Pensions Bill

House of Commons

Session 2007 - 08
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Pensions Bill

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 7 — Interpretation
34

70
Agency workers
(1)
This section applies to an individual (“the agency worker”)—
(a)
who is supplied by a person (“the agent”) to do work for another person
(“the principal”) under a contract or other arrangements made between
the agent and the principal;
5
(b)
who is not, as respects that work, a worker, because of the absence of a
worker’s contract between the individual and the agent or the
principal; and
(c)
who is not a party to a contract under which the agency worker
undertakes to do the work for another party to the contract whose
10
status is, by virtue of the contract, that of a client or customer of a
profession or business undertaking carried on by the individual.
(2)
Where this section applies, the other provisions of this Part have effect—
(a)
as if there were a worker’s contract for the doing of the work by the
agency worker, made between the agency worker and the relevant
15
person under subsection (3), and
(b)
as if that person were the agency worker’s employer.
(3)
The relevant person is—
(a)
whichever of the agent and the principal is responsible for paying the
agency worker in respect of the work; or
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(b)
if neither the agent nor the principal is responsible for doing so,
whichever of them pays the agency worker in respect of the work.
71
Crown employment
(1)
This Part has effect in relation to Crown employment and persons in Crown
employment as it has effect in relation to other employment and other workers.
25
(2)
In subsection (1) “Crown employment” means employment under or for the
purposes of a government department or any officer or body exercising on
behalf of the Crown functions conferred by a statutory provision.
(3)
For the purposes of the application of the provisions of this Part in relation to
Crown employment in accordance with subsection (1)—
30
(a)
references to a worker are to be construed as references to a person in
Crown employment; and
(b)
references to a worker’s contract are to be construed as references to the
terms of employment of a person in Crown employment.
(4)
This section is subject to section 74.
35
72
House of Lords staff
(1)
This Part has effect in relation to employment as a relevant member of the
House of Lords staff as it has effect in relation to other employment.
(2)
In this section, “relevant member of the House of Lords staff” means any
person who is employed under a worker’s contract with the Corporate Officer
40
of the House of Lords.

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 7 — Interpretation
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73
House of Commons staff
(1)
This Part has effect in relation to a relevant member of the House of Commons
staff as it has effect in relation to other employment.
(2)
In this section, “relevant member of the House of Commons staff” means any
person—
5
(a)
who was appointed by the House of Commons Commission; or
(b)
who is a member of the Speaker’s personal staff.
(3)
For the purposes of the application of the provisions of this Part in relation to
a relevant member of the House of Commons staff—
(a)
references to a worker are to be read as references to a relevant member
10
of the House of Commons staff; and
(b)
references to a worker’s contract are to be read as references to the
terms of employment of a relevant member of the House of Commons
staff.
74
Exception for reserve and volunteer forces
15
(1)
Section 71 (Crown employment) does not apply to service as a member of a
reserve force—
(a)
undergoing training under section 22 of the Reserve Forces Act 1996
(c. 14) (training obligations of members of the reserve forces), or
(b)
undertaking training or performing duties in accordance with section
20
27 of that Act (voluntary training and other duties).
(2)
Section 71 does not apply to service as a member of any of the forces specified
in subsection (3), while assisting the activities of those forces in the course of
Crown employment.
(3)
The forces are—
25
(a)
the Combined Cadet Force;
(b)
the Sea Cadet Corps;
(c)
the Army Cadet Force;
(d)
the Air Training Corps.
75
Exception for share fishermen
30
(1)
A person to whom subsection (2) applies is not a worker for the purposes of
this Part.
(2)
This subsection applies to a person who—
(a)
is employed as a master, or as a member of a crew, of a fishing vessel;
and
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(b)
is remunerated, in respect of that employment, only by a share of the
profits or gross earnings of the vessel.
76
Extension of definition of worker
The Secretary of State may by regulations make provision for this Part to apply
with or without modifications—
40
(a)
as if any individual of a prescribed description (who would not
otherwise be a worker) were a worker,

