House of Commons Amendments

House of Commons

Session 2007 - 08
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Other Bills before Parliament

321

House of Commons

Notices of Amendments

given on

Thursday 14th February 2008

For other Amendment(s) see the following page(s):

Pensions Bill Committee 293-317 and 319-20

Public Bill Committee

Pensions Bill

Open market option as the default for the annuitisation of personal accounts

Danny Alexander

Paul Rowen

NC22

To move the following Clause:—

‘(1)
An annuity bought with funds saved through the scheme established under

section 50 or a qualifying scheme is a lifetime annuity if—

(a)
it is payable by an insurance company,

(b)
the member was required to select the insurance company from the open

market,

(c)
it is payable until the member’s death or until the later of the member’s

death and the end of a term certain not exceeding ten years, and

(d)
it is a level annuity, an increasing annuity or a relevant linked annuity.

(2)
An annuity is a level annuity if its amount does not vary from year to year.

(3)
An annuity is an increasing annuity if its amount increases from year to year.

(4)
An annuity is a relevant linked annuity if its amount varies from year to year but

only in line with changes in (or by an amount which does not exceed the amount

by which it would vary if it varied in line with changes in)—

(a)
the retail prices index,

(b)
the market value of freely marketable assets, or

(c)
an index reflecting the market value of freely marketable assets.

(5)
“Freely marketable assets” means assets which are sold on the open market at a

price not determined by the member.’.

Member’s explanatory statement

The pupose of this New Clause is to ensure that individuals make the most of their pension by tak

ing advantage of the open market in annuities.

Notices of Amendments: 14th February 2008
322

Pensions Bill, continued

Mr Mike O’Brien

190

Schedule  8,  page  88,  line  16,  at end insert—

‘Pensions Act 1995 (c. 26)
In section 7(3), at the end of paragraph (b), the word

“or”.’.

Member’s explanatory statement

This amendment, which relates to NC23, is consequential on the addition of a further paragraph

to section 7(3) of the Pensions Act 1995.

Mr Mike O’Brien

191

Clause  109,  page  48,  line  13,   at end insert—

‘(ca)
section [Appointment of trustees];’.

Member’s explanatory statement

See Member’s explanatory statement for amendment 192.

Mr Mike O’Brien

192

Clause  109,  page  48,  line  14,  at end insert—

‘(3A)
Section [Appointment of trustees] comes into force at the end of the period of 2

months beginning with the day on which this Act is passed.’.

Member’s explanatory statement

This and amendment 191 mean that NC23 comes into force 2 months after Royal Assent.

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.

Notices of Amendments: 14th February 2008
323

Pensions Bill, continued

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.

(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;

Notices of Amendments: 14th February 2008
324

Pensions Bill, continued

(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.

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 com

pliance 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].

Notices of Amendments: 14th February 2008
325

Pensions Bill, continued

(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 pen

alty notices issued under NC26.