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Public Bill Committee: 19th February 2008                

334

 

Pensions Bill, continued

 
 

section 111A of the Pension Schemes Act 1993 (c. 48)) between the

 

worker and the employer.’.

 

Member’s explanatory statement

 

This New Clause provides that a worker who does not have qualifying earnings may require the

 

employer to enrol the worker into a pension scheme that satisfies the requirements in subsection

 

(7). The employer is not required to make any contributions, nor accept a notice more than once

 

a year.

 


 

Transitional periods for money purchase and personal pension schemes

 

Mr Mike O’Brien

 

nc12

 

To move the following Clause:—

 

‘(1)    

During the first transitional period for money purchase and personal pension

 

schemes—

 

(a)    

sections 18(1)(b) and 24(3)(b) have effect as if for “3%” there were

 

substituted “1%”;

 

(b)    

sections 18(1)(c) and 24(4)(b) have effect as if for “8%” there were

 

substituted “2%”.

 

(2)    

The first transitional period is a prescribed period of at least one year, beginning

 

with the coming into force of section 18.

 

(3)    

During the second transitional period for money purchase and personal pension

 

schemes—

 

(a)    

sections 18(1)(b) and 24(3)(b) have effect as if for “3%” there were

 

substituted “2%”.

 

(b)    

sections 18(1)(c) and 24(4)(b) have effect as if for “8%” there were

 

substituted “5%”.

 

(4)    

The second transitional period is a prescribed period of at least one year,

 

beginning with the end of the first transitional period.’.

 

Member’s explanatory statement

 

This New Clause is related to Amendment 138. The purpose of the Amendment is to set out how the

 

minimum employer and jobholder contributions will be phased in where the employer is using a

 

money purchase scheme to discharge the employer duties.

 


 

Transitional period for defined benefits and hybrid schemes

 

Mr Mike O’Brien

 

nc13

 

To move the following Clause:—

 

‘(1)    

Subsection (3) applies if, in relation to a person who on the employer’s first

 

enrolment date is a jobholder to whom section 3 applies, the conditions in

 

subsection (2) are satisfied, and continue to be satisfied during the transitional

 

period for defined benefits and hybrid schemes.

 

(2)    

The conditions are that—


 
 

Public Bill Committee: 19th February 2008                

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Pensions Bill, continued

 
 

(a)    

the jobholder has been employed by the employer for a continuous period

 

beginning before the employer’s first enrolment date,

 

(b)    

at a time in that period before the employer’s first enrolment date, the

 

jobholder became entitled to become an active member of a defined

 

benefits scheme or a hybrid scheme,

 

(c)    

the jobholder is, and has always since that time been, entitled to become

 

an active member of a defined benefits scheme or a hybrid scheme, and

 

(d)    

the scheme to which that entitlement relates is a qualifying scheme, and

 

any scheme to which it has related on or after the employer’s first

 

enrolment date has been a qualifying scheme.

 

(3)    

Where this subsection applies, section 3 has effect in relation to the jobholder

 

with the substitution for subsection (2) of the following subsection—

 

“(2)    

The employer must make prescribed arrangements by which the

 

jobholder becomes an active member, with effect from the end of the

 

transitional period for defined benefits and hybrid schemes, of an

 

automatic enrolment scheme which is a defined benefits scheme or a

 

hybrid scheme.”.

 

(4)    

If at any time in the transitional period for defined benefits and hybrid schemes

 

the condition in subsection (2)(c) or (d) of this section ceases to be satisfied,

 

subsection (5) applies instead of subsection (3) (and the day after the last day on

 

which that condition is satisfied is referred to as “the closure date”).

 

(5)    

Where this subsection applies, section 3 has effect in relation to the jobholder

 

with the substitution for subsection (2) of the following subsection —

 

“(2)    

The employer must make prescribed arrangements by which the

 

jobholder either—

 

(a)    

becomes an active member, with effect from the closure date, of

 

an automatic enrolment scheme which is a defined benefits

 

scheme or a hybrid scheme, or

 

(b)    

becomes an active member, with effect from the automatic

 

enrolment date, of an automatic enrolment scheme which is a

 

money purchase scheme.”

