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Increase in state pension age |
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13 | Increase in pensionable age for men and women |
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(1) | Schedule 3 amends section 126 of, and Part 1 of Schedule 4 to, the Pensions Act |
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1995 (c. 26) for the purpose of increasing the pensionable age for men and |
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women progressively over a period of 22 years beginning with 6th April 2024. |
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(2) | Part 8 of Schedule 1 contains consequential amendments. |
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(3) | The amendments made by that Part of that Schedule have effect as from 6th |
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Occupational and personal pension schemes |
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14 | Conversion of guaranteed minimum pensions |
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(1) | After section 13(1) of the Pension Schemes Act 1993 (c. 48) (contracted-out |
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scheme: requirement for guaranteed minimum pension) insert— |
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“(1A) | But a scheme may be amended so as to omit provision of the kind |
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specified in subsection (1)(a) and (b) if the conditions specified in |
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section 24B are satisfied.” |
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(2) | After section 17(1) of that Act (minimum pension for survivors) insert— |
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“(1A) | But a scheme may be amended so as to omit provision of the kind |
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specified in subsection (1) if the conditions specified in section 24B are |
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(3) | Before section 25 of that Act (before the italic cross-heading) insert— |
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“24A | Conversion of guaranteed minimum pension into other benefits: |
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In this section and sections 24B to 24H— |
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(a) | the rules specified in sections 13(1)(a) and (b) and 17(1) are |
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referred to as the “guaranteed minimum pension rules”, |
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(b) | “GMP conversion” means amendment of the scheme in relation |
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to an earner so that it no longer contains the guaranteed |
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(c) | a “GMP-converted scheme” is a scheme which has been subject |
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(d) | “the conversion date” means the date on which that amendment |
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(e) | “the pre-conversion benefits” means the benefits provided |
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under the scheme immediately before the conversion date |
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(disregarding money purchase benefits), |
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(f) | “the post-conversion benefits” means the benefits which are |
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provided under the converted scheme (disregarding money |
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|
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(g) | “the converted scheme” means the scheme as it has effect |
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immediately after conversion, and |
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(h) | “the trustees” in relation to a scheme means the trustees, |
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managers or other persons responsible under the scheme for |
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effecting amendments of it. |
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24B | The conversion conditions |
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(1) | This section specifies the conditions referred to in sections 13(1A) and |
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17(1A) (for exemption from the requirement to guarantee a minimum |
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(2) | Condition 1 is that the post-conversion benefits must be actuarially at |
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least equivalent to the pre-conversion benefits. |
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(3) | Condition 2 is that if the earner was entitled immediately before the |
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conversion date to the payment of a pension under the scheme, the |
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converted scheme does not provide for a reduction of, or have the effect |
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of reducing, the amount of that pension immediately after conversion. |
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(4) | Condition 3 is that the post-conversion benefits must not include |
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money purchase benefits, apart from any money purchase benefits |
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provided under the scheme immediately before the conversion date. |
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(5) | Condition 4 is that the converted scheme provides survivors’ benefits |
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in accordance with section 24D in such circumstances, and during such |
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periods, as are prescribed by regulations. |
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(6) | Condition 5 is that the procedural requirements of section 24E have |
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(7) | In applying these conditions to a scheme in respect of an earner— |
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(a) | it is immaterial whether or not on the conversion date the |
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scheme was also converted in respect of other earners, and |
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(b) | it is immaterial (except for Condition 2) whether or not on the |
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conversion date the earner was entitled to the payment of a |
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pension under the scheme. |
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24C | Actuarial equivalence |
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Regulations may make provision for determining actuarial equivalence |
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for the purpose of Condition 1 of section 24B. |
