Legalize / United Kingdom / Public General Act

Pensions Act 1995

Type Public General Act

Publication 1995-07-19

Last updated 2024-04-06

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(b) a “cessation notice” in the case of a relevant event within subsection (6A)(b), means a withdrawal notice issued under section 130(3) of the 2004 Act (scheme rescue has occurred),

(d) the occurrence of a cessation event in relation to a scheme in respect of a cessation notice issued during a particular period (“the specified period”) is a possibility until each of the following are no longer reviewable—

(i) any cessation notice which has been issued in relation to the scheme during the specified period,

(ii) any failure to issue such a cessation notice during the specified period,

(iii) any notice which has been issued by the Board under Chapter 2 or 3 of Part 2 of the 2004 Act which is relevant to the issue of a cessation notice in relation to the scheme during the specified period or to such a cessation notice which has been issued during that period becoming binding,

(iv) any failure to issue such a notice as is mentioned in sub-paragraph (iii),

(e) the issue or failure to issue a notice is to be regarded as reviewable—

(i) during the period within which it may be reviewed by virtue of Chapter 6 of Part 2 of the 2004 Act, and

(ii) if the matter is so reviewed, until—

(a) the review and any reconsideration,

(b) any reference to the Ombudsman for the Board of the Pension Protection Fund in respect of the matter, and

has been finally disposed of, and

(f) a “scheme failure notice” means a scheme failure notice issued under section 122(2)(a) or 130(2) of the 2004 Act (scheme rescue not possible).

(6C) For the purposes of this section—

(a) section 121 of the 2004 Act applies for the purposes of determining if and when an insolvency event has occurred in relation to the employer,

(b) “appointed day” means the day appointed under section 126(2) of the 2004 Act (no pension protection under Chapter 3 of Part 2 of that Act if the scheme begins winding up before the day appointed by the Secretary of State),

(c) references to a relevant event in relation to an employer do not include a relevant event which occurred in relation to him before he became the employer in relation to the scheme,

(d) references to a cessation notice becoming binding are to the notice in question mentioned in subsection (6B)(a) or (b) and issued under Part 2 of the 2004 Act becoming binding within the meaning given by that Part of that Act, and

(e) references to a scheme failure notice becoming binding are to the notice in question mentioned in subsection (6B)(f) and issued under Part 2 of the 2004 Act becoming binding within the meaning given by that Part of that Act.

(6D) Where—

(a) a resolution is passed for a voluntary winding up of the employer in a case where a declaration of solvency has been made under section 89 of the Insolvency Act 1986 (members' voluntary winding up), and

(b) the voluntary winding up of the employer—

(i) is stayed other than in prescribed circumstances, or

(ii) becomes a creditors’ voluntary winding up under section 96 of that Act (conversion to creditors’ voluntary winding up),

this section has effect as if that resolution had never been passed and any debt which arose under this section by virtue of the passing of that resolution shall be treated as if it had never arisen.

(7) This section does not prejudice any other right or remedy which the trustees or managers may have in respect of a deficiency in the scheme’s assets.

(8) A debt due by virtue only of this section shall not be regarded—

(a) as a preferential debt for the purposes of the Insolvency Act 1986, or

(b) as a preferred debt for the purposes of the Bankruptcy (Scotland) Act 2016.

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) Regulations may modify this section as it applies in prescribed circumstances.

Deficiencies in the assets: multi-employer schemes

75A

(1) Regulations may modify section 75 (deficiencies in the assets) as it applies in relation to multi-employer schemes.

(2) The regulations may in particular provide for the circumstances in which a debt is to be treated as due under section 75 from an employer in relation to a multi-employer scheme (a “multi-employer debt”).

(3) Those circumstances may include circumstances other than those in which the scheme is being wound up or a relevant event occurs (within the meaning of section 75).

(4) For the purposes of regulations under this section, regulations under section 75(5) may prescribe alternative manners for determining, calculating and verifying—

(a) the liabilities and assets of the scheme to be taken into account, and

(b) their amount or value.

(5) The regulations under this section may in particular—

(a) provide for the application of each of the prescribed alternative manners under section 75(5) to depend upon whether prescribed requirements are met;

(b) provide that, where in a particular case a prescribed alternative manner under section 75(5) is applied, the Authority may in prescribed circumstances issue a direction—

(i) that any resulting multi-employer debt is to be unenforceable for such a period as the Authority may specify, and

(ii) that the amount of the debt is to be re-calculated applying a different prescribed manner under section 75(5) if prescribed requirements are met within that period.

(6) The prescribed requirements mentioned in subsection (5) may include a requirement that a prescribed arrangement, the details of which are approved in a notice issued by the Authority, is in place.

(7) The regulations may provide that the Authority may not approve the details of such an arrangement unless prescribed conditions are met.

(8) Those prescribed conditions may include a requirement that—

(a) the arrangement identifies one or more persons to whom the Authority may issue a contribution notice under the regulations, and

(b) the Authority are satisfied of prescribed matters in respect of each of those persons.