 

(6)    

If the jobholder becomes a member of a scheme under arrangements made under

 

subsection (2)(b) of that section (as substituted by subsection (5))—

 

(a)    

the employer’s contributions are payable with effect from the automatic

 

enrolment date;

 

(b)    

any requirement of the scheme rules (in accordance with section 18(1))

 

for contributions to be payable by the jobholder does not apply in respect

 

of the period of the jobholder’s membership before the closure date;

 

(c)    

regulations made for the purposes of section 3(2)(b) must secure that the

 

jobholder may pay, within a period prescribed by the regulations, any

 

contributions which would have been payable by the jobholder but for

 

paragraph (b) of this subsection.

 

(7)    

Where subsection (3) or (5) of this section applies, section 3(3) and (4) apply as

 

if references to the automatic enrolment date were references to the day on which

 

arrangements would by virtue of this section fall to be made in respect of the

 

jobholder.

 

(8)    

The transitional period for defined benefits and hybrid schemes is a prescribed

 

period beginning with the day on which section 3 comes into force.

 

(9)    

In this section the “employer’s first enrolment date” means the first day on which

 

section 3 applies in the case of the employer (where that date falls within the

 

transitional period for defined benefits and hybrid schemes).’.

 

Member’s explanatory statement

 

This New Clause is related to Amendment 138. The purpose of this amendment is to set out how


 
 

Public Bill Committee: 19th February 2008                

336

 

Pensions Bill, continued

 
 

employers using defined benefits or hybrid schemes to discharge the employer duties will be

 

permitted to phase in the automatic enrolment of a defined group of jobholders.

 


 

Disclosure of tax information etc

 

Mr Mike O’Brien

 

NC14

 

To move the following Clause:—

 

‘(1)    

In the Pensions Act 2004 (c. 35) for section 88 (tax information) substitute—

 

“88    

Tax information etc

 

(1)    

This section applies to information held by the Revenue and Customs if

 

it is held by them in connection with a function of the Revenue and

 

Customs that relates to any of these matters—

 

(a)    

tax or duty;

 

(b)    

national insurance contributions;

 

(c)    

the national minimum wage.

 

(2)    

An officer of Revenue and Customs may disclose to the Regulator

 

information to which this section applies, if the disclosure is made for the

 

purpose of enabling or assisting the Regulator to discharge its functions.

 

(3)    

Where information to which this section applies is disclosed to the

 

Regulator by virtue of subsection (2) above or section 19 of the Anti-

 

terrorism, Crime and Security Act 2001 (disclosure of information held

 

by revenue departments), it must, subject to subsections (4) and (5), be

 

treated for the purposes of section 82 as restricted information.

 

(4)    

Information to which this section applies which is disclosed to the

 

Regulator as mentioned in subsection (3) may not be disclosed by the

 

Regulator or any person who receives the information directly or

 

indirectly from the Regulator except—

 

(a)    

to, or in accordance with authority given by, the Commissioners

 

for Her Majesty’s Revenue and Customs,

 

(b)    

with a view to the institution of, or otherwise for the purposes of,

 

any criminal proceedings,

 

(c)    

with a view to the institution of any other proceedings by the

 

Regulator, or for the purposes of any such proceedings instituted

 

by the Regulator,

 

(d)    

in accordance with section 84, otherwise than for the purposes of

 

any proceedings, or

 

(e)    

in the form of a summary or collection of information so framed

 

as not to enable information relating to any particular person to

 

be ascertained from it.

 

(5)    

Accordingly sections 82(3), 83, 85 to 87 and 235, and paragraph 4 of

 

Schedule 10, do not apply to such information, and section 84 applies

 

subject to subsection (4)(d).


 
 

Public Bill Committee: 19th February 2008                

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Pensions Bill, continued

 
 

(6)    

In subsection (4)(c) and (d), “proceedings” includes the issue of notices

 

or any other enforcement action taken by the Regulator under Chapter 2

 

of Part 1 of the Pensions Act 2008 or any other enactment.

 

(7)    

In this section “the Revenue and Customs” and a “function of the

 

Revenue and Customs” have the same meaning as in section 18 of the

 

Commissioners for Revenue and Customs Act 2005 (confidentiality).”

 

(2)    

In section 82 of that Act (restricted information) in subsection (3) for “88(4)”

 

substitute “88(4)(d)”.’.

