Pensions Bill

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Schedule 1 — The trustee corporation
Part 3 — Money
62

(b)
any information the Secretary of State directs, relating to the financial
position of the trustee corporation or any other matter.
      (3)
The Secretary of State must lay before Parliament a copy of each report
received under this paragraph.
Part 3
5
Money
Finance
18    (1)
The Secretary of State may give financial assistance to the trustee
corporation.
      (2)
The assistance—
10
(a)
may take the form of grants, loans, guarantees or indemnities;
(b)
may be given on conditions (which may include conditions about
repayment with or without interest).
19
The trustee corporation may make charges in connection with the exercise of
its functions.
15
Accounts
20    (1)
The trustee corporation must—
(a)
keep proper accounting records, and
(b)
prepare a statement of accounts in respect of each financial year.
      (2)
A statement under sub-paragraph (1)(b) must be prepared by the trustee
20
corporation in such form as the Secretary of State may direct.
      (3)
The trustee corporation must send a copy of a statement under sub-
paragraph (1)(b)—
(a)
to the Secretary of State, and
(b)
to the Comptroller and Auditor General.
25
      (4)
A copy of a statement must be sent under sub-paragraph (3) within such
period, beginning with the end of the financial year to which the statement
relates, as the Secretary of State may direct.
      (5)
The Comptroller and Auditor General must—
(a)
examine, certify and report on a statement received under this
30
paragraph, and
(b)
send a copy of the certified statement and of the report on it to the
Secretary of State as soon as possible.
      (6)
The Secretary of State must lay before Parliament a copy of the statement
and report sent under sub-paragraph (5)(b).
35

Pensions Bill
Schedule 1 — The trustee corporation
Part 4 — Supplementary
63

Part 4
Supplementary
Disqualification
21
In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975
(c. 24) (bodies of which all members are disqualified) insert at the
5
appropriate place—
“The trustee corporation established by section 65 of the
Pensions Act 2008.”
22
In Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification
Act 1975 (c. 25) (bodies of which all members are disqualified) insert at the
10
appropriate place—
“The trustee corporation established by section 65 of the
Pensions Act 2008.”
Records and freedom of information
23
In Schedule 1 to the Public Records Act 1958 (c. 51) (definition of public
15
records) in paragraph 3, insert at the appropriate place in Part 2 of the Table
(other establishments and organisations)—
“The trustee corporation established by section 65 of the
Pensions Act 2008.”
24
In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (c. 36) (public
20
authorities: miscellaneous) insert at the appropriate place—
“The trustee corporation established by section 65 of the
Pensions Act 2008.”
Equality
25
In Schedule 1A to the Race Relations Act 1976 (c. 74) (bodies subject to
25
general duty), in Part 2, under “Other Bodies, Etc” insert at the appropriate
place—
“The trustee corporation established by section 65 of the
Pensions Act 2008.”
Interpretation
30
26    (1)
In this Schedule—
“financial year” means such period as the Secretary of State may by
order prescribe;
“occupational pension scheme” and “personal pension scheme”—
(a)
in relation to England and Wales or Scotland, have the same
35
meanings as in the Pension Schemes Act 1993 (c. 48) (see
section 1 of that Act);
(b)
in relation to Northern Ireland, have the same meanings as in
the Pension Schemes (Northern Ireland) Act 1993 (c. 49) (see
section 1 of that Act);
40
“the relevant authority” means—
(a)
in relation to England and Wales or Scotland, the Secretary of
State;

Pensions Bill
Schedule 2 — Revaluation of accrued benefits etc
Part 1 — Revaluation of accrued pension benefits
64

(b)
in relation to Northern Ireland, the Department for Social
Development in Northern Ireland.
      (2)
In this Schedule references to the relevant authority's functions relating to
occupational pension schemes or personal pension schemes include such
functions conferred at any time after the passing of this Act.
5
Schedule 2
Section 87

Revaluation of accrued benefits etc
Part 1
Revaluation of accrued pension benefits
Amendments to Schedule 3 to the 1993 Act
10
1
This Part makes amendments to Schedule 3 to the Pension Schemes Act 1993
(c. 48) (methods of revaluing accrued pension benefits).
2
In paragraph 1 (the final salary method), for sub-paragraphs (1) to (3)
substitute—
    “(1)
The final salary method is to add to the amount that would be
15
payable but for Chapter 2 of Part 4, or regulations made under it,
the additional amount specified in sub-paragraph (1A), (1B), (1C)
or (1D) (whichever applies).
     (1A)
Where—
(a)
the termination of pensionable service occurs before 1st
20
January 1991, and
(b)
the whole of the member’s pensionable service falls on or
after 1st January 1985,

the additional amount is the appropriate higher revaluation
percentage of the accrued benefit.
25
     (1B)
Where—
(a)
the termination of pensionable service occurs before 1st
January 1991, and
(b)
some of the member’s pensionable service falls before 1st
January 1985,
30

the additional amount is such proportion of the appropriate
higher revaluation percentage of the accrued benefit as the
member’s pensionable service falling on or after 1st January 1985
bears to the member’s total pensionable service.
     (1C)
Where the termination of pensionable service occurs—
35
(a)
on or after 1st January 1991, but
(b)
before the day on which section 87 of the Pensions Act 2008
comes into force (“the 2008 Act commencement day”),

the additional amount is the appropriate higher revaluation
percentage of the accrued benefit.
40

