Superannuation Bill

 

[AS AMENDED ON REPORT]

 
 

Contents

1   

Consents required for civil service compensation scheme modifications

2   

Consultation in relation to civil service compensation scheme modifications

3   

Limits on value of benefits provided under civil service compensation scheme

4   

Final provisions

 

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Superannuation Bill

1

 

A

Bill

[AS AMENDED ON REPORT]

To

Make provision for and in connection with limiting the value of the benefits

which may be provided under so much of any scheme under section 1 of the

Superannuation Act 1972 as provides by virtue of section 2(2) of that Act for

benefits to be provided by way of compensation to or in respect of persons

who suffer loss of office or employment; and to make provision about the

procedure for modifying such a scheme. 

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and

consent of the Lords Spiritual and Temporal, and Commons, in this present

Parliament assembled, and by the authority of the same, as follows:—

1       

Consents required for civil service compensation scheme modifications

(1)   

Section 2 of the Superannuation Act 1972 is amended as follows.

(2)   

In subsection (3), at the beginning insert “Subject to subsection (3A) below,”.

(3)   

After subsection (3) insert—

“(3A)   

Subsection (3) above does not apply to a provision which would have

5

the effect of reducing the amount of a compensation benefit except in

so far as the compensation benefit is one provided in respect of a loss of

office or employment which is the consequence of—

(a)   

a notice of dismissal given before the coming into operation of

the scheme which would have that effect, or

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(b)   

an agreement made before the coming into operation of that

scheme.

(3B)   

In this section—

“compensation benefit” means so much of any pension, allowance

or gratuity as is provided under the civil service compensation

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scheme by way of compensation to or in respect of a person by

reason only of the person’s having suffered loss of office or

employment;

 

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Superannuation Bill

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“the civil service compensation scheme” means so much of any

scheme under the said section 1 (whenever made) as provides

by virtue of subsection (2) above for benefits to be provided by

way of compensation to or in respect of persons who suffer loss

of office or employment.

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(3C)   

In subsection (3B) above a reference to suffering loss of office or

employment includes a reference to suffering loss or diminution of

emoluments as a consequence of suffering loss of office or

employment.”

(4)   

The amendments made by this section apply in relation to reductions to which

10

effect is given by a scheme made under section 1 of the 1972 Act after the

coming into force of this section.

(5)   

Subsection (6) applies if—

(a)   

a scheme under section 1 of the 1972 Act is made after this section

comes into force, and

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(b)   

consultation on the proposed scheme took place to any extent before

this section came into force.

(6)   

The fact that the amendments made by this section were not in force when that

consultation took place does not affect the question whether the consultation

satisfied the requirements of section 1(3) of the 1972 Act.

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2       

Consultation in relation to civil service compensation scheme modifications

(1)   

Section 2 of the Superannuation Act 1972 is amended as follows.

(2)   

After subsection (3C) insert—

“(3D)   

So far as it relates to a provision of a scheme under the said section 1

which would have the effect of reducing the amount of a compensation

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benefit, the duty to consult in section 1(3) of this Act is a duty to consult

with a view to reaching agreement with the persons consulted.”

(3)   

After subsection (11) insert—

“(11A)   

Subsection (11B) below applies if a scheme made under the said section

1 makes any provision which would have the effect of reducing the

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amount of a compensation benefit.

(11B)   

Before the scheme comes into operation, the Minister must have laid

before Parliament a report providing information about—

(a)   

the consultation that took place for the purposes of section 1(3)

of this Act, so far as relating to the provision,

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(b)   

the steps taken in connection with that consultation with a view

to reaching agreement in relation to the provision with the

persons consulted, and

(c)   

whether such agreement has been reached.”

(4)   

The amendments made by this section apply in relation to reductions to which

40

effect is given by a scheme made under section 1 of the 1972 Act after the

coming into force of this section.

 
 

Superannuation Bill

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3       

Limits on value of benefits provided under civil service compensation

scheme

(1)   

The civil service compensation scheme is to have effect subject to the following

limitations.

(2)   

The aggregate amount of compensation benefits provided to or in respect of a

5

person under the scheme is not to exceed—

(a)   

in the case of a compulsory severance, an amount equal to that person’s

pensionable earnings for 12 months;

(b)   

in the case of a voluntary severance, an amount equal to that person’s

pensionable earnings for 15 months.

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(3)   

For the purposes of this section, the amount of a compensation benefit is equal

to the cost of providing it; and that cost is to be determined in accordance with

guidance issued by the Minister, having regard to any advice given by the

scheme actuary.

