Pensions Bill

House of Lords

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Pensions Bill

Pensions Bill
Schedule 4 — Abolition of contracting-out for defined contribution pension schemes
Part 2 — Further amendments
62

51
Omit section 42A (reduced rates of contributions, and rebates, for members
of money purchase contracted-out schemes etc.).
52
Omit section 43 (payment of minimum contributions to personal pension
schemes).
53
Omit section 45 (amount of minimum contributions).
5
54
Omit section 45B (money purchase and personal pension schemes:
verification of ages).
55
In section 50 (powers of HMRC to approve arrangements for scheme ceasing
to be certified) in subsection (4) (regulations may provide for various
provisions of the Act to have effect with modifications where arrangements
10
are approved) for “, 25A to 33 and 43 to 45” substitute “and 25A to 33”.
56
In section 164 (Crown employment) in subsection (2) (employees of Crown
to be treated as employed earners for certain purposes) in paragraph (b)
omit “, 43 and 45”.
57    (1)
Section 177 (general financial arrangements) is amended as follows.
15
      (2)
In subsection (2) (amounts to be paid out of the National Insurance Fund)—
(a)
in paragraph (za) (payments by HMRC under various provisions)
omit “or section 42A(2C) or (3)”;
(b)
omit paragraph (a) (minimum contributions paid by HMRC under
section 43).
20
      (3)
In subsection (7) (amounts to be paid into National Insurance Fund) in
paragraph (a), omit “, 42A(2D) or (5) or 43(5) or (6)”.
58    (1)
Section 181 (interpretation) is amended as follows.
      (2)
In subsection (1), omit the definition of “minimum contributions”.
      (3)
In subsection (4) (regulations may prescribe the persons who are to be
25
regarded as members or prospective members of an occupational scheme
etc.) omit “, 43”.
59    (1)
Schedule 2 (certification regulations) is amended as follows.
      (2)
In Part 1 (occupational pension schemes) in paragraph 4 (regulations may
modify certain provisions of Part 3 in cases where person employed in two
30
or more employments) in sub-paragraph (1), for “and 66 to 68” substitute “,
67 and 68”.
      (3)
In paragraph 5 (state scheme premiums) in sub-paragraph (1) (regulations
may require provision of information to HMRC for purpose of certain
provisions) for the words from “sections 37” to the end substitute “sections
35
37, 38, 50 to 63 and 159(1) to (3) and (6) (except as they apply to personal
pension schemes, the members of such schemes or rights in respect of
them)”.
      (4)
In paragraph 6 (schemes covering different employers) in sub-paragraph (1)
(regulations may modify certain provisions in cases where earner under
40
different employers qualifies for benefits of same occupational pension
scheme) for “and 66 to 68” substitute “, 67 and 68”.
60    (1)
Paragraph 2 of Schedule 4 (priority in bankruptcy etc.: employer’s
contributions to occupational pension scheme) is amended as follows.

Pensions Bill
Schedule 4 — Abolition of contracting-out for defined contribution pension schemes
Part 3 — Savings
63

