Pensions Bill

House of Commons

Session 2007 - 08
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Pensions Bill

Pensions Bill
Schedule 5 — Pension compensation on divorce etc: England and Wales
Part 3 — Amendments of the Civil Partnership Act 2004
76

      (2)
After subsection (1)(bc) insert—
“(bca)
section 24E(3) to (8) (provisions about pension compensation
orders in relation to divorce and nullity);
(bcb)
section 24F (duty to stay pension compensation sharing
orders);
5
(bcc)
section 24G (apportionment of pension compensation
sharing charges);”.
      (3)
After subsection (1)(bf) insert—
“(bg)
section 25F (power, by financial provision order, to attach
pension compensation payments, or to require the exercise of
10
a right of commutation of pension compensation);”.
      (4)
After subsection (1)(l) add—
“(m)
section 40B (appeals relating to pension compensation
sharing orders which have taken effect).”
      (5)
In subsection (2) for “and (be)” substitute “, (be) and (bg)”.
15
      (6)
In subsection (4) at the end add “or under subsections (1) to (3) of section 25G
of that Act”.
Part 3
Amendments of the Civil Partnership Act 2004
14
The Civil Partnership Act 2004 (c. 33) is amended as follows.
20
15
After Part 4 of Schedule 5 (pension sharing orders on or after dissolution or
nullity order) insert—
“Part 4A
Pension compensation sharing orders on or after dissolution or
nullity order
25
Circumstances in which pension compensation sharing orders may be made
19A   (1)
The court may make a pension compensation sharing order—
(a)
on making a dissolution or nullity order, or
(b)
at any time afterwards.
      (2)
In this Schedule “pension compensation sharing order” means a
30
pension compensation sharing order under this Part.
Pension compensation sharing orders
19B   (1)
A pension compensation sharing order is an order which—
(a)
provides that one civil partner’s shareable rights to PPF
compensation be subject to pension compensation sharing
35
for the benefit of the other civil partner, and
(b)
specifies the percentage value to be transferred.
      (2)
Shareable rights to PPF compensation are rights in relation to
which pension compensation sharing is available under—
(a)
Chapter 1 of Part 3 of the Pensions Act 2008, or
40

Pensions Bill
Schedule 5 — Pension compensation on divorce etc: England and Wales
Part 3 — Amendments of the Civil Partnership Act 2004
77

(b)
corresponding Northern Ireland legislation.
Pension compensation sharing orders: apportionment of charges
19C
The court may include in a pension compensation sharing order
provision about the apportionment between the civil partners of
any charge under—
5
(a)
section 91 of the Pensions Act 2008 (charges in respect of
pension compensation sharing costs), or
(b)
corresponding Northern Ireland legislation.
Restrictions on making pension compensation sharing orders
19D   (1)
A pension compensation sharing order may not be made in
10
relation to rights to PPF compensation that—
(a)
derive from rights under a pension scheme that were the
subject of pension attachment,
(b)
derive from rights under a pension scheme that were the
subject of pension sharing between the civil partners,
15
(c)
are the subject of pension compensation attachment, or
(d)
are or have been the subject of pension compensation
sharing between the civil partners.
      (2)
For the purposes of sub-paragraph (1)(a), rights under a pension
scheme “were the subject of pension attachment” if, at the time the
20
Board of the Pension Protection Fund assumed responsibility for
the scheme under Chapter 3 of Part 2 of the Pensions Act 2004 or
under corresponding Northern Ireland legislation, there was in
force a requirement imposed by virtue of Part 6 relating to those
rights.
25
      (3)
For the purposes of sub-paragraph (1)(b), rights under a pension
scheme “were the subject of pension sharing between the civil
partners” if the rights were at any time the subject of a pension
sharing order in relation to the civil partnership or a previous civil
partnership between the same parties.
30
      (4)
For the purposes of sub-paragraph (1)(c), rights to PPF
compensation “are the subject of pension compensation
attachment” if there is in force a requirement imposed by virtue of
Part 6 relating to them.
      (5)
For the purposes of sub-paragraph (1)(d), rights to PPF
35
compensation “are or have been the subject of pension
compensation sharing between the civil partners” if they are or
have ever been the subject of a pension compensation sharing
order in relation to the civil partnership or a previous civil
partnership between the same parties.
40
When pension compensation sharing orders may take effect
19E   (1)
A pension compensation sharing order is not to take effect unless
the dissolution or nullity order on or after which it is made has
been made final.
      (2)
No pension compensation sharing order may be made so as to
45
take effect before the end of such period after the making of the

