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Pensions Bill


Pensions Bill
Schedule 4 — Abolition of contracting-out for defined contribution pension schemes
Part 1 — Amendments having effect as from abolition date

47

 

27         

In section 163 (exemption of certain schemes from rule against perpetuities)

in subsection (2) (schemes to which the exemption applies) omit paragraph

(c) (appropriate schemes).

28         

In section 164 (Crown employment) for subsection (2) substitute—

“(2)   

A person who is employed by or under the Crown shall be treated as

5

an employed earner for the purposes of—

(a)   

sections 25A to 33A, so far as they relate to personal pension

schemes;

(b)   

sections 38, 43 and 45;

(c)   

section 48, so far as it relates to minimum contributions;

10

(d)   

section 50, so far as it relates to personal pension schemes;

(e)   

section 54;

(f)   

section 111 (and Part VIII and section 153 so far as they have

effect for the purposes of section 111);

(g)   

sections 117, 154 and 155;

15

(h)   

section 159, so far as it relates to protected rights payments;

and

(i)   

sections 160 and 166.”

29         

In section 177 (general financial arrangements) in subsection (3) (amounts to

be paid out of National Insurance Fund into Consolidated Fund) in

20

paragraph (b) (administrative expenses incurred in carrying into effect

remaining provisions of the Act) for sub-paragraph (ii) substitute—

“(ii)   

sections 25A to 33A, so far as they relate to personal

pension schemes;

(iii)   

section 38;

25

(iv)   

section 50, so far as it relates to personal pension

schemes;

(v)   

section 54;

(vi)   

section 111 (and Part VIII and section 153 so far as

they have effect for the purposes of section 111);

30

(vii)   

sections 117, 154 and 155;

(viii)   

section 159, so far as it relates to protected rights

payments; and

(ix)   

sections 160 and 166;”.

30    (1)  

Section 181 (general interpretation) is amended as follows.

35

      (2)  

In subsection (1)—

(a)   

in the appropriate places insert—

““abolition date” means the day appointed for the

commencement of section 15(1) of the Pensions Act

2007;”;

40

““HMRC” means the Commissioners for Her Majesty’s

Revenue and Customs;”;

(b)   

for the definition of “appropriate scheme certificate” and references

to an appropriate scheme, substitute—

““appropriate scheme” and “appropriate scheme

45

certificate” are to be construed in accordance with

section 181A;”;

 

 

Pensions Bill
Schedule 4 — Abolition of contracting-out for defined contribution pension schemes
Part 1 — Amendments having effect as from abolition date

48

 

(c)   

in the definition of “contracting-out certificate” and references to

contracted-out scheme and to contracting-out, at the end insert “and

section 181A”;

(d)   

for the definition of “money purchase contracted-out scheme”

substitute—

5

““money purchase contracted-out scheme” is to be

construed in accordance with section 181A;”.

      (3)  

In subsection (4) (regulations may prescribe the persons who are to be

regarded as members or prospective members of an occupational scheme

etc.) omit “, 44”.

10

31         

After section 181 insert—

“181A   

Interpretation of references to money purchase contracted-out

schemes or appropriate schemes after abolition date

(1)   

This section applies for the interpretation of this Act on and after the

abolition date.

15

(2)   

An occupational pension scheme was a money purchase contracted-

out scheme at a time before the abolition date if, at that time, the

scheme was contracted-out by virtue of satisfying section 9(3) (as it

then had effect).

(3)   

A money purchase contracted-out scheme was, at a time before the

20

abolition date, a contracted-out scheme in relation to an earner’s

employment if it was, at that time, specified in a contracting-out

certificate in relation to that employment; and references to the

contracting-out of a scheme are, in relation to a money purchase

contracted-out scheme, references to its inclusion in such a

25

certificate.

(4)   

Any reference to a contracting-out certificate is, in relation to a

money purchase contracted-out scheme, a reference to a certificate

issued by virtue of section 7, as it had effect before the abolition date,

in relation to the employment of an earner in employed earner’s

30

employment which was contracted-out by reference to that scheme.

(5)   

Any certificate so issued that was, at a time before the abolition date,

in force in respect of an employed earner’s employment is to be taken

as conclusive that the employment was, at that time, contracted-out

employment.

35

(6)   

A personal pension scheme was an appropriate scheme at a time

before the abolition date if, at that time, there was in force a certificate

issued under section 7(1)(b) (as it then had effect) stating that the

scheme was an appropriate scheme; and “appropriate scheme

certificate” means such a certificate.

