House of Commons Public Bill Committee Proceedings

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Public Bill Committee Proceedings: 21st February 2008
68

Pensions Bill, continued

NEW SCHEDULES

Mr Nigel Waterson

Andrew Selous

Mr Stewart Jackson

Miss Julie Kirkbride

Mr John Greenway

Not called  NS1

To move the following Schedule:—

‘Provision for conditional indexed arrangements etc

Part 1

Basis of Revaluation

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

follows—


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 that benefit shall be revalued using the

conditional indexation method”.


In Schedule 3 (Methods of Revaluation 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
The Pensions Act 1995 (c.26) (Annual Increase in Rate of Pension) is amended

as follows—


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

amended as follows—


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

operation of a conditionally indexed scheme”.

Part 4

Pensions Compensation Provisions

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

Provisions) is amended as follows—

Public Bill Committee Proceedings: 21st February 2008
69

Pensions Bill, continued


After paragraph 2 to the Schedule there is added “2A This Schedule shall be

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

be prescribed.”.’.

Mr Mike O’Brien

Added  NS2

To move the following Schedule:—

‘Pension compensation on divorce etc: Scotland

1
The Family Law (Scotland) Act 1985 (c. 37) is amended as follows.

2
In section 8 (orders for financial provision)—

(a)
in subsection (1)—

(i)
after paragraph (baa) insert—

“(bab)
a pension compensation sharing order;”,

(ii)
after paragraph (ba) insert—

“(bb)
an order under section 12B(2);”,

(b)
subsection (4A) is repealed,

(c)
after subsection (7) add—

  “(8)
The court shall not, in the same proceedings, make both a pension

compensation sharing order and an order under section 12B(2) in

relation to the same                               PPF compensation.

      (9)
The court shall not make a pension compensation sharing order in

relation to                     rights to PPF compensation that—

(a)
derive from rights under a pension scheme which, at the

time the              Board of the Pension Protection Fund assumed

responsibility for the scheme,            was subject to an order made

under section 12A(2) or (3) in relation to the marriage or

(as the case may be) civil partnership or a previous one

between                      the same persons,

(b)
derive from rights under a pension scheme which were at

any              time the subject of a pension sharing order in relation

to the marriage or (as               the case may be) civil partnership or

a previous one between the same persons,

(c)
are or have been the subject of a pension compensation

sharing order               in relation to the marriage or (as the case may

be) civil partnership or a previous one between the same

persons, or

(d)
are or have been the subject of an order made under section

12B(2) in               relation to the marriage or (as the case may be)

civil partnership or a previous one between the same

persons.

    (10)
Where, as regards PPF compensation, the parties to a marriage or

the partners in a civil partnership have in effect a qualifying

agreement which contains a term relating to pension compensation

sharing, the court shall not—

(a)
make an order under section 12B(2); or

(b)
make a pension compensation sharing order,

Public Bill Committee Proceedings: 21st February 2008
70

Pensions Bill, continued


relating to the compensation unless it also sets aside the agreement

or term under section 16(1)(b) of this Act.

    (11)
For the purposes of subsection (10)—

(a)
the expression “term relating to pension compensation

sharing” is to be construed by reference to section 16(2AA)

of this Act; and

(b)
a qualifying agreement is one to which section 84(2) of the

Pensions Act 2008 relates.”

3
After section 8A insert—

“8B
Pension compensation sharing orders: apportionment of charges


The court may include in a pension compensation sharing order

provision about apportionment between the parties of any charge

under section 91 of the Pensions Act                 2008 or under corresponding

Northern Ireland legislation.”

4
In section 10 (sharing of value of matrimonial property or partnership

property)—

(a)
in subsection (5A), for the words from “compensation payable” to

“that Chapter” substitute “PPF compensation”,

(b)
for subsection (8B) substitute—

“(8B)
The Scottish Ministers may by regulations make provision for

the purposes of                      this Act about—

(a)
calculation and verification of PPF compensation,

(b)
apportionment of PPF compensation.

(8C)
Regulations under subsection (8B) may include provision—

(a)
for calculation or verification in a manner approved

by a             prescribed person,

(b)
by reference to regulations under section 86 of the

Pensions Act 2008.”

5
In section 12A (orders for payment of capital sum: pensions lump sums), in

subsection (7ZC), for the words “Notwithstanding the provisions of section

8(4A), for” substitute “For”.

