House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

1131

House of Commons

Notices of Amendments

given on

Thursday 21st February 2008

Consideration of Bill

Pensions Bill, As Amended

Start date of personal accounts

Mr Nigel Waterson

Andrew Selous

NC1

To move the following Clause:—

‘The pension scheme established by the Secretary of State under section 50 of this

Act shall commence operation with effect from 1st April 2012.’.

Means testing

Mr Nigel Waterson

Andrew Selous

NC2

To move the following Clause:—

‘(1)
On or before 1st April 2009, the Secretary of State shall publish his projections

of the numbers of people likely to be subject to means-tested benefits (including

housing benefit) and in “at risk” groups following the introduction of personal

accounts.

(2)
If the projected figure published in accordance with subsection (1) exceeds 10 per

cent. of the pensioner population, the implementation of the scheme under section

50 of this Act shall be postponed for at least 12 months after the date of

publication.

(3)
The Secretary of State shall publish any proposals for reform to address the

findings in subsection (1) above concurrently with the publication of the

projections thereunder.’.

Notices of Amendments: 21st February 2008
1132

Pensions Bill, continued

Costs incurred by Pensions Regulator

Mr Nigel Waterson

Andrew Selous

NC3

To move the following Clause:—

‘The set-up costs incurred by the Pensions Regulator in carrying out its duties

under Chapter 1 of this Act shall be funded from the Consolidated Fund.’.

Costs incurred by Personal Accounts Delivery Authority

Mr Nigel Waterson

Andrew Selous

NC4

To move the following Clause:—

‘The set-up costs incurred by the Personal Accounts Delivery Authority in

carrying out its duties under section 50 of this Act shall be recouped through

charges to members over a period of five years from 1st April 2012.’.

Financial assistance to Personal Accounts Delivery Authority

Mr Nigel Waterson

Andrew Selous

NC5

To move the following Clause:—

‘Any financial assistance given to the Personal Accounts Delivery Authority by

the Secretary of State must include conditions about repayment and interest at

commercial rates.’.

Existing pension provision

Mr Nigel Waterson

Andrew Selous

NC6

To move the following Clause:—

‘In accordance with its functions under section 61 of this Act, the Personal

Accounts Delivery Authority must, to the best of its ability, minimise any adverse

effects from its activities on existing, good quality occupational and personal

pension schemes.’.

Notices of Amendments: 21st February 2008
1133

Pensions Bill, continued

Earnings link

Mr Nigel Waterson

Andrew Selous

NC7

To move the following Clause:—

‘Before the coming into force of this Act, the Secretary of State shall announce to

Parliament his intention as to the timing of the implementation of section 5 of the

Pensions Act 2007.’.

Mr Nigel Waterson

Andrew Selous

1

Page  88,  line  16  [Schedule  8],  at end add—

‘Part 5

Removal of Annuity Protection Lumpsum Death Benefit

Title
Extent of repeal

Finance Act 2004 (c. 12)
In Schedule 29, paragraph 16(1)(a)’.

Retirement income fund

Mr Nigel Waterson

Andrew Selous

NC8

To move the following Clause:—

‘(1)
The Finance Act 2004 (c. 12) is amended as follows.

(2)
After section 152 (meaning of “arrangement”), insert—

“152A
  Meaning of ‘Retirement Income Fund’

(1)
In this Part, a Retirement Income Fund means a scheme for the

reinvestment of savings in retirement which—

(a)
is operated by or on behalf of a person authorised to operate a

registered pension scheme,

(b)
is a scheme in which investments are approved by HM Revenue

and Customs, and

(c)
meets the conditions set out in subsections (2) to (9).

(2)
The first condition is that, subject to the other conditions in this section,

funds held in the Retirement Income Fund may be invested and

withdrawn by the member as and when he elects.

(3)
The second condition is that an authorised Retirement Income Fund

provider must set an annual maximum withdrawal allowance for each

member, based on an assessment of each member’s life expectancy, and

a member’s withdrawals from the fund in any one year must not exceed

that allowance.

