|
| |
|
| |
4 | Investment requirements for SaRA schemes |
| |
(1) | A SaRA scheme is a scheme of investment, to which an individual may |
| |
subscribe, and in respect of which the following requirements must be met— |
| |
(a) | the requirements set out in subsections (2) to (4), and |
| 5 |
(b) | such other requirements as may be prescribed. |
| |
(2) | The first requirement is that the account is made up of investments of the kinds |
| |
specified by the Treasury by regulations. |
| |
(3) | The second requirement is that each account is an account to which only one |
| |
| 10 |
(4) | The third requirement is that each account must at all times be managed by an |
| |
account manager and under terms agreed in a recorded form between the |
| |
account manager and the account investor. |
| |
(5) | The terms agreed to which subsection (4) refers shall include the following |
| |
| 15 |
(a) | that the account investments shall be in the beneficial ownership of the |
| |
| |
(b) | that the title to all account investments shall be vested in the account |
| |
manager or his nominee or jointly in one of them and the account |
| |
| 20 |
(c) | that, where a share certificate or other document evidencing title to an |
| |
account investment is issued, it shall be held by the account manager or |
| |
| |
(d) | that the account manager shall satisfy himself that any person to whom |
| |
he delegates any of his functions or responsibilities under the terms |
| 25 |
agreed with the account investor is competent to carry out those |
| |
functions or responsibilities. |
| |
| |
“account investment” is an investment under an account which is a |
| |
qualifying investment for a stocks and shares component or a cash |
| 30 |
component, as the case may be; |
| |
“account manager” means a person who is approved for the purposes of |
| |
this section by the Authority. |
| |
| |
5 | Drawdown requirements for SaRA schemes |
| 35 |
(1) | In respect of any SaRA scheme the following drawdown requirements must be |
| |
| |
(a) | the requirements set out in subsections (2) to (6), and |
| |
(b) | such other requirements as may be prescribed. |
| |
(2) | The first requirement is that the total sum to be taken out of the account |
| 40 |
amounts to no more than 60 per cent of the value of the account at the time of |
| |
| |
|
| |
|
| |
|
(3) | The second requirement is that the total sum to be taken out of the account does |
| |
| |
(4) | The third requirement is that the value of the amount that is drawn down is |
| |
required to be paid into the account by the account investor within such period |
| |
as the Treasury may by regulations specify; but the period so specified may not |
| 5 |
be required to begin within four years of the date of the drawdown. |
| |
(5) | The fourth requirement is that any amount which has been drawn down and |
| |
not paid into the account by the account investor within the period specified |
| |
by regulations made under subsection (4) shall not be exempt from taxation. |
| |
(6) | The fifth requirement is that drawdown takes place for one of the following |
| 10 |
| |
(a) | the purpose of providing financial assistance to the account investor in |
| |
making his first house purchase for his occupation as his principal |
| |
| |
(b) | the purpose of providing financial assistance to a child or grandchild in |
| 15 |
making the child’s first house purchase for his occupation as his |
| |
| |
(c) | the purpose of providing financial assistance to the account investor |
| |
| |
(i) | an apprenticeship of a prescribed description, or |
| 20 |
(ii) | a course of accredited higher or further education at a publicly- |
| |
funded institution or such class of institution as may be |
| |
| |
(d) | such other purpose as may be prescribed. |
| |
(7) | The Secretary of State shall by regulations amend the amount specified in |
| 25 |
subsection (3) for the purpose of ensuring that the amount rises annually in line |
| |
with the retail prices index. |
| |
| |
| |
(a) | a son or daughter of the account investor, or |
| 30 |
(b) | a person in respect of whom the account investor had parental |
| |
responsibility when that person reached the age of 16; |
| |
“financial assistance” has the prescribed meaning; |
| |
“first house purchase for his occupation as his principal residence” has the |
| |
| 35 |
| |
(a) | a grandson or granddaughter of the account investor, or |
| |
(b) | a person in respect of whom the account investor’s child had |
| |
parental responsibility when that person reached the age of 16; |
| |
“parental responsibility”— |
| 40 |