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(1) | This section specifies the benefits mentioned in Condition 4 of section |
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(2) | The first benefit is that if the earner dies (whether before or after |
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attaining normal pension age) leaving a widow, she is entitled to a |
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pension of at least half the value of the pension to which the earner |
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would have been entitled by reference to employment during the |
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(a) | beginning with 6th April 1978, and |
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(b) | ending with 5th April 1997. |
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(3) | The second benefit is that if the earner dies (whether before or after |
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attaining normal pension age) leaving a widower or surviving civil |
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partner, he or she is entitled to a pension of at least half the value of the |
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|
| |
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pension to which the earner would have been entitled by reference to |
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employment during the period— |
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(a) | beginning with 6th April 1988, and |
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(b) | ending with 5th April 1997. |
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24E | Procedural requirements |
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(1) | This section specifies the procedural requirements that must be |
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complied with in order to satisfy Condition 5 of section 24B. |
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(2) | The employer in relation to the scheme must consent to the GMP |
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(3) | The trustees must take all reasonable steps to— |
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(a) | consult the earner in advance, and |
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(b) | notify all members, and survivors, affected by the GMP |
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conversion before, or as soon as is reasonably practicable after, |
| |
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(4) | The Commissioners for Her Majesty’s Revenue and Customs must be |
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notified on or before the conversion date— |
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(a) | that the GMP conversion will occur or has occurred, and |
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(b) | that it affects the earner. |
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(1) | Regulations may prescribe— |
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(a) | restrictions on the transfer of the earner’s accrued rights under |
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(b) | conditions which must be complied with on the transfer of the |
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earner’s accrued rights under a GMP-converted scheme. |
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(2) | Section 20(2) and (5) shall apply to regulations under this section. |
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(3) | Where a member of a non-GMP-converted scheme makes an |
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application under section 95(1), the trustees may with his consent |
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adjust any guaranteed cash equivalent so as to reflect rights that would |
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have accrued if the scheme had been subject to GMP conversion in |
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accordance with Conditions 1 to 4 of section 24B. |
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24G | Powers to amend schemes |
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(1) | The trustees of an occupational pension scheme may by resolution |
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modify it so as to effect GMP conversion (whether in relation to present |
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earners, pensioners or survivors) in accordance with the conditions in |
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(2) | The subsisting rights provisions within the meaning of section 67 of the |
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Pensions Act 1995 (c. 26) shall not apply to a power conferred by an |
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occupational pension scheme to modify the scheme in so far as the |
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power enables GMP conversion in accordance with the conditions in |
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(3) | Where a scheme is amended to effect GMP conversion the trustees may |
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include other amendments which they think are necessary or desirable |
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as a consequence of, or to facilitate, the GMP conversion. |
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|
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(4) | Where an occupational pension scheme is being wound up, the trustees |
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may, before the winding up is completed, adjust rights under the |
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scheme so as to reflect what would have happened if the scheme had |
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been subject to GMP conversion in accordance with Conditions 1 to 4 |
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(5) | In the application of section 24E by virtue of subsection (1) above, a |
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reference to the earner includes a reference to a pensioner or survivor |
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whose pension is subjected to GMP conversion. |
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24H | Enforcement of GMP conversion conditions |
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(1) | If the Regulatory Authority thinks that the conditions of section 24B |
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have not been satisfied in relation to an amendment, modification or |
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adjustment effected in accordance with any of sections 13(1A), 17(1A), |
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24F and 24G, the Regulatory Authority may make an order declaring |
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the amendment, modification or adjustment void— |