Pensions Bill
Schedule 2 — Revaluation of accrued benefits etc
Part 1 — Revaluation of accrued pension benefits
65

     (1D)
Where the termination of pensionable service occurs on or after
the 2008 Act commencement day, the additional amount is the
aggregate of—
(a)
the appropriate higher revaluation percentage of so much
of the accrued benefit as is attributable to the member’s
5
pensionable service falling before the 2008 Act
commencement day, and
(b)
the appropriate lower revaluation percentage of so much
of the accrued benefit as is attributable to the member’s
pensionable service falling on or after that day.
10
     (1E)
In this paragraph “the accrued benefit” means the amount of the
pension or other benefit which on the termination date has
accrued to the member or to any other person in respect of the
member (excluding any part of that amount which consists of—
(a)
the member’s guaranteed minimum, or
15
(b)
the guaranteed minimum of the member’s widow,
widower or surviving civil partner).
     (2)
For the purposes of this paragraph, a member’s pensionable
service includes any notional pensionable service which is
credited to the member by the scheme (“notional service”).
20

But notional service shall not be taken into account in determining
which of sub-paragraphs (1A), (1B), (1C) and (1D) applies.
      (3)
For the purposes of determining the additional amount where
sub-paragraph (1B) applies, any notional service shall be taken to
have ended immediately before the member’s actual pensionable
25
service began.
     (3A)
For the purposes of determining the additional amount where
sub-paragraph (1D) applies, any notional service shall be treated
as falling on or after the 2008 Act commencement day only if, or to
the extent that, it is so treated for the purposes of the scheme.”
30
3     (1)
Paragraph 2 (the revaluation percentage and the appropriate revaluation
percentage) is amended as follows.
      (2)
In sub-paragraph (1), for “specify a relevant percentage for each period”
substitute “specify (so far as it is necessary to do so)—
(a)
a higher revaluation percentage, and
35
(b)
a lower revaluation percentage,

for each period”.
      (3)
For sub-paragraph (3) substitute—
    “(3)
The higher revaluation percentage which the Secretary of State is
to specify in relation to a revaluation period is the lesser of—
40
(a)
the percentage which appears to the Secretary of State to be
the percentage increase in the general level of prices in
Great Britain during the period which is the reference
period in relation to the revaluation period (“the inflation
percentage”), and
45
(b)
the higher maximum rate.

Pensions Bill
Schedule 2 — Revaluation of accrued benefits etc
Part 2 — Revaluation of accrued amounts etc
66

     (3A)
The lower revaluation percentage which the Secretary of State is to
specify in relation to a revaluation period is the lesser of—
(a)
the percentage which appears to the Secretary of State to be
the inflation percentage, and
(b)
the lower maximum rate.”
5
      (4)
For sub-paragraphs (6) and (7) substitute—
    “(6)
For the purposes of sub-paragraph (3)(b) and (3A)(b)—
“the higher maximum rate”, in relation to a revaluation
period, is—
(a)
in the case of a revaluation period of 12 months, 5
10
per cent; and
(b)
in any other case, the percentage that would be the
inflation percentage had the general level of prices
increased at the rate of 5 per cent compound per
annum during the reference period in question;
15
“the lower maximum rate”, in relation to a revaluation
period, is—
(a)
in the case of a revaluation period of 12 months, 2.5
per cent; and
(b)
in any other case, the percentage that would be the
20
inflation percentage had the general level of prices
increased at the rate of 2.5 per cent compound per
annum during the reference period in question.
      (7)
In paragraph 1—
“the appropriate higher revaluation percentage” means the
25
higher revaluation percentage specified in the last
calendar year before the date on which the member attains
normal pension age as the higher revaluation percentage
for the revaluation period which is of the same length as
the number of complete years in the pre-pension period;
30
“the appropriate lower revaluation percentage” has a
corresponding meaning.”
Part 2
Revaluation of accrued amounts etc
Amendments to Schedule 7 to the 2004 Act
35
4
This Part makes amendments to Schedule 7 to the Pensions Act 2004 (c. 35)
(pension compensation provisions).
5     (1)
Paragraph 12 (active members who have not attained normal pension age at
assessment date: the revaluation amount for the revaluation period) is
amended as follows.
40
      (2)
In sub-paragraph (3), for paragraph (b) substitute—
“(b)
in any other case, the aggregate of—
(i)
the higher revaluation percentage of so much of the
accrued amount as is attributable to the active
member’s pensionable service falling before the
45
day on which section 87 of the Pensions Act 2008