(a) | in relation to England and Wales, has the meaning given by |
| |
section 3 of the Children Act 1989 (c. 41), and |
| |
(b) | in relation to Scotland, shall be construed as a reference to |
| |
“parental responsibilities” within the meaning given by section |
| |
1(3) of the Children (Scotland) Act 1995 (c. 36); |
| 45 |
“publicly-funded institution” means— |
| |
(a) | any university or other institution receiving grants, loans or |
| |
other payments under section 65 of the Further and Higher |
| |
Education Act 1992 (c. 13), or under section 5 of the Education |
| |
|
| |
|
| |
|
Act 1994 (c. 30), any institution maintained by a local education |
| |
authority in the exercise of their further and higher education |
| |
functions, any institution receiving a recurrent grant towards its |
| |
costs under regulations made under section 485 of the |
| |
Education Act 1996 (c. 56) or any institution receiving financial |
| 5 |
resources under section 5 or 34 of the Learning and Skills Act |
| |
| |
(b) | any institution within the higher education sector for the |
| |
purposes of the Further and Higher Education (Scotland) Act |
| |
1992 (c. 37), any college of further education within the meaning |
| 10 |
of section 36(1) of that Act or any central institution within the |
| |
meaning of section 135(1) of the Education (Scotland) Act 1980 |
| |
| |
(c) | the Queen’s University of Belfast, the University of Ulster, a |
| |
college of education in Northern Ireland within the meaning of |
| 15 |
Article 2(2) of the Education and Libraries (Northern Ireland) |
| |
Order 1986 (S.I. 1986/594 (N.I. 3)) or any institution providing |
| |
in Northern Ireland further education as defined in Article 3 of |
| |
the Further Education (Northern Ireland) Order 1997 (S.I. 1997/ |
| |
| 20 |
“the retail prices index” means— |
| |
(a) | the general index of retail prices (for all items) published by the |
| |
Office for National Statistics, or |
| |
(b) | where that index is not published for a month, any substituted |
| |
index or figures published by that Office. |
| 25 |
| |
6 | Application of Employment Rights Act 1996 |
| |
(1) | Sections 46 and 102 of the Employment Rights Act 1996 (c. 18) (occupational |
| |
pension scheme trustees: protection from unfair dismissal and other |
| |
detriment) shall apply in relation to an employee who is (or is a director of a |
| 30 |
company which is) a trustee of a scheme designated by his employer under |
| |
section 3(2) as they apply in relation to an employee who is (or is a director of |
| |
a company which is) a trustee of a relevant occupational pension scheme which |
| |
relates to his employment. |
| |
(2) | Section 58 of that Act (occupational pension scheme trustees: time off) shall |
| 35 |
apply to the employer in relation to a designated scheme as it applies to the |
| |
employer in relation to a relevant occupational pension scheme. |
| |
(3) | In this section “relevant occupational pension scheme” has the meaning given |
| |
by section 46 of the Employment Rights Act 1996. |
| |
7 | Application of 1993, 1995 and 2004 Acts to SaRA schemes |
| 40 |
(1) | Schedule 1 to the 1999 Act (application of 1993 and 1995 Acts to registered |
| |
schemes) is amended in accordance with subsection (2). |
| |
(2) | In paragraph 1(1)(b), at the end, insert the words “of this Act or under section |
| |
2 of the Rights of Savers Act 2005”. |
| |
|
| |
|
| |
|
(3) | The provisions of Schedule 1 to the 1999 Act (as amended by subsection (2) of |
| |
this section) shall have effect subject to the provisions of sections 4 and 5 of this |
| |
| |
8 | Interpretation and application of Part 1 |
| |
| 5 |
“the 1993 Act” means the Pension Schemes Act 1993 (c. 48); |
| |
“the 1995 Act means the Pensions Act 1995 (c. 26); |
| |
“the 1999 Act” means the Welfare Reform and Pensions Act 1999 (c. 30); |
| |
“the 2004 Act” means the Pensions Act 2004 (c. 35); |
| |
“account” means an account which is within a SaRA scheme; |
| 10 |
“account investor” means the individual who subscribes to an account; |
| |
“the Authority” means the Pensions Regulator established under section |
| |
| |
“designated scheme”, in relation to an employer, means a scheme |
| |
designated by him for the purposes of section 3(2); |
| 15 |
“drawdown” means the withdrawal of cash from an account prior to |
| |
| |
“employee” has the meaning given by section 181(1) of the 1993 Act; |
| |
“occupational pension scheme” and “personal pension scheme” have the |
| |
meanings given by section 1 of the 1993 Act; |
| 20 |
“pension scheme” means an occupational pension scheme or a personal |