6
After section 12A insert—

“12B
Order for payment of capital sum: pension compensation

(1)
This section applies where the court makes an order under section 8(2)

for payment of a capital sum (a “capital sum order”) by a party to a

marriage or a partner in a civil partnership (“the liable person”) in

circumstances where the matrimonial or (as the case may be)

partnership property within the meaning of section 10 includes any

rights to PPF compensation.

(2)
On making the capital sum order, the court may make an additional

order requiring the Board of the Pension Protection Fund, if at any

time any payment in respect of PPF compensation becomes due to the

liable person, to pay the whole or part of that payment to the other

party or (as the case may be) other partner (“the other person”).

(3)
Any such payment by the Board of the Pension Protection Fund—

(a)
shall discharge so much of its liability to the liable person as

corresponds to the amount of the payment, and

Public Bill Committee Proceedings: 21st February 2008
71

Pensions Bill, continued

(b)
shall be treated for all purposes as a payment made by the

liable person in or towards the discharge of the person’s

liability under the capital sum order.

(4)
Where the liability of the liable person under the capital sum order has

been discharged in whole or in part, other than by a payment by the

Board of the Pension Protection Fund, the court may, on an application

by any person having an interest, recall the order or vary the amount

specified in such an order as appears to the court appropriate in the

circumstances.

(5)
The court may not make an additional order under subsection (2) in

relation to rights to PPF compensation that—

(a)
derive from rights under a pension scheme which, at the time

the Board of the Pension Protection Fund assumed

responsibility for the scheme, was subject to an order made

under section 12A(2) or (3) in relation to the marriage or (as

the case may be) civil partnership or a previous one between

the same persons,

(b)
derive from rights under a pension scheme which were at any

time the subject of a pension sharing order in relation to the

marriage or (as the case may be) civil partnership or a

previous one between the same persons,

(c)
are or have been the subject of a pension compensation

sharing order in relation to the marriage or (as the case may

be) civil partnership or a previous one between the same

persons, or

(d)
are or have been the subject of an order made under subsection

(2) in relation to the marriage or (as the case may be) civil

partnership or a previous one between the same persons.”

7
In section 13 (order for periodical allowance), in subsection (2)(b), after the

words                         “pension sharing order” insert “or pension compensation sharing

order”.

8
In section 16 (agreements on financial provision)—

(a)
in subsection (2)(b), for the words “does not contain a term relating to

pension sharing” substitute “contains neither a term relating to pension

sharing nor a term relating to pension compensation sharing”,

(b)
in subsection (2)(c), after the word “sharing” in the first place where it

occurs insert “or pension compensation sharing”,

(c)
in subsection (2)(c)(i), after the word “sharing” insert “or (as the case

may be) the term relating to pension compensation sharing”,

(d)
after subsection (2A), insert—

“(2AA)
For the purpose of subsection (2), a term relating to pension

compensation sharing is a term corresponding to provision

which may be made in a pension compensation sharing order

and satisfying the requirements set out in section 84(1)(g) of

the Pensions Act 2008.”

9
In section 27 (interpretation)—

(a)
in subsection (1), before the definition of “pension sharing order”

insert—


““pension compensation sharing order” is an order

  which—

(a)
provides that one party’s shareable rights to

PPF               compensation be subject to pension

Public Bill Committee Proceedings: 21st February 2008
72

Pensions Bill, continued

compensation sharing for                 the benefit of the

other party, and

(b)
specifies the percentage value to be

transferred;”,

(b)
after subsection (1A) insert—

“(1B)
In subsection (1), in the definition of “pension compensation

sharing                   order”, the reference to shareable rights to PPF

compensation is to                 rights in relation to which pension

compensation sharing is available under Chapter 1 of Part 3 of

the Pensions Act 2008 or under corresponding Northern

Ireland legislation.

(1C)
In this Act—


“PPF compensation” means compensation payable

  under the pension         compensation provisions,

“the pension compensation provisions” means—

(a)
Chapter 3 of Part 2 of the Pensions Act 2004

and any                 regulations or order made under it,

(b)
Chapter 1 of Part 3 of the Pensions Act 2008

and any                 regulations or order made under it,

(c)
any provision corresponding to the

provisions mentioned in                paragraph (a) or (b)

in force in Northern Ireland.”’.

Mr Mike O’Brien

That certain written evidence already reported to the House be appended to the

proceedings of the Committee.

                                                                Agreed to

Bill, as amended, to be reported.