 

Member’s explanatory statement

 

This New Clause would replace section 88 of the Pensions Act 2004 and section 88A inserted by

 

clause 42. It allows HMRC to disclose information on specified matters to the Regulator to enable

 

the Regulator to discharge its functions. Controls are placed on the Regulator’s ability to disclose

 

this information.

 


 

Employment Appeal Tribunal

 

Mr Mike O’Brien

 

NC15

 

To move the following Clause:—

 

In section 21(1) of the Employment Tribunals Act 1996 (jurisdiction of appeal

 

tribunal) after paragraph (gc) insert—

 

“(gd)    

the Pensions Act 2008,”.’.

 

Member’s explanatory statement

 

This New Clause enables employers and workers to bring appeals to the Employment Appeal

 

Tribunal from decisions of an employment tribunal under the Bill.

 


 

Financial assistance scheme

 

Mr Mike O’Brien

 

NC20

 

To move the following Clause:—

 

‘(1)    

Subsection (2) of section 286 of the Pensions Act 2004 (financial assistance

 

scheme for members of certain pension schemes) is amended as follows.

 

(2)    

In the definition of “qualifying member”, for the words from “a person” to the end

 

of paragraph (b) substitute “a person who, at such time as may be prescribed, is a

 

member of the scheme or has ceased to be a member of the scheme,”.

 

(3)    

In the definition of “qualifying pension scheme” after paragraph (b) insert—

 

“(ba)    

the assets of which, at such time as may be prescribed, are

 

insufficient to satisfy in full the liabilities of the scheme

 

calculated in the prescribed manner,”.

 

(4)    

Omit the definition of “scheme’s pension liabilities” and the words from “and a

 

qualifying pension scheme” to the end.’.

 

Member’s explanatory statement

 

This New Clause extends the 'qualifying member' definition in section 286 of the Pensions Act 2004


 
 

Public Bill Committee: 19th February 2008                

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Pensions Bill, continued

 
 

(which provides for financial assistance for members of certain pension schemes), so that all

 

relevant members can be qualifying members regardless of whether their liabilities are likely to be

 

met by their scheme.

 


 

Appointment of trustees

 

Mr Mike O’Brien

 

NC23

 

To move the following Clause:—

 

‘(1)    

In section 7 of the Pensions Act 1995 (c. 26) (appointment of trustees), in

 

subsection (3)—

 

(a)    

for “necessary”, in the first place where it occurs, substitute

 

“reasonable”;

 

(b)    

omit “or” at the end of paragraph (b);

 

(c)    

at the end insert “, or

 

(d)    

otherwise to protect the interests of the generality of the

 

members of the scheme.”

 

(2)    

In paragraph 9(b) of Schedule 2 to the Pensions Act 2004 (c. 35) (reserved

 

regulatory functions), for “or (c)” substitute “, (c) or (d)”.’.

 

Member’s explanatory statement

 

This New Clause allows the Pensions Regulator to appoint trustees in certain circumstances where

 

it is reasonable to do so, instead of necessary. It also extends the powers of the Regulator so that

 

it can appoint trustees in order to protect the interests of the generality of scheme members.

 


 

Prohibited recruitment conduct

 

Mr Mike O’Brien

 

NC24

 

To move the following Clause:—

 

‘(1)    

An employer contravenes this section if any statement made or question asked by

 

or on behalf of the employer for the purposes of recruitment indicates (expressly

 

or impliedly) that an application for employment with the employer may be

 

determined by reference to whether or not an applicant might opt out of automatic

 

enrolment.

 

(2)    

The reference in subsection (1) to a statement made or a question asked for the

 

purposes of recruitment is a reference to one made or asked in the course of any

 

of the following—

 

(a)    

inviting applications for employment;

 

(b)    

requesting information from an applicant, referee or other person in

 

connection with an application for employment;

 

(c)    

providing information about employment;

 

(d)    

proposing terms or conditions of employment.


 
 

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Pensions Bill, continued

 
 

(3)    

The reference in subsection (1) to an applicant opting out of automatic enrolment

 

is a reference to the applicant, if becoming at any time in the course of the

 

employment a jobholder to whom section 3 or 5 applies—

 

(a)    

giving notice in accordance with section 7 in relation to arrangements

 

made by the employer under the relevant section, or

 

(b)    

where the employer makes arrangements under regulations under section

 

3(5) or 5(5), declining to become an active member of the scheme to

 

which the arrangements relate.