(4)
The third condition is that, in setting annual maximum withdrawal

allowances, an authorised provider must ensure that no member’s total

Notices of Amendments: 21st February 2008
1134

Pensions Bill, continued

future annual income falls below the Minimum Retirement Income level

(as set under section [Maximum Retirement Income] of the Pensions Act

2008) except in the circumstances provided for in the sixth condition.

(5)
The fourth condition is that an authorised provider must set an annual

minimum withdrawal allowance so that each member’s total income is at

least equivalent to the Minimum Retirement Income level, except in the

circumstances provided for in the sixth condition.

(6)
The fifth condition is that if a member chooses not to declare his total

annual income to the authorised provider he must withdraw funds

equivalent to the level of the Minimum Retirement Income level or his

annual maximum withdrawal allowance, whichever is the lower.

(7)
The sixth condition is that, where there are insufficient funds to enable

the annual minimum withdrawal allowance to be set so that a member’s

total income is at least equivalent to the Minimum Retirement Income

level, the allowance should be set at the highest level consistent with the

assessment of the member’s life expectancy.

(8)
The seventh condition is that the maximum and minimum withdrawal

allowances must be set at the same level if a member’s total annual

income, including his maximum withdrawal allowance, is lower than the

Minimum Retirement Income level.

(9)
The eighth condition is that a Retirement Income Fund, and any income

derived from it, must not be capable of assignment or surrender by the

member.’.

Withdrawal from a retirement income fund

Mr Nigel Waterson

Andrew Selous

NC9

To move the following Clause:—

‘(1)
Section 165 of the Finance Act 2004 (c. 12) (pension rules) is amended as

follows.

(2)
In subsection (1) (which sets out the pension rules)—

(a)
in Pension Rule 4, after paragraph (a), insert—

“(aa)
a withdrawal from a Retirement Income Fund,”;

(b)
in Pension Rule 4, after the second appearance of the words “scheme

pension”, insert the words “or a withdrawal from a Retirement Income

Fund”;

(c)
in Pension Rule 6, after paragraph (a), insert—

“(aa)
a withdrawal from a Retirement Income Fund,”;

(d)
in Pension Rule 6, after the second appearance of the words “scheme

pension”, insert the words “or a withdrawal from a Retirement Income

Fund”.’.

Notices of Amendments: 21st February 2008
1135

Pensions Bill, continued

Minimum retirement income

Mr Nigel Waterson

Andrew Selous

NC10

To move the following Clause:—

‘(1)
The amount of the Minimum Retirement Income in respect of each tax year shall

be set by the Chancellor of the Exchequer by order at the level of the standard

minimum guarantee prescribed under section 2 of the State Pension Credit Act

2002 (c. 16).

(2)
Before making an order under subsection (1), the Chancellor of the Exchequer

shall consult such persons as he considers appropriate.

(3)
An order under this section (other than the order that applies to the first tax year

during which this section is in force) must be made on or before 31st January of

the tax year before the tax year to which the order applies.’.

Provisions for conditionally indexed arrangements etc

Mr Nigel Waterson

Andrew Selous

NC11

To move the following Clause:—

‘(1)
Schedule [Provisions for conditionally indexed arrangements etc] which—

(a)
amends section 84 and Schedule 3 of the Pension Schemes Act 1993

(Basis of Revaluation);

(b)
amends section 51 of the Pensions Act 1995 (annual increase in rate of

pension);

(c)
amends section 67 of the Pensions Act 1995 (restriction on powers to

alter schemes);

(d)
amends Schedule 7 to the Pension Schemes Act 2004 (pension

compensation provision); and

(e)
makes provision for consequential amendments for the operation of

conditional indexation in relation to a scheme that satisfies prescribed

conditions, has effect.

(2)
The amendments made by Schedule [Provisions for conditionally indexed

arrangements etc] do not apply in relation to any scheme or arrangement in

existence prior to the coming into force of this section.

