Schedule 5 [Pension compensation on divorce etc: England and Wales]:
Lord Tunnicliffe moved Amendments Nos. 130DT to 130DZ:
Schedule 5, page 78, line 2, after first “compensation” insert “that derive from rights under a specified pension scheme are to”
Schedule 5, page 78, line 10, at end insert—
“(c) “specified” means specified in the order.”
Schedule 5, page 78, line 39, leave out from beginning to “the” and insert “are”
Schedule 5, page 79, leave out lines 1 to 7 and insert—
“( ) For the purposes of subsection (3)(a), rights to PPF compensation “are the subject of pension attachment” if any of the following three conditions is met.
( ) The first condition is that—
(a) the rights derive from rights under a pension scheme in relation to which an order was made under section 23 imposing a requirement by virtue of section 25B(4), and(b) that order, as modified under section 25E(3), remains in force.
( ) The second condition is that—
(a) the rights derive from rights under a pension scheme in relation to which an order was made under section 23 imposing a requirement by virtue of section 25B(7), and(b) that order—(i) has been complied with, or(ii) has not been complied with and, as modified under section 25E(5), remains in force.
( ) The third condition is that—
(a) the rights derive from rights under a pension scheme in relation to which an order was made under section 23 imposing a requirement by virtue of section 25C, and(b) that order remains in force.”
Schedule 5, page 84, line 2, after first “compensation” insert “that derive from rights under a specified pension scheme are to”
Schedule 5, page 84, line 8, at end insert—
“(3) In sub-paragraph (1) “specified” means specified in the order.”
Schedule 5, page 84, line 19, leave out from beginning to “the” and insert “are”
On Question, amendments agreed to.
Lord McKenzie of Luton moved Amendment No. 130E:
Schedule 5, page 84 leave out lines 26 to 32 and insert—
“( ) For the purposes of sub-paragraph (1)(a), rights to PPF compensation “are the subject of pension attachment” if any of the following three conditions is met.
( ) The first condition is that—
(a) the rights derive from rights under a pension scheme in relation to which an order was made under Part 1 imposing a requirement by virtue of paragraph 25(2), and(b) that order, as modified under paragraph 31, remains in force.
( ) The second condition is that—
(a) the rights derive from rights under a pension scheme in relation to which an order was made under Part 1 imposing a requirement by virtue of paragraph 25(5), and(b) that order—
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(i) has been complied with, or(ii) has not been complied with and, as modified under paragraph 32, remains in force.
( ) The third condition is that—
(a) the rights derive from rights under a pension scheme in relation to which an order was made under Part 1 imposing a requirement by virtue of paragraph 26, and(b) that order remains in force.”
On Question, amendment agreed to.
Schedule 5, as amended, agreed to.
8.45 pm
Schedule 6 [Pension compensation on divorce etc: Scotland]:
Lord McKenzie of Luton moved Amendments Nos. 130EA to 130EG:
Schedule 6, page 89, line 38, leave out from “which” to “subject” in line 40 and insert “is”
Schedule 6, page 90, line 9, leave out “or have been”
Schedule 6, page 90, line 25, leave out “93(2)” and insert “(Activation of pension compensation sharing: supplementary (Scotland))(1)”
Schedule 6, page 91, line 31, leave out from “which” to “subject” in line 33 and insert “is”
Schedule 6, page 91, line 45, leave out “or have been”
Schedule 6, page 92, line 25, after “compensation” insert “that derive from rights under a specified compensation scheme (that is, specified in the order) are to”
Schedule 6, page 92, line 28, after “value” insert “or amount”
On Question, amendments agreed to.
Schedule 6, as amended, agreed to.
Clause 104 [Consequential amendment]:
Lord McKenzie of Luton moved Amendment No. 130EH:
Clause 104, page 50, line 9, leave out from beginning to “after” in line 10 and insert—
“( ) The Pensions Act 2004 (c. 35) is amended as follows.