      (2)
Omit sub-paragraphs (2) and (3) (sums owed on account of employer’s
minimum payments to a money purchase contracted-out scheme).
      (3)
In sub-paragraph (3A) (definition of “the appropriate amount”)—
(a)
in the opening words, omit “or (3)”;
(b)
in paragraph (a), omit “or (2) (as the case may be)”.
5
      (4)
In sub-paragraph (5) (interpretation)—
(a)
omit the definition of “appropriate flat-rate percentage”;
(b)
for the definition of “the percentage for contributing earners”
substitute—
““the percentage for contributing earners” means 3 per
10
cent;”;
(c)
for the definition of “the percentage for non-contributing earners”
substitute—
““the percentage for non-contributing earners” means
4.8 per cent.”
15
Part 3
Savings
Issue and cancellation etc. of certificates for periods before the abolition date
61
Nothing in the relevant amendments and repeals affects the continued
operation of any regulations in force under section 7(1) and (7) of the PSA
20
1993 (issue of certificates) immediately before the abolition date in relation
to the issue of a certificate having effect for a period before the abolition date.
62    (1)
Nothing in the relevant amendments and repeals affects the continued
operation of section 34 of the PSA 1993 (cancellation, variation, surrender
and refusal of certificates), or any regulations in force under it immediately
25
before the abolition date, for the purposes of a retrospective act.
      (2)
In sub-paragraph (1) “a retrospective act” means the cancellation, variation,
surrender or refusal of a certificate, or the issue of an amended certificate,
where—
(a)
the certificate was in force for a period beginning before the abolition
30
date (or, in the case of a refusal of a certificate, would have related to
such a period if it had been issued), and
(b)
the cancellation, variation, surrender, refusal or issue—
(i)
is made after the abolition date, but
(ii)
has effect from a date before that date.
35
      (3)
An amended certificate issued by virtue of this paragraph must provide for
it to cease to have effect as from the abolition date.
      (4)
In this paragraph and paragraph 61 “a certificate” means an appropriate
scheme certificate or a contracting-out certificate in respect of a money
purchase contracted-out scheme, and each of those terms has the meaning
40
given by section 181(1) of the PSA 1993.
63
Nothing in the relevant amendments and repeals affects the continued
operation of section 164(2) of the PSA 1993 (persons employed by or under
the Crown to be treated as employed earners for the purposes of certain

Pensions Bill
Schedule 5 — Removal of Secretary of State’s role in approving actuarial guidance
64

provisions) in relation to the provisions of that Act saved by paragraphs 61
and 62.
64
Nothing in the relevant amendments and repeals affects the continued
operation of section 177(3)(b)(ii) of the PSA 1993 (administrative expenses of
the Secretary of State, other than those arising out of certain provisions, to be
5
paid out of the National Insurance Fund into the Consolidated Fund) in
relation to the estimated administrative expenses of the Secretary of State in
carrying into effect the provisions of that Act saved by paragraphs 61 and 62.
Determination of question whether scheme was appropriate scheme
65
Nothing in the relevant amendments and repeals affects the continued
10
operation of any regulations in force under section 7(6) of the PSA 1993
(issue of certificates) immediately before the abolition date.
Preservation of earner’s chosen scheme
66    (1)
Nothing in the relevant amendments and repeals—
(a)
prevents the giving of a preceding tax year notice, or
15
(b)
otherwise affects the operation of section 44 of the PSA 1993 in
relation to such a notice.
      (2)
In sub-paragraph (1) a “preceding tax year notice” means a notice within
section 44(1) of the PSA 1993 which is given on or after the abolition date but
in which the date specified in accordance with that provision falls before the
20
abolition date.
Interpretation etc.
67    (1)
In this Part of this Schedule—
“the abolition date” has the same meaning as in section 15;
“the PSA 1993” means the Pension Schemes Act 1993 (c. 48);
25
“the relevant amendments and repeals” means—
(a)
the amendments and repeals made by Part 1 of this Schedule,
and
(b)
the consequential repeals in Part 5 of Schedule 7.
      (2)
Nothing in this Part of this Schedule is to be read as affecting the generality
30
of section 16 of the Interpretation Act 1978 (c. 30) (general savings).
Schedule 5
Section 17

Removal of Secretary of State’s role in approving actuarial guidance
Bankruptcy (Scotland) Act 1985 (c. 66)
1
In section 36C of the Bankruptcy (Scotland) Act 1985 (recovery of excessive
35
pensions contributions: supplementary) in subsection (5) (under which
calculation and verification of certain values and amounts may be required
to be in accordance with guidance approved by Secretary of State) for