40

(7)   

Any appropriate scheme certificate in force in relation to a scheme at

any time before the abolition date is to be taken as conclusive that the

scheme was, at that time, an appropriate scheme.”

Pensions Act 1995 (c. 26)

32    (1)  

Section 149 of the Pensions Act 1995 (hybrid occupational pension schemes)

45

is amended as follows.

 

 

Pensions Bill
Schedule 4 — Abolition of contracting-out for defined contribution pension schemes
Part 2 — Further amendments

49

 

      (2)  

In subsection (1) (regulations may make provision for hybrid schemes to be

treated as two contracted-out schemes) for “sections 9 and 12” substitute

“section 9”.

      (3)  

In paragraph (b) of that subsection, for “section 9(3)” substitute “the

requirements mentioned in section 25A(3)”.

5

Welfare Reform and Pensions Act 1999 (c. 30)

33         

In section 1 of the Welfare Reform and Pensions Act 1999 (meaning of

“stakeholder pension scheme”)—

(a)   

in subsection (1) in paragraph (a), for “(10)” substitute “(9)”;

(b)   

omit subsection (10) (stakeholder pension scheme must be

10

contracted-out).

34         

Omit section 7 of that Act (reduced rates of contributions for money

purchase contracted-out schemes and appropriate personal pension

schemes etc.: power to specify different percentages).

Pensions Act 2004 (c. 35)

15

35         

In section 257 of the Pensions Act 2004 (conditions for pension protection on

transfer of employment) omit subsection (7) (minimum payments made

under contracted-out money purchase scheme to be disregarded).

Part 2

Further amendments

20

Social Security Contributions and Benefits Act 1992 (c. 4)

36    (1)  

Section 4C of the SSCBA (power to make provision in consequence of

provision made by or by virtue of section 4B(2) etc.) is amended as follows.

      (2)  

In subsection (2) (purposes for which regulations may be made) omit

paragraph (d) (purposes relating to minimum payments).

25

      (3)  

In subsection (5) (matters in respect of which regulations may have

retrospective effect)—

(a)   

in paragraph (b) (amount of rebate under section 41(1D) or 42A(2C)

of the Pension Schemes Act 1993 (c. 48)) omit “or 42A(2C)”;

(b)   

omit paragraphs (g) and (h) (liability to make, and amount of,

30

minimum payments);

(c)   

omit paragraphs (i) and (j) (liability to make, and amount of,

payments under section 42A(3) of that Act or minimum

contributions).

37         

In section 8 of the SSCBA (calculation of primary Class 1 contributions) in

35

subsection (3) (provisions to which calculation is subject) in paragraph (c)

for “sections 41 and 42A” substitute “section 41”.

38         

In section 9 of the SSCBA (calculation of secondary Class 1 contributions) in

subsection (3) (provisions to which calculation is subject) in paragraph (c)

for “sections 41 and 42A” substitute “section 41”.

40

39    (1)  

In Schedule 1 to the SSCBA (supplementary provisions relating to

contributions of Classes 1, 1A, 1B, 2 and 3) paragraph 1 (Class 1

 

 

Pensions Bill
Schedule 4 — Abolition of contracting-out for defined contribution pension schemes
Part 2 — Further amendments

50

 

contributions where earner is in more than one employment) is amended as

follows.

      (2)  

In sub-paragraph (3) (determination of amount of primary Class 1

contributions where aggregate earnings include earnings from contracted-

out employment)—

5

(a)   

omit paragraphs (a) and (b);

(b)   

in paragraph (c), for sub-paragraphs (i) and (ii) substitute “to such

part of the aggregated earnings attributable to COSRS service as

exceeds the current primary threshold and does not exceed the

current upper earnings limit”;

10

(c)   

in paragraph (d) for “part or parts attributable to COMPS or COSRS

service” substitute “part attributable to COSRS service”.

      (3)  

In sub-paragraph (6) (determination of amount of secondary Class 1

contributions where aggregate earnings include earnings from contracted-

out employment) omit paragraphs (a) and (b).

15

      (4)  

In sub-paragraph (9) (interpretation) omit the definition of “COMPS

service”.

Pension Schemes Act 1993 (c. 48)

40         

The Pension Schemes Act 1993 has effect subject to the following

amendments.