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 7 — Interpretation
36

(b)
as if there were in the case of any such individual a worker’s contract
of a prescribed description under which the individual works, and
(c)
as if a person of a prescribed description were the employer under that
contract.
General
5
77
Interpretation of Part
In this Part—
“active member”—
(a)
in relation to an occupational pension scheme, means a person
who is in pensionable service under the scheme;
10
(b)
in relation to a personal pension scheme, means a jobholder in
relation to whom there is an agreement within section 24(3)
between the scheme and the employer;
“automatic enrolment scheme” is to be read in accordance with section
3(7);
15
“average salary benefits” means benefits the rate or amount of which is
calculated by reference to the average salary of a member over the
period of service on which the benefits are based;
“contract of employment” has the meaning given by section 69;
“defined benefits”, in relation to a member of an occupational pension
20
scheme, means benefits which are not money purchase benefits (but the
rate or amount of which is calculated by reference to earnings or service
of the member or any other factor other than an amount available for
their provision);
“defined benefits scheme” means an occupational pension scheme under
25
which all the benefits that may be provided are defined benefits;
“employee”, “employer” and “employment” have the meaning given by
section 69;
“enrolment duty” means a duty under section 3(2), 5(2) or 6(3);
“hybrid scheme” means an occupational pension scheme—
30
(a)
which is not a money purchase scheme, but
(b)
where some of the benefits that may be provided are money
purchase benefits attributable to voluntary contributions of the
members, or other money purchase benefits;
the “IORP Directive” means Directive 2003/41/EC of the European
35
Parliament and of the Council on the activities and supervision of
institutions for occupations retirement provision;
“jobholder” has the meaning given by section 1(1);
“money purchase benefits”, in relation to a member of a pension scheme,
means benefits the rate or amount of which is calculated by reference to
40
a payment or payments made by the member or by any other person in
respect of the member and which are not average salary benefits;
“money purchase scheme” means an occupational pension scheme under
which all the benefits that may be provided are money purchase
benefits;
45
“occupational pension scheme” has the meaning given by section 16;
“pension scheme” has the meaning given by section 1(5) of the Pension
Schemes Act 1993 (c. 48);

Pensions Bill
Part 2 — Simplification etc
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“pensionable age” has the meaning given by the rules in paragraph 1 of
Schedule 4 to the Pensions Act 1995 (c. 26);
“pensionable service”, in relation to a member of an occupational pension
scheme, means service in any description of employment to which the
scheme relates which qualifies the member (on the assumption that it
5
continues for the appropriate period) for pension or other benefits
under the scheme;
“personal pension scheme” has the meaning given by section 17;
“prescribed” means prescribed by regulations;
“qualifying earnings” has the meaning given by section 11;
10
“qualifying scheme” is to be read in accordance with section 2(5);
“regulations” means regulations made by the Secretary of State;
“worker” has the meaning given by section 69.
Part 2
Simplification etc
15
Private pensions
78
Abolition of safeguarded rights
Part 3A of the Pension Schemes Act 1993 (c. 48) (safeguarded rights) ceases to
have effect.
79
Revaluation of accrued benefits etc
20
(1)
Schedule 2, which—
(a)
amends Schedule 3 to the Pension Schemes Act 1993 (methods of
revaluing accrued pension benefits),
(b)
amends Schedule 7 to the Pensions Act 2004 (c. 35) (pension
compensation provisions), and
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(c)
makes consequential amendments,

has effect.
(2)
The amendments made by Parts 1 and 3 of Schedule 2 do not apply in relation
to a revaluation period ending before this section comes into force.
(3)
In subsection (2) “revaluation period” has the same meaning as in paragraph 2
30
of Schedule 3 to the Pension Schemes Act 1993.
State pensions etc
80
Additional State Pension consolidation: Category A and graduated retirement
benefit
(1)
The Social Security Contributions and Benefits Act 1992 (c. 4) (the 1992 Act) is
35
amended as follows.
(2)
Section 45 (the additional pension in a Category A retirement pension) is
amended as follows.
(3)
In subsection (2) after “1999” insert “but before 6th April 2020”.

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Part 2 — Simplification etc
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(4)
After subsection (2) insert—
“(2A)
The weekly rate of the additional pension in a Category A retirement
pension in any case where the pensioner attained pensionable age in a
tax year after 5th April 2020 shall be the sum of the following—
(a)
in relation to any tax year before the flat rate introduction year,
5
the uprated consolidated amount, calculated in accordance
with Schedule 4C to this Act; and
(b)
in relation to the flat rate introduction year and subsequent
years, the weekly equivalent of the amount calculated in
accordance with Schedule 4B to this Act.”
10
(5)
In subsection (6), for “and (2)” substitute “(2) and (2A)”.
(6)
Schedule 3, which inserts Schedule 4C to the 1992 Act, has effect.
(7)
In section 47 (increase of Category A retirement pension for invalidity), after
subsection (4) insert—
“(4A)
Any part of an additional pension resulting from an amount calculated
15
under paragraph 3 of Schedule 4C to this Act is to be disregarded for
the purposes of this section.”
(8)
Section 36 of the National Insurance Act 1965 (graduated retirement benefit),
as it continues in force as mentioned in section 62 of the 1992 Act, has effect in
relation to a person over pensionable age only if the person attained
20
pensionable age before 6th April 2020.
81
State pension credit: extension of assessed income period for those aged 75 or
over
(1)
Section 9 of the State Pension Credit Act 2002 (c. 16) (duration of assessed
income period) is amended as set out in subsections (2) to (4).
25
(2)
For subsection (1) substitute—
“(1)
An assessed income period shall (subject to the following subsections)
be—
(a)
in the case of a claimant who is under the age of 75 on the day
on which the relevant decision takes effect, the period of 5 years
30
beginning with that day;
(b)
in the case of a claimant who is aged 75 or over on that day, an
indefinite period beginning with that day.”
(3)
In paragraph (b) of subsection (2), for the words from “may” to “years”
substitute “shall specify a period that is shorter than 5 years”.
35
(4)
After subsection (5) insert—
“(6)
Where—
(a)
an assessed income period is brought to an end by the expiry of
a period of 5 years or more, and
(b)
the claimant is aged 80 or over at that time,
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the assessed income period shall be treated as not ending at that time
but, subject to subsection (4) and provision made under subsection (5),
as continuing indefinitely.”

