Welfare Reform and Pensions Bill

Welfare Reform and Pensions Bill - continued	House of Lords
PART IV, PENSION SHARING - continued

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	"PART IVA
	REQUIREMENTS RELATING TO PENSION CREDIT BENEFIT
	CHAPTER I
	PENSION CREDIT BENEFIT UNDER OCCUPATIONAL SCHEMES
Scope of Chapter I.	101A. - (1) This Chapter applies to any occupational pension scheme whose resources are derived in whole or part from-
	(a) payments to which subsection (2) applies made or to be made by one or more employers of earners to whom the scheme applies, or
	(b) such other payments by the earner or his employer, or both, as may be prescribed for different categories of scheme.
	(2) This subsection applies to payments-
	(a) under an actual or contingent legal obligation, or
	(b) in the exercise of a power conferred, or the discharge of a duty imposed, on a Minister of the Crown, government department or any other person, being a power or duty which extends to the disbursement or allocation of public money.
Interpretation.	101B. In this Chapter-
	"scheme" means an occupational pension scheme to which this Chapter applies;
	"pension credit rights" means rights to future benefits under a scheme which are attributable (directly or indirectly) to a pension credit;
	"pension credit benefit", in relation to a scheme, means the benefits payable under the scheme to or in respect of a person by virtue of rights under the scheme attributable (directly or indirectly) to a pension credit;
	"normal benefit age", in relation to a scheme, means the earliest age at which a person who has pension credit rights under the scheme is entitled to receive a pension by virtue of those rights (disregarding any scheme rule making special provision as to early payment of pension on grounds of ill-health or otherwise).
Basic principle as to pension credit benefit.	101C. - (1) Normal benefit age under a scheme must be between 60 and 65.
	(2) A scheme must not provide for payment of pension credit benefit in the form of a lump sum at any time before normal benefit age, except in such circumstances as may be prescribed.
Form of pension credit benefit and its alternatives.	101D. - (1) Subject to subsection (2) and section 101E, a person's pension credit benefit under a scheme must be-
	(a) payable directly out of the resources of the scheme, or
	(b) assured to him by such means as may be prescribed.
	(2) Subject to subsections (3) and (4), a scheme may, instead of providing a person's pension credit benefit, provide-
	(a) for his pension credit rights under the scheme to be transferred to another occupational pension scheme or a personal pension scheme with a view to acquiring rights for him under the rules of the scheme, or
	(b) for such alternatives to pension credit benefit as may be prescribed.
	(3) The option conferred by subsection (2)(a) is additional to any obligation imposed by Chapter II of this Part.
	(4) The alternatives specified in subsection (2)(a) and (b) may only be by way of complete or partial substitute for pension credit benefit-
	(a) if the person entitled to the benefit consents, or
	(b) in such other cases as may be prescribed.
Discharge of liability where pension credit or alternative benefits secured by insurance policies or annuity contracts.	101E. - (1) A transaction to which section 19 applies discharges the trustees or managers of a scheme from their liability to provide pension credit benefit or any alternative to pension credit benefit for or in respect of a member of the scheme if and to the extent that-
	(a) it results in pension credit benefit, or any alternative to pension credit benefit, for or in respect of the member being appropriately secured (within the meaning of that section),
	(b) the transaction is entered into with the consent of the member or, if the member has died, of the member's widow or widower, and
	(c) such requirements as may be prescribed are met.
	(2) Regulations may provide that subsection (1)(b) shall not apply in prescribed circumstances.
	CHAPTER II
	TRANSFER VALUES
Power to give transfer notice.	101F. - (1) An eligible member of a qualifying scheme may by notice in writing require the trustees or managers of the scheme to use an amount equal to the cash equivalent of his pension credit benefit for such one or more of the authorised purposes as he may specify in the notice.
	(2) In the case of a member of an occupational pension scheme, the authorised purposes are-
	(a) to acquire rights allowed under the rules of an occupational pension scheme, or personal pension scheme, which is an eligible scheme;
	(b) to purchase from one or more insurance companies such as are mentioned in section 19(4)(a), chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy the prescribed requirements; and
	(c) in such circumstances as may be prescribed, to subscribe to other pension arrangements which satisfy prescribed requirements.
	(3) In the case of a member of a personal pension scheme, the authorised purposes are-
	(a) to acquire rights allowed under the rules of an occupational pension scheme, or personal pension scheme, which is an eligible scheme; and
	(b) in such circumstances as may be prescribed, to subscribe to other pension arrangements which satisfy prescribed requirements.
	(4) The cash equivalent for the purposes of subsection (1) shall-
	(a) in the case of a salary related occupational pension scheme, be taken to be the amount shown in the relevant statement under section 101H, and
	(b) in any other case, be determined by reference to the date the notice under that subsection is given.
	(5) The requirements which may be prescribed under subsection (2) or (3) include, in particular, requirements of the Inland Revenue.
	(6) In subsections (2) and (3), references to an eligible scheme are to a scheme-
	(a) the trustees or managers of which are able and willing to accept payment in respect of the member's pension credit rights, and
	(b) which satisfies the prescribed requirements.
	(7) In this Chapter, "transfer notice" means a notice under subsection (1).
Restrictions on power to give transfer notice.	101G. - (1) In the case of a salary related occupational pension scheme, the power to give a transfer notice may only be exercised if-
	(a) the member has been provided with a statement under section 101H, and
	(b) not more than 3 months have passed since the date by reference to which the amount shown in the statement is determined.
	(2) The power to give a transfer notice may not be exercised in the case of an occupational pension scheme if-
	(a) there is less than a year to go until the member reaches normal benefit age, or
	(b) the pension to which the member is entitled by virtue of his pension credit rights, or benefit in lieu of that pension, or any part of it has become payable.
	(3) Where an eligible member of a qualifying scheme-
	(a) is entitled to make an application under section 95 to the trustees or managers of the scheme, or
	(b) would be entitled to do so, but for the fact that he has not received a statement under section 93A in respect of which the guarantee date is sufficiently recent,
	he may not, if the scheme so provides, exercise the power to give them a transfer notice unless he also makes an application to them under section 95.
	(4) The power to give a transfer notice may not be exercised if a previous transfer notice given by the member to the trustees or managers of the scheme is outstanding.

Prepared 22 July 1999