(3)
In this section conditional indexation relates to benefits provided by a

conditionally indexed scheme, which—

(a)
was established after the coming into force of this section;

(b)
is not a money purchase scheme as defined by section 181(1) of the

Pension Schemes Act of 1993;

(c)
provides that indexation of pensions both in deferment and in payment

may be modified in accordance with prescribed requirements; and

(d)
complies with such other requirements as may be prescribed.’.

Notices of Amendments: 21st February 2008
1136

Pensions Bill, continued

Mr Nigel Waterson

Andrew Selous

NS1

To move the following Schedule:—

‘Provision for conditionally indexed arrangements etc

Part 1

Basis of Revaluation

1    (1)
The Pension Schemes Act 1993 (c.48) (Basis of Revaluation) is amended as

follows.

      (2)
In section 84 after subsection (3) there is added—

“(3A)
If any benefit as is mentioned in paragraph (a) of section 83(1) is a

conditional indexation benefit then that benefit shall be revalued using

the conditional indexation method”.

      (3)
In Schedule 3 (Methods of Revaluation of Accrued Pension Benefit) after

paragraph 4 there is added—

“(4A)
The conditional indexation method is to revalue the benefits which

have accrued to the member in respect of the pre-pension period in

such manner as may be prescribed”.

Part 2

Annual Increase in Rate of Pension

2    (1)
The Pensions Act 1995 (c.26) (Annual Increase in Rate of Pension) is amended

as follows.

      (2)
After section 51(1)(iii) there is added “(iv) which is not a conditionally indexed

scheme which complies with such requirements in relation to increases in the

rate of a pension as may be prescribed”.

Part 3

Restriction on Powers to Alter Schemes

3    (1)
Section 67 of the Pensions Act 1995 (c.26) (Restriction to Alter Schemes), is

amended as follows—

      (2)
After section 67(3)(b) there is added “(c) for a prescribed purpose relating to

the operation of a conditionally indexed scheme”.

Part 4

Pension Compensation Provisions

4    (1)
Schedule 7 to the Pensions Act 2004 (c.35) (Pensions Compensation

Provisions) is amended as follows—

      (2)
After paragraph 2 there is added “2A This Schedule shall be modified in

relation to a conditionally indexed scheme in such manner as may be

prescribed.”.’.

Notices of Amendments: 21st February 2008
1137

Pensions Bill, continued

Mr Nigel Waterson

Andrew Selous

2

Page  6,  line  4  [Clause  11],  leave out ‘wages, commission, bonuses and overtime’

and insert ‘and wages’.

Mr Nigel Waterson

Andrew Selous

3

Page  8,  line  17  [Clause  18],  at end insert—

‘(3)
The Secretary of State must report annually on the extent to which employers

operating schemes defined under subsection (1) have reduced their contribution.’.

Mr Nigel Waterson

Andrew Selous

4

Page  8,  line  35  [Clause  19],  at end insert—

‘(5)
The Secretary of State must report annually on the extent to which employers

operating schemes defined under subsection (1) have reduced their contribution.’.

Mr Nigel Waterson

Andrew Selous

5

Page  9,  line  41  [Clause  22],  at end insert—

‘(5)
The Secretary of State must report annually on the extent to which employers

operating schemes defined under subsection (1) have reduced their

contributions.’.

Mr Nigel Waterson

Andrew Selous

6

Page  26,  line  1  [Clause  53],  leave out subsection (3) and insert—

‘(3)
There shall be an absolute prohibition on transfers between the pension scheme

established under section 50 and other pension or savings schemes, and jobholder

contributions shall be limited to £3,600 in any one year.’.

Mr Nigel Waterson

Andrew Selous

7

Page  26,  line  1  [Clause  53],  leave out subsection (3).

Mr Nigel Waterson

Andrew Selous

8

Page  26,  line  6  [Clause  53],  leave out subsection (5).

Mr Nigel Waterson

Andrew Selous

9

Page  28,  line  29  [Clause  61],  at end insert—

‘(3A)
The Authority must within 12 months of the passing of this Act, and at such other

time as the Secretary of State directs, publish a report analysing the potential