( ) In section 173 (Pension Protection Fund)—
(a) in subsection (3)(b)”
On Question, amendment agreed to.
Lord McKenzie of Luton moved Amendments Nos. 130EJ and 130EK:
Clause 104, page 50, line 11, at end insert—
“(b) in subsection (5) omit “of this Act”.”
Clause 104, page 50, line 11, at end insert—
“( ) After paragraph 18(2)(d) of Schedule 5 (Board of the Pension Protection Fund) insert—
“(da) section 168A (charges in respect of pension sharing etc);”.
( ) After paragraph 18(2)(g) of that Schedule insert—
“(ga) section 99 of, and Schedule 4 to, the Pensions Act 2008 (discharge of liability in respect of pension compensation credit);(gb) section 100 of that Act (charges in respect of pension compensation sharing costs);(gc) section 101 of that Act (supply of information about pension compensation in relation to divorce etc);
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(gd) section 102 of that Act (supply of information about pension compensation sharing);”
( ) In paragraph 18(2)(h) of that Schedule—
(a) after “section 111” insert “of this Act”;(b) for “(g)” substitute “(gd)”.”
On Question, amendments agreed to.
Clause 104, as amended, agreed to.
Lord McKenzie of Luton moved Amendment No. 130EL:
Transpose Clause 104 to after Clause 105
On Question, amendment agreed to.
Lord McKenzie of Luton moved Amendment No. 130EM:
Before Clause 105, insert the following new Clause—
“Charges in respect of pension sharing etc
After section 168 of the Pensions Act 2004 (c. 35) (administration of compensation) insert—
“Charges in respect of pension sharing etc
168A Charges in respect of pension sharing etc
(1) Regulations may make provision for the purpose of enabling the Board to recover prescribed charges in respect of complying with a relevant order or provision.
(2) In subsection (1) “a relevant order or provision” means any of the following—
(a) an order under section 23 of the Matrimonial Causes Act 1973 (financial provision in connection with divorce etc: England and Wales) so far as the order—(i) includes provision made by virtue of section 25B or 25C of that Act (powers to include provision about pensions), and(ii) applies in relation to the Board by virtue of section 25E of that Act;(b) an order under section 23 of that Act so far as the order includes provision made by virtue of section 25F of that Act (attachment of pension compensation on divorce etc: England and Wales);(c) an order under Part 1 of Schedule 5 to the Civil Partnership Act 2004 (financial provision orders in connection with dissolution of civil partnerships etc: England and Wales) so far as the order—(i) includes provision made by virtue of Part 6 of that Schedule (powers to include provision about pensions), and(ii) applies in relation to the Board by virtue of Part 7 of that Schedule;(d) an order under Part 1 of that Schedule so far as the order includes provision made by virtue of paragraph 34A of that Schedule (attachment of pension compensation on dissolution of civil partnership etc: England and Wales);(e) an order made under any provision corresponding to a provision mentioned in paragraphs (a) to (d) in force in Northern Ireland;(f) an order under section 8(1)(baa) to (bb) of the Family Law (Scotland) Act 1985 (orders for financial provision) so far as the order applies in relation to the Board;(g) any provision corresponding to provision which may be made by such an order and which is contained in a qualifying agreement (to which section 28(3) of the Welfare Reform and Pensions Act 1999, or section (Activation of pension compensation sharing: supplementary (Scotland))(1) of the Pensions Act 2008 relates) so far as the agreement applies in relation to the Board;
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(h) an order or provision of a kind mentioned in section 28(1) of the Welfare Reform and Pensions Act 1999 (pension sharing) so far as the order or provision applies in relation to the Board by virtue of section 220 of this Act.
(3) Regulations under subsection (1) may include provision enabling the Board to set off against any PPF compensation payable to a person any charges owed to it by that person under the regulations.
(4) In this section “PPF compensation” means compensation payable—
(a) under or by virtue of this Chapter, or(b) under or by virtue of Chapter 1 of Part 3 of the Pensions Act 2008 (pension compensation on divorce etc).””