Pensions Bill
Part 3 — Pension compensation
Chapter 1 — Pension compensation on divorce etc
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(5)
The amendments made by subsections (2) and (3) apply only where the
relevant decision (within the meaning given by section 6(5) of the State Pension
Credit Act 2002 (c. 16)) takes effect on or after 6 April 2009.
(6)
The subsection inserted by subsection (4) ceases to have effect on 6 April 2014.
Part 3
5
Pension compensation
Chapter 1
Pension compensation on divorce etc
82
Scope of mechanism
(1)
Pension compensation sharing is available under this Chapter in relation to a
10
person’s shareable rights to PPF compensation.
(2)
For the purposes of this Chapter, a right of a person to PPF compensation is
“shareable” unless it is of a description specified by regulations made by the
Secretary of State.
83
Interpretation
15
In this Chapter—
“the Board” means the Board of the Pension Protection Fund;
“PPF compensation” means compensation payable under the pension
compensation provisions;
“the pension compensation provisions” means—
20
(a)
Chapter 3 of Part 2 of the Pensions Act 2004 (pension protection)
and any regulations or order made under it,
(b)
this Chapter and any regulations or order made under it, and
(c)
any provision corresponding to the provisions mentioned in
paragraph (a) or (b) in force in Northern Ireland;
25
“prescribed” means prescribed by regulations made by the Secretary of
State;
“the relevant order” means the pension compensation sharing order
which gives rise to the pension compensation sharing;
“the transfer day” means the day on which the relevant order takes effect;
30
“the transferee” means the person for whose benefit the relevant order is
made;
“the transferor” means the person to whose rights the relevant order
relates.
84
Activation of pension compensation sharing
35
Section 85 applies on the taking effect of any of the following relating to a
person’s shareable rights to PPF compensation—
(a)
a pension compensation sharing order under the Matrimonial Causes
Act 1973 (c. 18);
(b)
a pension compensation sharing order under Schedule 5 to the Civil
40
Partnership Act 2004 (c. 33);

Pensions Bill
Part 3 — Pension compensation
Chapter 1 — Pension compensation on divorce etc
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(c)
an order under Part 3 of the Matrimonial and Family Proceedings Act
1984 (c. 42) (financial relief in England and Wales in relation to overseas
divorce etc) corresponding to such an order as is mentioned in
paragraph (a);
(d)
an order under Schedule 7 to the Civil Partnership Act 2004 (c. 33)
5
(financial relief in England and Wales after overseas dissolution etc of
a civil partnership) corresponding to such an order as is mentioned in
paragraph (b);
(e)
an order under any provision corresponding to a provision mentioned
in any of paragraphs (a) to (d) in force in Northern Ireland.
10
85
Creation of pension compensation debits and credits
(1)
On the application of this section—
(a)
the transferor’s shareable rights to PPF compensation become subject
to a debit of the appropriate amount, and
(b)
the transferee becomes entitled to a credit of that amount as against the
15
Board.
(2)
For the purposes of subsection (1) “the appropriate amount” means the
percentage specified in the relevant order of the cash equivalent of the relevant
compensation on the valuation day.
(3)
For the purposes of subsection (2) “the relevant compensation” means the
20
payments or future payments to which, immediately before the transfer day,
the transferor is entitled under the pension compensation provisions by virtue
of the transferor’s shareable rights under those provisions.
(4)
The Secretary of State may by regulations provide for any description of
payment to be disregarded for the purposes of subsection (3).
25
(5)
For the purposes of this section “the valuation day” means such day within the
implementation period for the credit under subsection (1)(b) as the Board may
specify by notice in writing to the transferor and transferee.
(6)
The credit to which the transferee becomes entitled under subsection (1)(b) is
referred to in this Chapter as a “pension compensation credit”.
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86
Cash equivalents
(1)
The Secretary of State may by regulations make provision about the calculation
and verification of cash equivalents for the purposes of section 85.
(2)
Regulations under this section may include provision for calculation and
verification in a manner approved by the Board.
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87
Reduction of compensation
(1)
Where a person’s shareable rights to PPF compensation are subject to a pension
compensation debit, each payment or future payment—
(a)
to which the person is entitled under the pension compensation
provisions by virtue of those rights, and
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(b)
which is a qualifying payment,

is reduced by the appropriate percentage.