20

41         

In section 8 (meaning of, among other things, “minimum payment”) omit

subsection (3) (regulations may make provision about manner in which

minimum payments to be made etc.).

42         

In section 40 (scope of Chapter 2 of Part 3) omit paragraph (b) (which relates

to contributions to be paid by HMRC in respect of members of money

25

purchase contracted-out schemes or of appropriate personal pension

schemes).

43         

Omit section 42A (reduced rates of contributions, and rebates, for members

of money purchase contracted-out schemes etc.).

44         

Omit section 43 (payment of minimum contributions to personal pension

30

schemes).

45         

Omit section 45 (amount of minimum contributions).

46         

Omit section 45B (money purchase and personal pension schemes:

verification of ages).

47         

In section 50 (powers of HMRC to approve arrangements for scheme ceasing

35

to be certified) in subsection (4) (regulations may provide for various

provisions of the Act to have effect with modifications where arrangements

are approved) for “, 25A to 33 and 43 to 45” substitute “and 25A to 33”.

48         

In section 164 (Crown employment) in subsection (2) (employees of Crown

to be treated as employed earners for certain purposes) in paragraph (b)

40

omit “, 43 and 45”.

49    (1)  

Section 177 (general financial arrangements) is amended as follows.

      (2)  

In subsection (2) (amounts to be paid out of the National Insurance Fund)—

 

 

Pensions Bill
Schedule 4 — Abolition of contracting-out for defined contribution pension schemes
Part 2 — Further amendments

51

 

(a)   

in paragraph (za) (payments by HMRC under various provisions)

omit “or section 42A(2C) or (3)”;

(b)   

omit paragraph (a) (minimum contributions paid by HMRC under

section 43).

      (3)  

In subsection (7) (amounts to be paid into National Insurance Fund) in

5

paragraph (a), omit “, 42A(2D) or (5) or 43(5) or (6)”.

50    (1)  

Section 181 (interpretation) is amended as follows.

      (2)  

In subsection (1), omit the definition of “minimum contributions”.

      (3)  

In subsection (4) (regulations may prescribe the persons who are to be

regarded as members or prospective members of an occupational scheme

10

etc.) omit “, 43”.

51    (1)  

Schedule 2 (certification regulations) is amended as follows.

      (2)  

In Part 1 (occupational pension schemes) in paragraph 4 (regulations may

modify certain provisions of Part 3 in cases where person employed in two

or more employments) in sub-paragraph (1), for “and 66 to 68” substitute “,

15

67 and 68”.

      (3)  

In paragraph 5 (state scheme premiums) in sub-paragraph (1) (regulations

may require provision of information to HMRC for purpose of certain

provisions) for the words from “sections 37” to the end substitute “sections

37, 38, 50 to 63 and 159(1) to (3) and (6) (except as they apply to personal

20

pension schemes, the members of such schemes or rights in respect of

them)”.

      (4)  

In paragraph 6 (schemes covering different employers) in sub-paragraph (1)

(regulations may modify certain provisions in cases where earner under

different employers qualifies for benefits of same occupational pension

25

scheme) for “and 66 to 68” substitute “, 67 and 68”.

52    (1)  

Paragraph 2 of Schedule 4 (priority in bankruptcy etc.: employer’s

contributions to occupational pension scheme) is amended as follows.

      (2)  

Omit sub-paragraphs (2) and (3) (sums owed on account of employer’s

minimum payments to a money purchase contracted-out scheme).

30

      (3)  

In sub-paragraph (3A) (definition of “the appropriate amount”)—

(a)   

in the opening words, omit “or (3)”;

(b)   

in paragraph (a), omit “or (2) (as the case may be)”.

      (4)  

In sub-paragraph (5) (interpretation)—

(a)   

in the definition of “the percentage for contributing earners” for

35

paragraphs (a) and (b) substitute “3 per cent”;

(b)   

in the definition of “the percentage for non-contributing earners” for

paragraphs (a) and (b) substitute “4.8 per cent”.

 

 

Pensions Bill
Schedule 4 — Abolition of contracting-out for defined contribution pension schemes
Part 3 — Savings

52

 

Part 3

Savings

Issue and cancellation etc. of certificates for periods before the abolition date

53         

Nothing in the relevant amendments and repeals affects the continued

operation of any regulations in force under section 7(1) and (7) of the PSA

5

1993 (issue of certificates) immediately before the abolition date in relation

to the issue of a certificate having effect for a period before the abolition date.