 

(4)    

In this section and sections [Compliance notices] and [Penalty notices],

 

“employer” means the prospective employer in relation to any employment.

 

Member’s explanatory statement

 

This New Clause prohibits conduct by or on behalf of an employer by which job applicants may be

 

screened out on grounds related to pension scheme membership.

 


 

Compliance notices

 

Mr Mike O’Brien

 

NC25

 

To move the following Clause:—

 

‘(1)    

The Pensions Regulator (referred to in this Chapter as the “Regulator”) may issue

 

a compliance notice to an employer if the Regulator is of the opinion that the

 

employer has contravened section [Prohibited recruitment conduct].

 

(2)    

A compliance notice is a notice directing the employer to take, or refrain from

 

taking, the steps specified in the notice in order to—

 

(a)    

remedy the contravention, or

 

(b)    

prevent the contravention being repeated.

 

(3)    

A compliance notice may, in particular—

 

(a)    

state the period within which any step must be taken or must cease to be

 

taken;

 

(b)    

require the employer to provide within a specified period specified

 

information relating to the contravention;

 

(c)    

require the employer to inform the Regulator, within a specified period,

 

how the employer has complied or is complying with the notice;

 

(d)    

state that, if the employer fails to comply with the requirements of the

 

notice, the Regulator may issue a penalty notice under section [Penalty

 

notices].

 

(4)    

A compliance notice must specify the contravention to which the notice relates.’.

 

Member’s explanatory statement

 

This New Clause provides the Pensions Regulator with the power to issue compliance notices to

 

employers if it considers that they have contravened the prohibition in NC24. The notices will tell

 

employers what they need to do to put right their contravention or prevent it re-occurring.

 



 
 

Public Bill Committee: 19th February 2008                

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Pensions Bill, continued

 
 

Penalty notices

 

Mr Mike O’Brien

 

NC26

 

To move the following Clause:—

 

‘(1)    

The Regulator may issue a penalty notice to an employer if the Regulator is of the

 

opinion that the employer—

 

(a)    

has contravened section [Prohibited recruitment conduct], or

 

(b)    

has failed to comply with a compliance notice under section [Compliance

 

notices].

 

(2)    

A penalty notice is a notice requiring the person to whom it is issued to pay a

 

penalty within the period specified in the notice.

 

(3)    

The penalty—

 

(a)    

is to be determined in accordance with regulations, and

 

(b)    

must not exceed £50,000.

 

(4)    

A penalty notice must—

 

(a)    

state the amount of the penalty;

 

(b)    

state the date, which must be at least 4 weeks after the date on which the

 

notice is issued, by which the penalty must be paid;

 

(c)    

specify the contravention or failure to which the notice relates;

 

(d)    

notify the employer of the review process under section 35 and the right

 

to make a reference under section 36 (as applied by section [Review of

 

notices and references to Pensions Regulator Tribunal]).

 

(5)    

Section 34 (penalty notices: recovery) applies to a penalty payable under this

 

section, and to a notice under this section, as it applies to a penalty payable under

 

section 32, and to a notice under that section.’.

 

Member’s explanatory statement

 

This New Clause gives the Pensions Regulator power to issue penalty notices to employers if it

 

considers that they have contravened the prohibition in NC24 or have failed to comply with a

 

compliance notice under NC25. Penalties are subject to regulations and must not exceed £50,000.

 


 

Review of notices and references to Pensions Regulator Tribunal

 

Mr Mike O’Brien

 

NC27

 

To move the following Clause:—

 

‘(1)    

Section 35 (review of notices) also applies to a compliance notice issued under

 

section [Compliance notices] and to a penalty notice issued under section

 

[Penalty notices].

 

(2)    

Section 36 (references to the Pensions Regulator Tribunal) applies in relation to

 

a penalty notice issued under section [Penalty notices] as it applies in relation to

 

a notice issued under section 32 or 33.’.

 

Member’s explanatory statement

 

This New Clause provides for the Pensions Regulator to review notices issued under NC25 and

 

NC26. It also gives an employer a right of appeal to the Pensions Regulator Tribunal against


 
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