Pensions Bill
Schedule 2 — Revaluation of accrued benefits etc
Part 2 — Revaluation of accrued amounts etc
67

comes into force (“the 2008 Act commencement
day”), and
(ii)
the lower revaluation percentage of so much of the
accrued amount as is attributable to the active
member’s pensionable service falling on or after
5
that day.”
      (3)
After sub-paragraph (3) insert—
   “(3A)
For the purposes of sub-paragraph (3)(b)—
(a)
any service within paragraph 36(4)(b) (notional
pensionable service) is to be treated as falling on or after
10
the 2008 Act commencement day if, or to the extent that, it
is so treated for the purposes of the scheme;
(b)
regulations may make provision in relation to cases where
it is unclear whether or not any particular pensionable
service (either actual or notional) falls, or is to be treated as
15
falling, on or after that day.”
      (4)
For sub-paragraphs (4) and (5) substitute—
    “(4)
In sub-paragraph (3)(b)—
“the higher revaluation percentage” means the lesser of—
(a)
the percentage increase in the general level of
20
prices in Great Britain during the revaluation
period determined in the prescribed manner (“the
inflation percentage”), and
(b)
the higher maximum revaluation rate;
“the lower revaluation percentage” means the lesser of—
25
(a)
the inflation percentage, and
(b)
the lower maximum revaluation rate.
      (5)
For the purposes of sub-paragraph (4)—
“the higher maximum revaluation rate”, in relation to the
revaluation period, is—
30
(a)
if that period is a period of 12 months, 5%, and
(b)
in any other case, the percentage that would be the
inflation percentage had the general level of prices
in Great Britain increased at the rate of 5%
compound per annum during that period;
35
“the lower maximum revaluation rate”, in relation to the
revaluation period, is—
(a)
if that period is a period of 12 months, 2.5%, and
(b)
in any other case, the percentage that would be the
inflation percentage had the general level of prices
40
in Great Britain increased at the rate of 2.5%
compound per annum during that period.

This is subject to paragraph 29 (power of Board to determine
maximum revaluation rates etc).”
6     (1)
Paragraph 17 (deferred members who have not attained normal pension age
45
at assessment date: the revaluation amount for the second revaluation
period) is amended as follows.

Pensions Bill
Schedule 2 — Revaluation of accrued benefits etc
Part 2 — Revaluation of accrued amounts etc
68

      (2)
In sub-paragraph (3), for paragraph (b) substitute—
“(b)
in any other case, the aggregate of—
(i)
the higher revaluation percentage of so much of the
relevant amount as is attributable to the deferred
member’s pensionable service falling before the
5
day on which section 87 of the Pensions Act 2008
comes into force (“the 2008 Act commencement
day”), and
(ii)
the lower revaluation percentage of so much of the
relevant amount as is attributable to the deferred
10
member’s pensionable service falling on or after
that day.”
      (3)
After sub-paragraph (3) insert—
   “(3A)
For the purposes of sub-paragraph (3)(b)—
(a)
any service within paragraph 36(4)(b) (notional
15
pensionable service) is to be treated as falling on or after
the 2008 Act commencement day if, or to the extent that, it
is so treated for the purposes of the scheme;
(b)
regulations may make provision in relation to cases where
it is unclear whether or not any particular pensionable
20
service (either actual or notional) falls, or is to be treated as
falling, on or after that day.”
      (4)
For sub-paragraphs (4) and (5) substitute—
    “(4)
In sub-paragraph (3)—
“the higher revaluation percentage” means the lesser of—
25
(a)
the percentage increase in the general level of
prices in Great Britain during the revaluation
period determined in the prescribed manner (“the
inflation percentage”), and
(b)
the higher maximum revaluation rate;
30
“the lower revaluation percentage” means the lesser of—
(a)
the inflation percentage, and
(b)
the lower maximum revaluation rate;
“the relevant amount” means the aggregate of—
(a)
the accrued amount, and
35
(b)
the revaluation amount for the first revaluation
period (see paragraph 16).
      (5)
For the purposes of sub-paragraph (3)—
“the higher maximum revaluation rate”, in relation to the
second revaluation period, is—
40
(a)
if that period is a period of 12 months, 5%, and
(b)
in any other case, the percentage that would be the
inflation percentage had the general level of prices
in Great Britain increased at the rate of 5%
compound per annum during that period;
45
“the lower maximum revaluation rate”, in relation to the
second revaluation period, is—
(a)
if that period is a period of 12 months, 2.5%, and