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(a) | in respect of a specified person or class of person, |
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(b) | to a specified extent, and |
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(c) | as from a specified time. |
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(2) | Where the Regulatory Authority makes an order under subsection (1) |
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(a) | require the trustees of the scheme concerned to take specified |
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(b) | declare that specified action of the trustees shall not be treated |
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as a contravention of the scheme if it would not have been a |
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contravention if the order under subsection (1) had not been |
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(3) | An order may be made under subsection (1) before or after the |
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amendment, modification or adjustment takes effect. |
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(4) | If the Regulatory Authority thinks that the process of effecting a GMP |
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conversion of a scheme has been commenced and that a relevant |
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condition of section 24B is not being complied with, or may not be |
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complied with, the Regulatory Authority may by order— |
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(a) | prohibit the taking of further steps in the GMP conversion |
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(whether generally or in relation to specified steps), and |
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(b) | require the trustees of the scheme to take specified steps before |
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resuming the process of GMP conversion. |
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(5) | Section 10 of the Pensions Act 1995 (civil penalties) shall apply to a |
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trustee who has failed to take all reasonable steps to secure compliance |
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with the conditions of section 24B in relation to an amendment, |
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modification or adjustment effected in accordance with any of sections |
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13(1A), 17(1A), 24F and 24G.” |
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(4) | In section 9(2A) of the Pension Schemes Act 1993 (c. 48) (requirements for |
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certification) for “sections 13 to 23” substitute “sections 13 to 24E”. |
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(5) | At the end of section 47 of that Act (deductions from social security payments) |
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“(9) | For the purposes of section 46, a person shall be treated as entitled to a |
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guaranteed minimum pension to which, in the opinion of the |
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Commissioners for Her Majesty’s Revenue and Customs, he would |
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|
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have been entitled but for the amendment of a scheme so that it no |
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longer contains the guaranteed minimum pension rules. |
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(10) | Where the earner’s accrued rights have been transferred after the |
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amendment of the scheme, in making the calculation under subsection |
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(9) the Commissioners shall assume the application of section 16(1) |
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(11) | In making the calculation under subsection (9) the Commissioners shall |
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ignore any effect of the scheme being wound up.” |
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(6) | In section 97(5) of the Pensions Act 2004 (c. 35) (Pensions Regulator: special |
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procedure) after paragraph (t) insert— |
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“(ta) | a power under section 24H of the Pension Schemes Act 1993;”. |
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(7) | At the end of Part 1 of Schedule 2 to that Act (reserved regulatory functions: |
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Pension Schemes Act 1993) add— |
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“3A | A power under section 24H (compliance with conditions of |
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conversion of guaranteed minimum pension).” |
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(8) | Subsection (9) applies where— |
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(a) | a person has been in receipt of a guaranteed minimum pension and a |
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Category A or Category B retirement pension, |
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(b) | the guaranteed minimum pension has been increased in accordance |
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with section 15(1) of the Pension Schemes Act 1993 (c. 48) or the |
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Category A or Category B retirement pension has been increased in |
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accordance with paragraph 5 of Schedule 5 to the SSCBA (increase of |
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pension where commencement of guaranteed minimum pension |
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(c) | the pension scheme under which the guaranteed minimum pension is |
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paid is subject to GMP conversion (within the meaning of section 24A |
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of the Pension Schemes Act 1993 inserted by subsection (3) above), and |
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(d) | an order under section 150(2) of the Administration Act would have |
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applied to the person in respect of the increase mentioned in paragraph |
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(b) above but for the scheme having been subject to GMP conversion. |
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(9) | The person’s Category A or Category B retirement pension shall be increased |
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by the amount by which it would have increased as a result of the order. |
