in subsections (2) to (11) of section 1; and
(ii)
such other conditions as may be prescribed under subsection (1)
of that section.
(3)
Where the Authority are satisfied on reasonable grounds that any of those
conditions is not fulfilled in relation to a pension scheme, the Authority may
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by direction—
(a)
refuse to register the scheme; or
(b)
where the scheme is registered under this section, remove it from the
register.
(4)
Section 10 of the 1995 Act (civil penalties) applies to any trustee of a pension
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scheme which is or has been registered under this section, and to any person
prescribed in relation to such a scheme, if—
(a)
he fails to take all such steps as are reasonable to secure that each of
those conditions is fulfilled in relation to the scheme or (as the case may
be) while the scheme was so registered he failed to take all such steps
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as were reasonable to secure that each of those conditions was so
fulfilled; or
(b)
where the scheme was registered on his application, any of those
conditions was not fulfilled in relation to the scheme at the time of the
application.
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(5)
The Secretary of State may by regulations make provision—
(a)
for the register, or extracts from the register, or for copies of the register
or of extracts from the register, to be open to inspection by, and
(b)
for copies of the register, or of extracts from it, to be supplied to,

such persons, in such manner, at such times, on payment of such fees, and
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subject to such other terms and conditions, as may be prescribed.
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Duty of employers to facilitate access to SaRA schemes
(1)
Except in so far as regulations otherwise provide, it shall be the duty of an
employer of relevant employees to comply with the requirements set out
below.
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(2)
The first requirement is that the employer shall ensure that at all times there is
at least one scheme designated by him for the purposes of this subsection
which is registered under section 2 and offers membership to all his relevant
employees (whether or not any other scheme registered under that section
which does not offer membership to all those employees is for the time being
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designated by him for those purposes).
(3)
Before designating a scheme for the purposes of subsection (2) the employer
shall consult with his relevant employees and any organisations representing
them.
(4)
The second requirement is that the employer shall supply his relevant
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employees with—
(a)
the name and address of the designated scheme or, as the case may be,
of each of the designated schemes; and
(b)
such other information as may be prescribed.
(5)
The third requirement is that the employer shall allow representatives of the
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designated scheme or schemes reasonable access to his relevant employees for
the purpose of supplying them with information about the scheme or schemes.

Rights of Savers Bill
Part 1 — Savings and Retirement Account schemes
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(6)
The fourth requirement is that, subject to such exceptions and qualifications as
may be prescribed, the employer shall, if he is requested to do so by a relevant
employee of his who is a member of a qualifying scheme—
(a)
deduct the employee’s contributions to the scheme from his
remuneration; and
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(b)
pay them to the trustees or managers of the scheme or, if regulations so
provide, to a prescribed person.
(7)
The fifth requirement is that the employer shall, if any scheme designated by
him for the purposes of subsection (2) ceases to be registered under section 2,
withdraw his designation of the scheme (but this requirement is not to be taken
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as implying that he cannot withdraw his designation of a scheme in other
circumstances).
(8)
Section 10 of the 1995 Act (civil penalties) applies to an employer who fails to
comply with any of the requirements set out above.
(9)
An employer is not, whether before designating a scheme for the purposes of
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subsection (2) or at any time while a scheme is designated by him for those
purposes, under any duty—
(a)
to make any enquiries, or act on any information, about the scheme for
any purpose not connected with—
(i)
ascertaining whether the scheme is for the time being registered
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under section 2,
(ii)
ascertaining the persons to whom it offers membership, or
(iii)
enabling him to comply with subsection (4), or
(b)
in particular, to investigate or monitor, or make any judgment as to, the
past, present or future performance of the scheme.
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(10)
In this section—
“employer” means any employer, whether or not resident or incorporated
in any part of the United Kingdom, employing at least five employees;
“qualifying scheme”, in relation to an employer, means—
(a)
the designated scheme or one of the designated schemes;
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(b)
if regulations so provide, any other SaRA scheme; or
(c)
if regulations so provide, any other personal pension as defined
in subsection (1) of section 1 of the 1993 Act (categories of
pension scheme);
“relevant employees”, in relation to an employer, means all employees of
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his employed in Great Britain and also, in the case of an employer
resident or incorporated in any part of Great Britain, all employees of
his employed outside the United Kingdom, but with the exception, in
the case of any employer, of any employees of his—
(a)
whose employment qualifies them for membership of an
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occupational pension scheme of the employer;
(b)
whose earnings fall below the lower earnings limit as defined in
section 181 of the 1993 Act; or
(c)
who are of such other description as may be prescribed.