54    (1)  

Nothing in the relevant amendments and repeals affects the continued

operation of section 34 of the PSA 1993 (cancellation, variation, surrender

and refusal of certificates), or any regulations in force under it immediately

10

before the abolition date, for the purposes of a retrospective act.

      (2)  

In sub-paragraph (1) “a retrospective act” means the cancellation, variation,

surrender or refusal of a certificate, or the issue of an amended certificate,

where—

(a)   

the certificate was in force for a period beginning before the abolition

15

date (or, in the case of a refusal of a certificate, would have related to

such a period if it had been issued), and

(b)   

the cancellation, variation, surrender, refusal or issue—

(i)   

is made after the abolition date, but

(ii)   

has effect from a date before that date.

20

      (3)  

An amended certificate issued by virtue of this paragraph must provide for

it to cease to have effect as from the abolition date.

      (4)  

In this paragraph and paragraph 53 “a certificate” means an appropriate

scheme certificate or a contracting-out certificate in respect of a money

purchase contracted-out scheme, and each of those terms has the meaning

25

given by section 181(1) of the PSA 1993.

55         

Nothing in the relevant amendments and repeals affects the continued

operation of section 164(2) of the PSA 1993 (persons employed by or under

the Crown to be treated as employed earners for the purposes of certain

provisions) in relation to the provisions of that Act saved by paragraphs 53

30

and 54.

56         

Nothing in the relevant amendments and repeals affects the continued

operation of section 177(3)(b)(ii) of the PSA 1993 (administrative expenses of

the Secretary of State, other than those arising out of certain provisions, to be

paid out of the National Insurance Fund into the Consolidated Fund) in

35

relation to the estimated administrative expenses of the Secretary of State in

carrying into effect the provisions of that Act saved by paragraphs 53 and 54.

Determination of question whether scheme was appropriate scheme

57         

Nothing in the relevant amendments and repeals affects the continued

operation of any regulations in force under section 7(6) of the PSA 1993

40

(issue of certificates) immediately before the abolition date.

Preservation of earner’s chosen scheme

58    (1)  

Nothing in the relevant amendments and repeals—

 

 

Pensions Bill
Schedule 5 — Removal of Secretary of State’s role in approving actuarial guidance

53

 

(a)   

prevents the giving of a preceding tax year notice, or

(b)   

otherwise affects the operation of section 44 of the PSA 1993 in

relation to such a notice.

      (2)  

In sub-paragraph (1) a “preceding tax year notice” means a notice within

section 44(1) of the PSA 1993 which is given on or after the abolition date but

5

in which the date specified in accordance with that provision falls before the

abolition date.

Interpretation etc.

59    (1)  

In this Part—

“the abolition date” has the same meaning as in section 15;

10

“the PSA 1993” means the Pension Schemes Act 1993 (c. 48);

“the relevant amendments and repeals” means—

(a)   

the amendments and repeals made by Part 1 of this Schedule,

and

(b)   

the consequential repeals in Part 4 of Schedule 7.

15

      (2)  

Nothing in this Part is to be read as affecting the generality of section 16 of

the Interpretation Act 1978 (c. 30) (general savings).

Schedule 5

Section 17

 

Removal of Secretary of State’s role in approving actuarial guidance

Bankruptcy (Scotland) Act 1985 (c. 66)

20

1          

In section 36C of the Bankruptcy (Scotland) Act 1985 (recovery of excessive

pensions contributions: supplementary) in subsection (5) (under which

calculation and verification of certain values and amounts may be required

to be in accordance with guidance approved by Secretary of State) for

paragraph (b) substitute—

25

“(b)   

in accordance with guidance from time to time prepared by a

prescribed person.”

2          

In section 36F of that Act (recovery orders: supplementary) in subsection (4)

(under which calculation and verification of certain values and amounts

may be required to be in accordance with guidance approved by Secretary

30

of State) for paragraph (b) substitute—

“(b)   

in accordance with guidance from time to time prepared by a

prescribed person.”

Insolvency Act 1986 (c. 45)

3          

In section 342C of the Insolvency Act 1986 (recovery of excessive pensions

35

contributions: supplementary) in subsection (5) (under which calculation

and verification of certain values and amounts may be required to be in

accordance with guidance approved by Secretary of State) for paragraph (b)

substitute—

“(b)   

in accordance with guidance from time to time prepared by a

40

prescribed person.”

 

 

 
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