(4)   

If—

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(a)   

the aggregate amount of compensation benefits provided to or in

respect of a person under the scheme would (apart from this section)

exceed the applicable limitation in subsection (2), and

(b)   

those benefits would (apart from this section) be provided otherwise

than in the form of a single lump sum payment,

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all the compensation benefits to be provided in that case are to be provided

(subject to the limitation in subsection (2)) in the form of a single lump sum

payment.

(5)   

The limitations in subsection (2) apply only in relation to—

(a)   

a compulsory severance which is the consequence of a notice of

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dismissal given after the time when this section comes into force;

(b)   

a voluntary severance which is the consequence of an agreement made

after that time.

(6)   

For the purposes of this section—

(a)   

“compulsory severance” means a loss of office or employment which is

30

the consequence of a notice of dismissal, and

(b)   

“voluntary severance” means any other loss of office or employment.

(7)   

In this section “pensionable earnings”, in relation to a person, means earnings

at the rate which, immediately before the compulsory or voluntary severance

in question, was the rate of earnings—

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(a)   

on which the person was required to pay periodical pension

contributions under a scheme under section 1 of the Superannuation

Act 1972, or

(b)   

on which the person would have been required to pay such

contributions if it were assumed that the person were then a member of

40

such a scheme who was required to pay such contributions.

(8)   

In determining for the purposes of subsection (7) the rate of earnings on which

the person was, or would have been, required to pay such contributions—

(a)   

any limit on that rate which applies to persons who became civil

servants or members of such a scheme on or after 1 June 1989 (or to any

45

such persons and others) is to be ignored;

(b)   

a person who, immediately before the compulsory or voluntary

severance in question, was unpaid or was being paid at a rate less than

 
 

Superannuation Bill

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the normal rate, is to be treated as if the person were then being paid at

the normal rate;

   

for this purpose “the normal rate” is the rate at which the person would

normally have been paid.

(9)   

In this section—

5

“civil service compensation scheme” means so much of any scheme made

under section 1 of the Superannuation Act 1972 (whether before or after

the coming into force of this section) as provides by virtue of section

2(2) of that Act for benefits to be provided by way of compensation to

or in respect of persons who suffer loss of office or employment;

10

“compensation benefit” means so much of any pension, allowance or

gratuity as is provided by way of compensation to or in respect of a

person by reason only of the person’s having suffered loss of office or

employment;

“scheme actuary” means the actuary appointed by the Minister to provide

15

a consulting service on a range of actuarial matters relating to civil

service pension and compensation arrangements.

(10)   

In subsection (9) a reference to suffering loss of office or employment includes

a reference to suffering loss or diminution of emoluments as a consequence of

suffering loss of office or employment, but does not include—

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(a)   

a loss of remuneration which a person would have received but for the

person’s having been dismissed—

(i)   

without notice, or

(ii)   

with notice that is shorter than the person would normally have

been given, or

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(b)   

a loss of remuneration which a person with a fixed term appointment

would have received but for the ending of that appointment before the

expiry of the fixed term.

(11)   

The Minister may by order provide for paragraph (a) or (b) of subsection (2) to

have effect as if for the number of months specified in that paragraph there

30

were substituted a greater number of months.

4       

Final provisions

(1)   

This Act may be cited as the Superannuation Act 2010.

(2)   

Subject to subsection (3), this Act comes into force on the day it is passed.

(3)   

Section 2 comes into force at the end of the period of 2 months beginning with

35

that day.

(4)   

Except so far as otherwise provided under this section, section 3 expires at the

end of the period of 12 months beginning with the day on which that section

comes into force.

(5)   

The Minister may by order—

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(a)   

repeal section 3;

(b)   

provide that that section—

(i)   

is not to expire at the time when it would otherwise expire

under subsection (4) or in accordance with the most recent

order under this subsection, but

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(ii)   

is to continue in force after that time for a period not exceeding

6 months;

(c)   

(subject to subsection (6)) at any time revive that section (following its

expiry or repeal) for a period not exceeding 6 months.

(6)   

An order under subsection (5)(c) may not be made after the end of the period

5

of 3 years beginning with the day on which this Act is passed.

(7)   

The expiry or repeal of section 3 does not affect the application of that section

in relation to compensation benefits provided to or in respect of a person in

connection with a loss of office or employment occurring before its expiry or

repeal.

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(8)   

An order made by the Minister under this Act—

(a)   

is to be made by statutory instrument;

(b)   

may include supplementary, incidental, transitional or saving

provision.

(9)   

A statutory instrument containing an order under section 3(11) or subsection

15

(5)(b) or (c) of this section may not be made unless a draft of the instrument has

been laid before and approved by a resolution of the House of Commons.

(10)   

Any other statutory instrument containing an order under this Act is subject to

annulment in pursuance of a resolution of the House of Commons.

(11)   

In this Act “the Minister” means the Minister for the Civil Service.

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