Pensions Bill
Schedule 5 — Pension compensation on divorce etc: England and Wales
Part 3 — Amendments of the Civil Partnership Act 2004
78

order as may be prescribed by regulations made by the Lord
Chancellor.
      (3)
The power to make regulations under sub-paragraph (2) is
exercisable by statutory instrument which is subject to annulment
in pursuance of a resolution of either House of Parliament.
5
Interpretation
19F
In this Schedule—
“PPF compensation” means compensation payable under the
pension compensation provisions;
“the pension compensation provisions” means—
10
(a)
Chapter 3 of Part 2 of the Pensions Act 2004 (pension
protection) and any regulations or order made under
it,
(b)
Chapter 1 of Part 3 of the Pensions Act 2008 (pension
compensation sharing) and any regulations or order
15
made under it, and
(c)
any provision corresponding to the provisions
mentioned in paragraph (a) or (b) in force in Northern
Ireland.”
16    (1)
Part 5 of Schedule 5 (matters to which court is to have regard under Parts 1
20
to 4) is amended as follows.
      (2)
In the heading of the Part for “4” substitute “4A”.
      (3)
In paragraph 20—
(a)
omit “or” at the end of paragraph (a)(iii);
(b)
for “and” at the end of paragraph (a)(iv) substitute “or”;
25
(c)
after that provision insert—
“(v)
any provision of Part 4A (pension
compensation sharing orders) other than
paragraph 3 (apportionment of charges),
and”.
30
      (4)
In paragraph 21(1)—
(a)
omit “or” at the end of paragraph (c);
(b)
at the end of paragraph (d) insert “, or”;
(c)
after that paragraph insert—
“(e)
Part 4A (pension compensation sharing orders).”
35
      (5)
In paragraph 23(1)—
(a)
omit “or” at the end of paragraph (c);
(b)
at the end of paragraph (d) insert “or”;
(c)
after that paragraph insert—
“(e)
Part 4A (pension compensation sharing orders),”.
40
17    (1)
Part 7 of Schedule 5 (pension protection fund compensation etc) is amended
as follows.
      (2)
Omit paragraph 30(3) (definition of PPF compensation).

Pensions Bill
Schedule 5 — Pension compensation on divorce etc: England and Wales
Part 3 — Amendments of the Civil Partnership Act 2004
79

      (3)
After paragraph 34 insert—
“Attachment of PPF compensation
34A   (1)
This paragraph applies if, having regard to any PPF compensation
to which a civil partner is or is likely to be entitled, the court
decides to make an order under Part 1.
5
      (2)
To the extent to which the Part 1 order is made having regard to
such compensation, it may require the Board, if at any time any
payment in respect of PPF compensation becomes due to the civil
partner with compensation rights, to make a payment for the
benefit of the other civil partner.
10
      (3)
The Part 1 order must express the amount of any payment
required to be made by virtue of sub-paragraph (2) as a percentage
of the payment which becomes due to the civil partner with
compensation rights.
      (4)
Any such payment by the Board—
15
(a)
discharges so much of its liability to the civil partner with
compensation rights as corresponds to the amount of the
payment, and
(b)
is to be treated for all purposes as a payment made by the
civil partner with compensation rights in or towards the
20
discharge of that civil partner’s liability under the order.
      (5)
If the civil partner with compensation rights has a right to
commute any PPF compensation, the Part 1 order may require that
civil partner to exercise it to any extent.
      (6)
This paragraph applies to any payment due in consequence of
25
commutation in pursuance of the Part 1 order as it applies to other
payments in respect of PPF compensation.
      (7)
The power conferred by sub-paragraph (5) may not be exercised
for the purpose of commuting a benefit payable to the civil partner
with compensation rights to a benefit payable to the other civil
30
partner.
      (8)
The powers conferred by sub-paragraphs (2) and (5) may not be
exercised in relation to rights to PPF compensation that—
(a)
derive from rights under a pension scheme that were at
any time the subject of a pension sharing order in relation
35
to the civil partnership or a previous civil partnership
between the same parties, or
(b)
are or have ever been the subject of a pension
compensation sharing order in relation to the civil
partnership or a previous civil partnership between the
40
same parties.”
      (4)
Before paragraph 35 insert—
“34B  (1)
Regulations may—
(a)
make provision, in relation to any provision of paragraph
34A which authorises the court making a Part 1 order to
45
require the Board to make a payment for the benefit of the

