House of Commons Public Bill Committee Proceedings

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Session 2007 - 08
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Other Bills before Parliament

Public Bill Committee Proceedings: 19th February 2008
52

Pensions Bill, continued

Transitional period for defined benefits and hybrid schemes

Mr Mike O’Brien

Added  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—

(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.

Public Bill Committee Proceedings: 19th February 2008
53

Pensions Bill, continued

(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).’.

Disclosure of tax information etc

Mr Mike O’Brien

Added  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

Public Bill Committee Proceedings: 19th February 2008
54

Pensions Bill, continued

(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).

(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)”.’.

Employment Appeal Tribunal

Mr Mike O’Brien

Added  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,”.’.

Financial assistance scheme

Mr Mike O’Brien

Added  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,”.

Public Bill Committee Proceedings: 19th February 2008
55

Pensions Bill, continued

(4)
Omit the definition of “scheme’s pension liabilities” and the words from “and a

qualifying pension scheme” to the end.’.

Appointment of trustees

Mr Mike O’Brien

Added  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)”.’.

Prohibited recruitment conduct

Mr Mike O’Brien

Added  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

Public Bill Committee Proceedings: 19th February 2008
56

Pensions Bill, continued

(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.

Compliance notices

Mr Mike O’Brien

Added  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.’.

Penalty notices

Mr Mike O’Brien

Added  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—

Public Bill Committee Proceedings: 19th February 2008
57

Pensions Bill, continued

(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.’.

Review of notices and references to Pensions Regulator Tribunal

Mr Mike O’Brien

Added  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.’.

Offence of offering financial inducements

Mr Nigel Waterson

Andrew Selous

Mr Stewart Jackson

Miss Julie Kirkbride

Mr John Greenway

Not called  NC1

To move the following Clause:—

‘An offence is committed if an employer offers financial inducements to opt out

of an automatic enrolment scheme.’.

Public Bill Committee Proceedings: 19th February 2008
58

Pensions Bill, continued

Projections of numbers of those on means-tested benefits

Mr Nigel Waterson

Andrew Selous

Mr Stewart Jackson

Miss Julie Kirkbride

Mr John Greenway

Not called  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 shall be

postponed for at least 12 months after the date of publication.

(3)
The Secretary of State shall publish any proposals for reform concurrently with

the publication of the projections under subsection (1).’

.

Restoring link with earnings

Mr Nigel Waterson

Andrew Selous

Mr Stewart Jackson

Miss Julie Kirkbride

Mr John Greenway

Withdrawn  NC3

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.’.

Transitional assistance

Mr Nigel Waterson

Andrew Selous

Mr Stewart Jackson

Miss Julie Kirkbride

Mr John Greenway

Withdrawn  NC4

To move the following Clause:—