Pensions Bill
Schedule 5 — Removal of Secretary of State’s role in approving actuarial guidance
65

paragraph (b) substitute—
“(b)
in accordance with guidance from time to time prepared by a
prescribed person.”
2
In section 36F of that Act (recovery orders: supplementary) in subsection (4)
(under which calculation and verification of certain values and amounts
5
may be required to be in accordance with guidance approved by Secretary
of State) for paragraph (b) substitute—
“(b)
in accordance with guidance from time to time prepared by a
prescribed person.”
Insolvency Act 1986 (c. 45)
10
3
In section 342C of the Insolvency Act 1986 (recovery of excessive pensions
contributions: supplementary) in subsection (5) (under which calculation
and verification of certain values and amounts may be required to be in
accordance with guidance approved by Secretary of State) for paragraph (b)
substitute—
15
“(b)
in accordance with guidance from time to time prepared by a
prescribed person.”
4
In section 342F of that Act (orders in relation to transactions at an
undervalue and preferences: supplementary) in subsection (7) (under which
calculation and verification of certain values and amounts may be required
20
to be in accordance with guidance approved by Secretary of State) for
paragraph (b) substitute—
“(b)
in accordance with guidance from time to time prepared by a
prescribed person.”
Pension Schemes Act 1993 (c. 48)
25
5
In section 12A of the Pension Schemes Act 1993 (statutory standard for
certification of occupational pension schemes) in subsection (5) (regulations
may provide for determination to be made in accordance with guidance
approved by Secretary of State) omit “and approved by the Secretary of
State”.
30
6
In section 113 of that Act (disclosure of information about schemes to
members etc.) in subsection (3A) (regulations may provide for information
that must be given to be determined by reference to guidance approved by
Secretary of State) for paragraphs (a) and (b) substitute “is prepared and
from time to time revised by a prescribed body”.
35
Pensions Act 1995 (c. 26)
7
In section 67D of the Pensions Act 1995 (actuarial equivalence requirements:
further provisions) in subsection (5) (requirements prescribed for
calculation of actuarial values may include that the calculation is to be made
in accordance with guidance approved by Secretary of State) for paragraphs
40
(a) and (b) substitute “is prepared and from time to time revised by a
prescribed body”.
8
In section 119 of that Act (regulations may provide for values to be
calculated in accordance with guidance approved by the Secretary of State)
for paragraphs (a) and (b) substitute “prepared and from time to time
45
revised by a prescribed body”.

Pensions Bill
Schedule 6 — The Personal Accounts Delivery Authority
Part 1 — Members and employees etc.
66

Pensions Act 2004 (c. 35)
9
In section 230 of the Pensions Act 2004 (matters on which advice of actuary
must be obtained) in subsection (3) (regulations may require actuary to have
regard to guidance) in the definition of “prescribed guidance” omit “and, if
the regulations so provide, is approved by the Secretary of State”.
5
Schedule 6
Section 32

The Personal Accounts Delivery Authority
Part 1
Members and employees etc.
Members
10
1     (1)
The following are to be the members of the Authority—
(a)
a chairman appointed by the Secretary of State,
(b)
other non-executive members appointed in accordance with sub-
paragraph (2) or (3), and
(c)
the executive members (see paragraph 6).
15
      (2)
The first non-executive members appointed for the purposes of sub-
paragraph (1)(b) are to be appointed by the Secretary of State.
      (3)
Any subsequent appointment for the purposes of sub-paragraph (1)(b) is to
be made by the Authority with the approval of the Secretary of State.
      (4)
Both the Secretary of State and the Authority must aim to ensure that the
20
Authority has neither less than 3 nor more than 9 members at any time.
Qualifications for non-executive members
2     (1)
Before appointing a person to be the chairman or another non-executive
member, the Secretary of State must satisfy himself that the person does not
have a conflict of interest.
25
      (2)
The Secretary of State must also satisfy himself from time to time that the
chairman and every other non-executive member does not have a conflict of
interest.
      (3)
Any of the persons mentioned in sub-paragraph (4) must, if so requested by
the Secretary of State, provide the Secretary of State with such information
30
as he considers necessary for the purpose of discharging his duties under
this paragraph.
      (4)
The persons are—
(a)
a person whom the Secretary of State proposes to appoint to be the
chairman or another non-executive member, and
35
(b)
the chairman and other non-executive members.
      (5)
Sub-paragraphs (1) to (4) apply in connection with the approval by the
Secretary of State of an appointment by the Authority as they apply in
connection with an appointment by him.