Pensions Bill
Schedule 5 — Pension compensation on divorce etc: England and Wales
Part 3 — Amendments of the Civil Partnership Act 2004
80

other civil partner, as to the person to whom, and the terms
on which, the payment is to be made;
(b)
make provision, in relation to payment under a mistaken
belief as to the continuation in force of a provision
included by virtue of paragraph 34A in a Part 1 order,
5
about the rights or liabilities of the payer, the payee or the
person to whom the payment was due;
(c)
require notices to be given in respect of changes of
circumstances relevant to Part 1 orders which include
provision made by virtue of paragraph 34A;
10
(d)
make provision for the Board to be discharged in
prescribed circumstances from a requirement imposed by
virtue of paragraph 34A;
(e)
make provision about calculation and verification in
relation to the valuation of PPF compensation for the
15
purposes of the court’s functions in connection with the
exercise of any of its powers under this Schedule.
      (2)
Regulations under sub-paragraph (1)(e) may include—
(a)
provision for calculation or verification in accordance with
guidance from time to time prepared by a prescribed
20
person;
(b)
provision by reference to regulations under regulations
under section 86 of the Pensions Act 2008.”
      (5)
In paragraph 37(1) of that Schedule—
(a)
after the definition of “the Board” insert—
25
““the civil partner with compensation rights” means the
civil partner who is or is likely to be entitled to PPF
compensation;”;
(b)
after the definition of “occupational pension scheme” insert—
“prescribed” means prescribed by regulations;”.
30
18    (1)
Part 11 of Schedule 5 (variation, discharge etc of certain orders for financial
relief) is amended as follows.
      (2)
In paragraph 50(1)(f)—
(a)
omit “or” at the end of sub-paragraph (i);
(b)
at the end of sub-paragraph (ii) insert “or”;
35
(c)
after that sub-paragraph insert—
“(iii)
paragraph 34A(2),”;
(d)
in the closing words after “pension rights” insert “or pension
compensation rights”.
      (3)
In paragraph 50(1)(i) after “a pension sharing order” insert “, or a pension
40
compensation sharing order,”.
      (4)
After paragraph 53(2)(c) insert—
“(ca)
a pension compensation sharing order;”.
      (5)
After paragraph 54(5) insert—
    “(6)
Paragraph 19D (restrictions on making pension compensation
45
sharing orders) applies in relation to a pension compensation

Pensions Bill
Schedule 5 — Pension compensation on divorce etc: England and Wales
Part 3 — Amendments of the Civil Partnership Act 2004
81