On Question, amendment agreed to.
Clause 105 agreed to.
Schedule 7 [Amendments of Schedule 7 to the Pensions Act 2004]:
Lord McKenzie of Luton moved Amendment No. 130EN:
Schedule 7, page 93, line 6, at end insert—
“ In paragraph 11(8) after “paragraph 24 (commutation),” insert—
“paragraph 25E (terminal illness lump sum),”.
In paragraph 13, after sub-paragraph (3) insert—
“(3A) For the purposes of this paragraph, a person’s entitlement under paragraph 11 is to be determined disregarding paragraph 25E(1)(b) (successful applicant for terminal illness lump sum loses entitlement to periodic compensation).”
In paragraph 14(9) after “paragraph 20 (compensation in respect of scheme right to transfer payment or contribution refund),” insert—
“paragraph 25E (terminal illness lump sum),”.
In paragraph 15(6) after “paragraph 24 (commutation),” insert—
“paragraph 25E (terminal illness lump sum),”.
In paragraph 18, after sub-paragraph (3) insert—
“(3A) For the purposes of this paragraph, a person’s entitlement under paragraph 15 is to be determined disregarding paragraph 25E(1)(b) (successful applicant for terminal illness lump sum loses entitlement to periodic compensation).”
In paragraph 19(8) after “This paragraph is subject to—” insert—
“paragraph 25E (terminal illness lump sum),”.”
On Question, amendment agreed to.
Lord McKenzie of Luton moved Amendment No. 130EP:
Schedule 7, page 94, line 12, at end insert—
“ After paragraph 25A (inserted by paragraph 7 above) insert—
“Terminal illness lump sum: eligibility
25B (1) This paragraph applies to a person in relation to whom all of the following conditions are met—
(a) the person is terminally ill;(b) if the person lived to the relevant age, the person would become entitled on attaining that age to relevant compensation in relation to the scheme;(c) the person has not yet become entitled to any compensation under the pension compensation provisions in relation to the scheme;(d) the whole or any part of the person’s lifetime allowance is available.
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(2) A person to whom this paragraph applies may make an application to the Board to commute the future entitlement mentioned in sub-paragraph (1)(b) for a lump sum (“a terminal illness lump sum”) payable on the granting of the application.
(3) For the purposes of this Chapter a person is “terminally ill” at any time if at that time the person suffers from a progressive disease and the person’s death in consequence of that disease can reasonably be expected within 6 months.
(4) In this paragraph—
“lifetime allowance”, in relation to a person, has the same meaning as in Part 4 of the Finance Act 2004 (c. 12) (pension schemes etc) (see section 218 of that Act);
“relevant age”, in relation to a person, means—
(a) in relation to compensation entitlement to which has been accelerated or deferred under regulations under paragraph 25 or (as the case may be) 25A, the age at which the person becomes entitled to the compensation in accordance with the regulations;(b) in relation to compensation entitlement to which has not been so accelerated or deferred, normal pension age (or, in a case to which paragraph 21 applies, normal benefit age).
“relevant compensation” means—
(a) periodic compensation under paragraph 11 or 15, or(b) lump sum compensation under paragraph 14 or 19;Terminal illness lump sum: application
25C An application for a terminal illness lump sum—
(a) must be made in writing, either on a form approved by the Board for the purposes of this paragraph or in such other manner as the Board may accept as sufficient in the circumstances of the case;(b) must be accompanied by such information as the Board may require for the purpose of determining the application.Terminal illness lump sum: determination of application
25D (1) The Board must determine an application for a terminal illness lump sum in accordance with this paragraph.
(2) The Board must—
(a) if satisfied that the conditions in paragraph 25B(1) are met in relation to the applicant, grant the application;(b) in any other case (subject to sub-paragraph (3)), reject the application.