| |
| |
“prescribed” means prescribed by regulations made by the Secretary of |
| |
| |
“SaRA scheme” shall be construed in accordance with section 1. |
| 25 |
(2) | The Secretary of State may by regulations make provision for a SaRA scheme |
| |
| |
(a) | is prescribed or is of a prescribed description, and |
| |
(b) | would (apart from the regulations) be an occupational pension scheme, |
| |
| to be treated for all purposes, or for such purposes as may be prescribed, as if |
| 30 |
it were a personal pension scheme and not an occupational pension scheme. |
| |
(3) | This Part applies to a pension scheme managed by or on behalf of the Crown |
| |
as it applies to other pension schemes; and, accordingly, references in this Part |
| |
to a person in his capacity as a trustee or manager of, or person prescribed in |
| |
relation to, a pension scheme include the Crown, or a person acting on behalf |
| 35 |
of the Crown, in that capacity. |
| |
(4) | This Part applies to persons employed by or under the Crown in like manner |
| |
as if such persons were employed by a private person; and references in this |
| |
Part to a person in his capacity as an employer include the Crown, or a person |
| |
acting on behalf of the Crown, in that capacity. |
| 40 |
(5) | Subsections (3) and (4) do not apply to any provision of this Part under or by |
| |
virtue of which a person may be prosecuted for an offence; but such a provision |
| |
applies to persons in the public service of the Crown as it applies to other |
| |
| |
(6) | Nothing in this Part applies to Her Majesty in Her private capacity (within the |
| 45 |
meaning of the Crown Proceedings Act 1947 (c. 44)). |
| |
|
| |
|
| |
|
| |
| |
9 | Retirement Income Funds |
| |
(1) | The Finance Act 2004 (c. 12) is amended as follows. |
| |
(2) | After section 152 (meaning of “arrangement”), insert— |
| 5 |
“152A | Meaning of ‘Retirement Income Fund’ |
| |
(1) | In this Part, a Retirement Income Fund means a scheme for the |
| |
reinvestment of savings in retirement which— |
| |
(a) | is operated by or on behalf of a person authorised to operate a |
| |
registered pension scheme, |
| 10 |
(b) | is a scheme in which investments are approved by the Inland |
| |
| |
(c) | meets the conditions set out in subsections (2) to (9). |
| |
(2) | The first condition is that, subject to the other conditions in this section, |
| |
funds held in the Retirement Income Fund may be invested and |
| 15 |
withdrawn by the member as and when he elects. |
| |
(3) | The second condition is that an authorised Retirement Income Fund |
| |
provider must set an annual maximum withdrawal allowance for each |
| |
member, based on an annual assessment of each member’s life |
| |
expectancy, and a member’s withdrawals from the fund in any one |
| 20 |
year must not exceed that allowance. |
| |
(4) | The third condition is that, in setting annual maximum withdrawal |
| |
allowances, an authorised provider must ensure that no member’s total |
| |
future annual income falls below the Minimum Retirement Income |
| |
level (as set under section 11 of the Rights of Savers Act 2005) except in |
| 25 |
the circumstances provided for in the sixth condition. |
| |
(5) | The fourth condition is that an authorised provider must set an annual |
| |
minimum withdrawal allowance so that each member’s total income is |
| |
at least equivalent to the Minimum Retirement Income level, except in |
| |
the circumstances provided for in the sixth condition. |
| 30 |
(6) | The fifth condition is that if a member chooses not to declare his total |
| |
annual income to the authorised provider he must withdraw funds |
| |
equivalent to the level of the Minimum Retirement Income level or his |
| |
annual maximum withdrawal allowance, whichever is the lower. |
| |
(7) | The sixth condition is that, where there are insufficient funds to enable |
| 35 |
the annual minimum withdrawal allowance to be set so that a |
| |
member’s total income is at least equivalent to the Minimum |
| |
Retirement Income level, the allowance should be set at the highest |
| |
level consistent with the assessment of the member’s life expectancy. |
| |
(8) | The seventh condition is that the maximum and minimum withdrawal |
| 40 |
allowances must be set at the same level if a member’s total annual |
| |
income, including his maximum withdrawal allowance, is lower than |
| |
the Minimum Retirement Income level. |
| |
|
| |
|
| |
|
(9) | The eighth condition is that a Retirement Income Fund, and any income |
| |
derived from it, must not be capable of assignment or surrender by the |