sharing order under paragraph 53 as it applies in relation to any
other pension compensation sharing order.”
      (6)
In the italic heading before paragraph 56 for “and pension sharing orders”
substitute “, pension sharing and pension compensation sharing orders”.
      (7)
In the following provisions of paragraph 57, after “pension sharing order”
5
insert “or pension compensation sharing order”—
(a)
the opening words of sub-paragraph (1);
(b)
sub-paragraph (1)(a)(i);
(c)
sub-paragraph (1)(b);
(d)
sub-paragraph (2);
10
(e)
sub-paragraph (3).
      (8)
In paragraph 58(2) for “or pension sharing order” substitute “, pension
sharing order or pension compensation sharing order”.
19
In Part 14 of Schedule 5 (miscellaneous and supplementary) after paragraph
79 insert—
15
“Appeals relating to pension compensation sharing orders which have taken effect
79A   (1)
This paragraph applies where an appeal against a pension
compensation sharing order is begun on or after the day on which
the order takes effect.
      (2)
If the Board of the Pension Protection Fund has acted to its
20
detriment in reliance on the taking effect of the order the appeal
court—
(a)
may not set aside or vary the order;
(b)
may make such further orders (including a pension
compensation sharing order) as it thinks fit for the purpose
25
of putting the parties in the position it considers
appropriate.
      (3)
In determining for the purposes of sub-paragraph (2) whether the
Board has acted to its detriment the appeal court may disregard
any detriment which in the court’s opinion is insignificant.
30
      (4)
Paragraph 19E only applies to a pension compensation sharing
order under this paragraph if the decision of the appeal court can
itself be the subject of an appeal.”
20    (1)
In Schedule 7 (financial relief in England and Wales after overseas
dissolution etc of a civil partnership), in the italic heading before paragraph
35
9, for “and pension sharing” substitute “, pension sharing and pension
compensation sharing”.
      (2)
In paragraph 9(2) of that Schedule—
(a)
for “or 4” substitute “, 4 or 4A”;
(b)
for “and pension sharing” substitute “, pension sharing and pension
40
compensation sharing”.
      (3)
In paragraph 10(9)(c) of that Schedule omit “Part 7 of”.
      (4)
In paragraph 14 of that Schedule—

Pensions Bill
Schedule 6 — Amendments of Schedule 7 to the Pensions Act 2004
82

(a)
after sub-paragraph (1)(c) insert—
“(ca)
paragraphs 19C, 19D and 19E(2) and (3) (pension
compensation sharing);”;
(b)
in sub-paragraph (1)(e) for “37” substitute “34 and 35 to 37”;
(c)
after that provision insert—
5
“(ea)
paragraph 34A (orders under Part 1 relating to
pension compensation attachment);”;
(d)
in sub-paragraph (1)(i) for “79” substitute “79A”;
(e)
in that provision for “and pension-sharing appeals” substitute “,
pension-sharing appeals and pension compensation-sharing
10
appeals”;
(f)
in sub-paragraph (2) after “Sub-paragraph (1)(d)” insert “and (ea)”;
(g)
in sub-paragraph (4) at the end add “or under paragraphs 34B to 36
of that Schedule (supplementary provision about orders relating to
pension compensation)”.
15
Schedule 6
Section 96

Amendments of Schedule 7 to the Pensions Act 2004
1
Schedule 7 to the Pensions Act 2004 (c. 35) (pension compensation
provisions) is amended as follows.
2
In paragraph 3(6), at the end, add “to the scheme”.
20
3
In paragraph 5(5), at the end, add “to the scheme”.
4
In paragraph 21(1) for “15, 18 and 19” substitute “15 to 19”.
5
For paragraph 21(2)(b) and (c) substitute—
“(c)
for paragraph 15(5) substitute—
    “(5)
Subject to sub-paragraph (5A), for the purposes of this
25
paragraph and paragraphs 16 and 17, “the accrued
amount” means the amount equal to the initial annual rate
of the pension which, under the admissible rules, the
deferred member is entitled to receive at normal benefit
age by virtue of his pension credit rights.
30
     (5A)
For the purposes of calculating the amounts mentioned in
sub-paragraph (4)(b) and (c), the accrued amount is to be
treated as reduced by such amount as is not attributable to
rights of the deferred member that involve the member
being credited by the scheme with notional pensionable
35
service.”,
(ca)
in paragraph 16(2)(a) before “pensionable service” insert
“notional”,
(cb)
in paragraph 17(2)(b) the reference to normal pension age
is to be read as a reference to normal benefit age,
40
(cc)
in paragraph 17(6) omit “, “the accrued amount””.”
6
In paragraph 25(3), after “before that person attains normal pension age”
insert “(or, in a case to which paragraph 21 applies, normal benefit age)”.