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(10) | In section 186 of the Pension Schemes Act 1993 (parliamentary control of orders |
| |
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(a) | before subsection (3)(a) insert— |
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“(a) | regulations made under section 24B(5), or”, |
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(b) | renumber the existing paragraphs of subsection (3), and |
| |
(c) | in subsection (4) for “(a) or (c)” substitute “(b) or (d)”. |
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15 | Abolition of contracting-out for defined contribution pension schemes |
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(1) | Any certificate which is either— |
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(a) | a contracting-out certificate in relation to a money purchase contracted- |
| |
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(b) | an appropriate scheme certificate, |
| |
| and is in force immediately before the abolition date, ceases to have effect on |
| |
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|
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“the abolition date” means the day appointed under section 41 for the |
| |
coming into force of subsection (1); |
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“contracting-out certificate”, “money purchase contracted-out scheme” |
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and “appropriate scheme certificate” have the meanings given by |
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section 181(1) of the Pension Schemes Act 1993 (c. 48) (as in force |
| |
immediately before that day). |
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(a) | Parts 1 and 2 contain amendments which are consequential on, or |
| |
related to, the provision made by subsection (1), and |
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(b) | Part 3 contains savings relating to amendments made by Part 1. |
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(4) | The amendments made by Part 1 of that Schedule have effect as from the |
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abolition date (but any power to make regulations conferred by those |
| |
amendments may be exercised at any time so as to make regulations having |
| |
effect as from the abolition date). |
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(5) | The Secretary of State may by regulations make— |
| |
(a) | such consequential, incidental or supplemental provision, and |
| |
(b) | such transitional, transitory or saving provision, |
| |
| as he thinks necessary or expedient in connection with, or in consequence of, |
| |
the provisions of subsection (1) and Schedule 4. |
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(6) | Regulations under subsection (5) may in particular amend, repeal or revoke |
| |
any provision of any Act or subordinate legislation (whenever passed or |
| |
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(7) | No regulations which amend or repeal any provision of an Act may be made |
| |
under this section unless a draft of the regulations has been laid before and |
| 25 |
approved by a resolution of each House of Parliament. |
| |
(8) | A statutory instrument containing regulations under this section that do not |
| |
fall within subsection (7) is subject to annulment in pursuance of a resolution |
| |
of either House of Parliament. |
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16 | Dispute resolution arrangements |
| |
(1) | Section 273 of the Pensions Act 2004 (c. 35), which substitutes new sections 50 |
| |
to 50B for section 50 of the Pensions Act 1995 (c. 26), is amended as follows. |
| |
(2) | In subsection (1) of the new section 50 (requirement for dispute resolution |
| |
arrangements) after “arrangements” insert “complying with the requirements |
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(3) | In subsection (2) of that section, for “such arrangements as are required by this |
| |
section” substitute “arrangements”. |
| |
(4) | After subsection (4) of that section insert— |
| |
“(4A) | The dispute resolution arrangements may make provision for securing |
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that an application for the resolution of a pension dispute may not be |
| |
made to the trustees or managers unless— |
| |
| |
| |
|
| |
| |
(a) | the matters in dispute have been previously referred to a person |
| |
of a description specified in the arrangements (“the specified |
| |
person”) in order for him to consider those matters, and |
| |
(b) | the specified person has given his decision on those matters, |
| |
| and for enabling the specified person’s decision to be confirmed or |
| 5 |
replaced by the decision taken by the trustees or managers on the |
| |
application, after reconsidering those matters.” |
| |
(5) | After subsection (5) of that section insert— |
| |
“(5A) | In a case where a reference is made to the specified person in |
| |
accordance with provision made under subsection (4A), subsection (5) |
| 10 |
applies in relation to the specified person as it applies in relation to the |
| |
trustees or managers in a case where an application for the resolution |
| |
of a pension dispute is made to them.” |
| |
(6) | In subsection (6) of that section, after “arrangements” insert “in pursuance of |
| |
| 15 |
(7) | In subsection (1) of the new section 50B (dispute resolution procedure) for |
| |
“under section 50 must” substitute “in pursuance of section 50(4) must (in |
| |
accordance with section 50(6))”. |
| |
(8) | For subsection (3) of that section substitute— |
| |
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(a) | must include provision requiring an application to which |
| |
subsection (3A) applies to be made by the end of such |
| |
reasonable period as is specified; |
| |
(b) | may include provision about the time limits for making such |
| |
other applications for the resolution of pension disputes as are |
| 25 |
| |
(3A) | This subsection applies to— |
| |
(a) | any application by a person with an interest in a scheme as |
| |
mentioned in section 50A(1)(e), and |
| |
(b) | any application by a person with an interest in a scheme as |
| 30 |
mentioned in section 50A(1)(f) who is claiming to be such a |
| |
person as is mentioned in section 50A(1)(e).” |
| |
(9) | In subsection (4) of that section, in paragraph (c), after “required” insert “in |
| |
relation to such an application”. |
| |
(10) | After subsection (4) of that section insert— |
| 35 |
“(4A) | The provision made under subsection (4)(c) may include provision for |
| |
decisions of the trustees or managers to be taken on their behalf by one |
| |
or more of their number.” |
| |
| |
17 | Removal of Secretary of State’s role in approving actuarial guidance |
| 40 |
Schedule 5 contains amendments removing requirements for, or powers to |
| |
require, certain forms of actuarial guidance to be approved by the Secretary of |
| |
| |
| |
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|