| |
| |
(10) | The ninth condition is that each member’s life expectancy is re-assessed |
| |
at an interval not exceeding twelve months. |
| 5 |
(11) | A SaRA may be converted into a Retirement Income Fund at the |
| |
account holder’s sole discretion, providing that he is either— |
| |
(a) | over the age of 60, or |
| |
(b) | in receipt of Incapacity Benefit, Disability Living Allowance or |
| |
| 10 |
(12) | Section 109(1)(b) of the Employment Rights Act 1996 (c. 18) shall not |
| |
apply to the holder of a SaRA. |
| |
10 | Amendment of the pension rules |
| |
(1) | Section 165 of the Finance Act 2004 (c. 12) (pension rules) is amended as |
| |
| 15 |
(2) | In subsection (1) (which sets out the pension rules)— |
| |
(a) | in Pension Rule 4, after paragraph (a), insert— |
| |
“(aa) | a withdrawal from a Retirement Income Fund,”; |
| |
(b) | in Pension Rule 4, after the second appearance of the words “scheme |
| |
pension”, insert the words “a withdrawal from a Retirement Income |
| 20 |
| |
(c) | in Pension Rule 6, after paragraph (a), insert— |
| |
“(aa) | a withdrawal from a Retirement Income Fund,”; |
| |
(d) | in Pension Rule 6, after the second appearance of the words “scheme |
| |
pension”, insert the words “a withdrawal from a Retirement Income |
| 25 |
| |
11 | Minimum Retirement Income |
| |
(1) | The amount of the Minimum Retirement Income in respect of each tax year |
| |
shall be set by the Chancellor of the Exchequer by order at the level of the |
| |
standard minimum guarantee prescribed under section 2 of the State Pension |
| 30 |
| |
(2) | Before making an order under subsection (1), the Chancellor of the Exchequer |
| |
shall consult such persons as he considers appropriate. |
| |
(3) | An order under this section (other than the order that applies to the first tax |
| |
year during which this section is in force) must be made on or before 31st |
| 35 |
January of the tax year before the tax year to which the order applies. |
| |
12 | Removal of age limit for annuity protection lump sum death benefit |
| |
(1) | Schedule 29 to the Finance Act 2004 is amended as follows. |
| |
(2) | In paragraph 16(1) (definition of annuity protection lump sum death benefit), |
| |
paragraph (a) shall cease to have effect. |
| 40 |
|
| |
|
| |
|
| |
Promotion of personal pension schemes |
| |
13 | Duty of employers to facilitate access to personal pension schemes |
| |
(1) | Section 3 of the Welfare Reform and Pensions Act 1999 (c. 30) (duty of |
| |
employers to facilitate access to stakeholder pension schemes) is amended as |
| 5 |
| |
(2) | In subsection (9), in the definition of “qualifying scheme”, at the end of |
| |
paragraph (b), insert “or |
| |
(c) | if regulations so provide, any other personal pension as defined |
| |
in subsection (1) of section 1 of the Pension Schemes Act 1993 |
| 10 |
(categories of pension scheme);”. |
| |
| |
Miscellaneous and final provisions |
| |
14 | Consequential amendments and repeals |
| |
(1) | Schedule 1 (which contains consequential amendments) shall have effect. |
| 15 |
(2) | Schedule 2 (which contains repeals) shall have effect. |
| |
15 | Regulations and orders |
| |
(1) | Any power of a Minister of the Crown or the Treasury under this Act to make |
| |
regulations or an order is exercisable by statutory instrument. |
| |
(2) | Any regulations or order made under this Act (other than an order made under |
| 20 |
section 17) shall be laid before Parliament after being made and is subject to |
| |
annulment in pursuance of a resolution of either House of Parliament. |
| |
(3) | Every power conferred by this Act on a Minister of the Crown or the Treasury |
| |
to make regulations or an order includes power— |
| |
(a) | to make different provision for different cases (including different |
| 25 |
provision in respect of different areas); |
| |
(b) | to make provision subject to such exemptions and exceptions as the |
| |
person making the regulations or order thinks fit; and |
| |
(c) | to make such incidental, supplemental, consequential and transitional |
| |
provision as the person making the regulations or order thinks fit. |
| 30 |
| |
There shall be paid out of money provided by Parliament— |
| |
(a) | any expenditure incurred by a Minister of the Crown or government |
| |
department under this Act; and |
| |
(b) | any increase attributable to this Act in the sums which under any other |
| 35 |
Act are payable out of sums so provided. |
| |
17 | Short title, commencement and extent |
| |
(1) | This Act may be cited as the Rights of Savers Act 2005. |
| |
|
| |
|