House of Commons Amendments

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Notices of Amendments: 18th April 2008
1733

Pensions Bill, continued

“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withdrawn by the member as and when he elects.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

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.’.

Notices of Amendments: 18th April 2008
1734

Pensions Bill, continued

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”.’.

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.’.

Notices of Amendments: 18th April 2008
1735

Pensions Bill, continued

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.’.

Investment principles

Mr Nigel Waterson

Andrew Selous

James Duddridge

NC12

To move the following Clause:—

‘The Authority must have regard to the United Nations principles for responsible

investment (“UN PRI”) and adherence to those principles will be part of the

contractual arrangements with fund managers in respect of—

(a)
addressing environmental, social and corporate governance issues in

investment policy statements;

(b)
assessing the capabilities of internal and external investment managers to

incorporate such issues;

(c)
asking investment managers to report on their engagement with such

issues;

(d)
including UN PRI requirements in requests for proposals;

Notices of Amendments: 18th April 2008
1736

Pensions Bill, continued

(e)
aligning investment mandates, monitoring procedures and performance

indicators with the UN PRI.’.

Periodic reviews

Mr Nigel Waterson

Andrew Selous

James Duddridge

NC13

To move the following Clause:—

‘The Regulator, in conjunction with the providers and employers of qualifying

schemes, may conduct risk-based periodic reviews to determine whether an

employer has consistently paid contributions lower than those which would have

been required under Personal Accounts.’.

Penalties for failure to comply with requirements on consultation

Mr Terry Rooney

NC14

To move the following Clause:—

‘(1)
The Pensions Act 2004 (c. 35) is amended as follows.

(2)
After section 261 (further provisions about regulations relating to consultation)

insert—

“261A
Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to

any person who has failed to comply with any requirement imposed

under sections 259 to 261 or the regulations made under them.”’.

Notices of Amendments: 18th April 2008
1737

Pensions Bill, continued

Regulations relating to indexation and revaluation

Mr Nigel Waterson

Andrew Selous

James Duddridge

NC15

To move the following Clause:—

‘The Secretary of State shall make regulations prescribing circumstances in

which a statutory override can be applied that enables scheme rules to be

amended to reflect the Pensions Act 2004 changes to the indexation cap for

service going forward and for the change in the revaluation cap introduced under

section 87.’.

Earnings link

Jim Cousins

Ms Katy Clark

Harrry Cohen

Jon Trickett

Colin Burgon

Lynne Jones

Total signatories: 17

Kate Hoey

Kelvin Hopkins

Jon Cruddas

Frank Dobson

David Taylor

Mr Robert Marshall-Andrews

Mr Gordon Prentice

Mr Martin Caton

Mr Michael Meacher

Mr Austin Mitchell

Mrs Linda Riordan

NC16

To move the following Clause:—

‘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, no later than

the publication of the Pre-Budget Report for the financial year 2009-10.’.

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

Danny Alexander

Paul Rowen

NC20

To move the following Clause:—

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

section 58 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,

Notices of Amendments: 18th April 2008
1738

Pensions Bill, continued

(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 10 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.’.

Uprating pensions in line with earnings

Danny Alexander

Paul Rowen

NC21

To move the following Clause:—

‘The Pensions Act 2007 is amended as follows—

“In Section 5, subsection 4, delete from ‘means’ to end and insert ‘the tax year

beginning 1st April 2009’.”.’.

Terminally ill claimants and the Pension Protection Fund

Mr Mark Hendrick

NC22

To move the following Clause:—

‘(1)
Where the Board is satisfied that a qualifying member is “terminally ill”, that

member, regardless of whether they have reached normal pension age, shall be

entitled to a lump sum payment equal to twice their annual entitlement under the

scheme if they retired at normal pension age.

(2)
A person is “terminally ill” at any time if at that time they suffer from a

progressive disease and their death in consequence of that disease can reasonably

be expected within six months.’.

Notices of Amendments: 18th April 2008
1739

Pensions Bill, continued

Mr Nigel Waterson

Andrew Selous

James Duddridge

29

Page  2,  line  28  [Clause  3],  leave out subsection (5) and insert—

‘( )
Subsection (2) does not apply if there are prescribed arrangements under which

the jobholder is entitled to become an active member, with effect from the

automatic enrolment date, of a qualifying scheme which is a personal pension

scheme of a prescribed description.

( )
An order will be made under this section to prescribe the terms under which it is

applicable, and the basis on which its application may be withdrawn with respect

to specific scheme providers or employers.’.

Danny Alexander

Paul Rowen

38

Page  2,  line  37  [Clause  3],  at end insert—

‘(8)
The Secretary of State must publish an annual report on the impact of means-

tested benefits on automatically enrolled members of the scheme established

under section 58.

(9)
Any report published under subsection (8) shall include details on the number of

pensioners facing marginal deduction rates of 40 per cent. and above.’.

Danny Alexander

Paul Rowen

37

Page  6,  line  4  [Clause  9],  leave out lines 5 to 7 and insert ‘that all jobholders and

workers are entitled to 30 minutes of one to one generic advice either by phone or in

person, depending on their preference, that is—

(a)
independent,

(b)
publicly funded, and

(c)
delivered through at least one advice centre in every parliamentary

constituency.

(3)
A scheme under section 58 may not be implemented before the entitlement set out

in subsection (2) can be delivered.

(4)
The Secretary of State must publish an annual report on the cost of delivering the

entitlement set out in subsection (2).’.

Mr Nigel Waterson

Andrew Selous

2

Page  6,  line  40  [Clause  12],  leave out ‘wages, commission, bonuses and overtime’

and insert ‘and wages’.