Pensions Bill
Schedule 6 — The Personal Accounts Delivery Authority
Part 1 — Members and employees etc.
67

      (6)
In this paragraph and paragraph 3 “conflict of interest”, in relation to a
person, means a financial or other interest which is likely to affect
prejudicially the discharge by him of his functions as a member of the
Authority.
      (7)
But for the purposes of this paragraph and paragraph 3 a person is not to be
5
taken to have a conflict of interest by reason only—
(a)
that he is or has previously been engaged, on behalf of the relevant
authority, in activities connected with the discharge of the
authority’s functions relating to occupational pension schemes or
personal pension schemes, or
10
(b)
that he has previously been a trustee or manager of such a scheme or
an employee of such a trustee or manager.
Tenure of office of non-executive members
3     (1)
The chairman and each other non-executive member holds and vacates
office in accordance with the terms of his appointment (subject to this
15
Schedule).
      (2)
A person’s appointment as the chairman or other non-executive member
must state the period for which the appointment is made.
      (3)
A person is eligible for re-appointment at the end of any such period.
      (4)
The chairman and each other non-executive member may resign by notice in
20
writing to the Secretary of State.
      (5)
If the Secretary of State is satisfied that the chairman or another non-
executive member—
(a)
has at any time had a bankruptcy order made against him or had his
estate sequestrated,
25
(b)
has at any time made a composition or arrangement with, or granted
a trust deed for, his creditors,
(c)
has a conflict of interest,
(d)
has been guilty of misbehaviour,
(e)
has failed to comply with the terms of his appointment,
30
(f)
has without reasonable excuse failed to discharge the functions of his
office, or
(g)
is otherwise incapable of discharging, or unfit or unwilling to
discharge, the functions of his office,

the Secretary of State may by notice in writing remove him from office.
35
Remuneration and pensions of non-executive members
4     (1)
The Authority may pay to the chairman and other non-executive
members—
(a)
such remuneration, and
(b)
such allowances,
40

as the Secretary of State may determine.
      (2)
The Authority may pay, or make provision for paying, to or in respect of the
chairman and other non-executive members such sums by way of, or in
respect of—
(a)
pensions,
45

Pensions Bill
Schedule 6 — The Personal Accounts Delivery Authority
Part 1 — Members and employees etc.
68

(b)
allowances, or
(c)
gratuities,

as the Secretary of State may determine.
      (3)
Where—
(a)
otherwise than on the expiry of his term of office, a person ceases to
5
be the chairman or another non-executive member, and
(b)
the Secretary of State thinks there are special circumstances that
make it right for the person to receive compensation,

the Authority may make a payment to the person of such amount as the
Secretary of State may determine.
10
      (4)
If a non-executive member—
(a)
is a participant in a pension scheme applicable to his membership of
the Authority, and
(b)
on ceasing to be a non-executive member, becomes an employee of
the Authority or both an employee and an executive member,
15

his service (after ceasing to be a non-executive member) as an employee or
executive member, may, if the Secretary of State so determines, be treated for
the purposes of the pension scheme as if it were service as a non-executive
member.
Deputy chairman
20
5     (1)
The Secretary of State may appoint a non-executive member to be the deputy
chairman.
      (2)
A person appointed to be the deputy chairman—
(a)
ceases to be the deputy chairman if he ceases to be a member of the
Authority, but
25
(b)
otherwise holds and vacates office in accordance with the terms of
his appointment.
      (3)
The deputy chairman is entitled to discharge the functions of the chairman
in such cases and in such manner as may be determined by or in accordance
with directions given by the chairman or the Secretary of State.
30
Executive members and other employees
6     (1)
The following are to be the executive members of the Authority—
(a)
the chief executive of the Authority, and
(b)
such other persons (if any) as are appointed in accordance with sub-
paragraph (4) or (5).
35
      (2)
The first chief executive is to be appointed by the Secretary of State, and until
he makes such an appointment the membership of the Authority is not
required by virtue of paragraph 1(1)(c) to include any executive member.
      (3)
Any subsequent chief executive is to be appointed by the chairman and
other non-executive members with the approval of the Secretary of State.
40
      (4)
The first executive members (if any) appointed for the purposes of sub-
paragraph (1)(b) are to be appointed by the Secretary of State.