(3) The Board may hold over the application for determination at a later date if it is satisfied that—
(a) although the condition in paragraph 25B(1)(a) is not met in relation to the applicant, the applicant suffers from a progressive disease and may become terminally ill within six months, and(b) the conditions in paragraph 25B(1)(b) to (d) are met in relation to the applicant.Terminal illness lump sum: effect of successful application
25E (1) If the Board grants an application for a terminal illness lump sum, the applicant—
(a) becomes entitled to a terminal illness lump sum calculated in accordance with this paragraph, and(b) loses the entitlement the applicant otherwise would have had on attaining the relevant age to relevant compensation in relation to the scheme.
(2) The amount of the terminal illness lump sum is 2 times the sum of—
(a) the periodic compensation annual amount, and(b) the lump sum compensation annual amount.
(3) In sub-paragraph (2) “the periodic compensation annual amount” means the annual amount to which the applicant would have been entitled under paragraph 11 or 15 in relation to the
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scheme in the year following the granting of the application, if the applicant had attained the relevant age on the granting of the application.
(4) In sub-paragraph (2) “the lump sum compensation annual amount” means the annualised value of the lump sum to which the applicant would have been entitled under paragraph 14 or 19 in relation to the scheme on the granting of the application, if the applicant had attained the relevant age on the granting of the application.
(5) In sub-paragraph (4) “the annualised value” of a lump sum means the annualised actuarially equivalent amount of that sum, determined in accordance with actuarial factors published by the Board.
(6) In this paragraph “relevant compensation” and “the relevant age” have the same meanings as in paragraph 25B.
Terminal illness lump sum: information
25F (1) Relevant information held by the Secretary of State about an individual may be disclosed to the Board for use for a purpose relating to—
(a) the Board’s functions under paragraphs 25B to 25E;(b) the compliance of the trustees or managers of a pension scheme with section 138 (limit on amount of scheme benefits payable during an assessment period).
(2) In sub-paragraph (1) “relevant information” means information held for the purposes of any function of the Secretary of State relating to—
(a) social security, or(b) any scheme made under section 286 (financial assistance scheme).”
On Question, amendment agreed to.
Schedule 7, as amended, agreed to.
Clause 106 [Financial assistance scheme]:
Lord McKenzie of Luton moved Amendment No. 130EQ:
Clause 106, page 50, line 25, after “scheme”” insert “, in paragraph (b), after “began” insert “, subject to any prescribed exception,”.
(3A) In that definition,”
The noble Lord said: I shall speak also to government Amendments Nos. 130ER to 130ET, and 141A, 141B and 142C, as well as to Amendment No. 130EU, tabled by the noble Lord, Lord Skelmersdale. The first set of amendments seeks to bring schemes which currently fall outside the financial assistance scheme and Pension Protection Fund into the financial assistance scheme. As Members of the Committee may recall, the financial assistance scheme assists schemes that commenced winding-up between 1 January 1997 and 5 April 2005. Entry conditions for the Pension Protection Fund require the employer to have experienced an insolvency event on or after 6 April 2005 at the PPF’s start date.
A small number of schemes have been caught between the FAS and the PPF because the employer went insolvent before the PPF’s start date, but the pension scheme delayed winding up until after that date. Government Amendments Nos. 130EQ, 130ES and 141A will enable us to bring forward regulations to allow these schemes into the FAS by making exceptions to the current requirement that pension schemes must have started to wind up before 6 April 2005 to qualify for the FAS. Members of these schemes are in a similar position to those already helped by the FAS, and through no fault of their own. We therefore
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intend to bring these schemes into the FAS. In order to bring schemes such as Desmond and Sons into the FAS as quickly as possible, these amendments ensure that the regulation-making power will commence on Royal Assent, and the regulations are subject to the negative procedure. I should like to thank the noble Lord, Lord Skelmersdale, for his amendment, which also seeks to achieve this end. I hope that he is content with our amendments, which will indeed help those schemes caught between the FAS and the PPF and so will feel able to withdraw his amendment.