(9) For the purposes of subsection (8) a “contribution notice” is a notice stating that the person to whom it is issued is under a liability to pay the sum specified in the notice—

(a) to the trustees of the multi-employer scheme in question, or

(b) where the Board of the Pension Protection Fund has assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Pensions Act 2004 (pension protection), to the Board.

(10) The regulations may provide for the Authority to have power to issue a contribution notice to a person identified in an arrangement as mentioned in subsection (8) if—

(a) the arrangement ceases to be in place or the Authority consider that the arrangement is no longer appropriate, and

(b) the Authority are of the opinion that it is reasonable to impose liability on the person to pay the sum specified in the notice.

(11) Where a contribution notice is issued to a person under the regulations as mentioned in subsection (8), the sum specified in the notice is to be treated as a debt due from that person to the person to whom it is to be paid as specified in the notice.

(12) Where the regulations provide for the issuing of a contribution notice by the Authority as mentioned in subsection (8)—

(a) the regulations must—

(i) provide for how the sum specified by the Authority in a contribution notice is to be determined,

(ii) provide for the circumstances (if any) in which a person to whom a contribution notice is issued is jointly and severally liable for the debt,

(iii) provide for the matters which the notice must contain, and

(iv) provide for who may exercise the powers to recover the debt due by virtue of the contribution notice, and

(b) the regulations may apply with or without modifications some or all of the provisions of sections 47 to 51 of the Pensions Act 2004 (contribution notices where non-compliance with financial support direction) in relation to contribution notices issued under the regulations.

(13) In this section “multi-employer scheme” means a trust scheme which applies to earners in employments under different employers.

(14) This section is without prejudice to the powers conferred by—

section 75(5) (power to prescribe the manner of determining, calculating and verifying assets and liabilities etc),

section 75(10) (power to modify section 75 as it applies in prescribed circumstances),

section 118(1)(a) (power to modify any provisions of this Part in their application to multi-employer trust schemes), and

section 125(3) (power to extend for the purposes of this Part the meaning of “employer”).

Excess assets on winding up.

76

(1) This section applies to a trust scheme in any circumstances if—

(a) it is a registered pension scheme under section 153 of the Finance Act 2004,

(b) the scheme is being wound up, and

(c) in those circumstances power is conferred on the employer or the trustees to distribute assets to the employer on a winding up.

(2) The power referred to in subsection (1)(c) cannot be exercised unless the requirements of subsections (3) and (in prescribed circumstances) (4), and any prescribed requirements, are satisfied.

(3) The requirements of this subsection are that—

(a) the liabilities of the scheme have been fully discharged,

(b) where there is any power under the scheme, after the discharge of those liabilities, to distribute assets to any person other than the employer, the power has been exercised or a decision has been made not to exercise it,

(d) notice has been given in accordance with prescribed requirements to the members of the scheme of the proposal to exercise the power.

(4) The requirements of this subsection are that the Authority are of the opinion that—

(a) any requirements prescribed by virtue of subsection (2) are satisfied, and

(b) the requirements of subsection (3) are satisfied.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) If, where this section applies to any trust scheme, the trustees purport to exercise the power referred to in subsection (1)(c) without complying with the requirements of this section, section 10 applies to any of them who have failed to take all such steps as are reasonable to secure compliance.

(7) If, where this section applies to any trust scheme, any person other than the trustees purports to exercise the power referred to in subsection (1)(c) without complying with the requirements of this section, section 10 applies to him.

(8) Regulations may provide that, in prescribed circumstances, this section does not apply to schemes falling within a prescribed class or description, or applies to them with prescribed modifications.

Excess assets remaining after winding up: power to distribute.

77

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The Pensions Compensation Board

The Compensation Board.

78

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Reports to Secretary of State.

79

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Review of decisions.

80

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The compensation provisions

Cases where compensation provisions apply.

81

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Applications for payments.

82

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Amount of compensation.

83

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Payments made in anticipation.

84

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Surplus funds.

85

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Modification of compensation provisions.

86

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Money purchase schemes

Schedules of payments to money purchase schemes.

87

(1) This section applies to an occupational pension scheme which is a money purchase scheme, other than one falling within a prescribed class or description.

(1A) Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 1 of the Pension Schemes Act 2021 (see section 1(2)(b) of that Act) is to be treated for the purposes of this section and section 88 as an occupational pension scheme which is a money purchase scheme.

(2) The trustees or managers of every occupational pension scheme to which this section applies must secure that there is prepared, maintained and from time to time revised a schedule (referred to in this section and section 88 as a “payment schedule”) showing—

(a) the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme,

(b) such other amounts payable towards the scheme as may be prescribed, and

(c) the dates on or before which payments of such contributions or other amounts are to be made (referred to in those sections as “due dates”).

(3) The payment schedule for a scheme must satisfy prescribed requirements.

(4) The matters shown in the payment schedule for a scheme—

(a) to the extent that the scheme makes provision for their determination, must be so determined, and

(b) otherwise,

(i) must be matters previously agreed between the employer and the trustees or managers of the scheme, or

(ii) if no such agreement has been made as to all matters shown in the schedule (other than those for whose determination the scheme makes provision), must be matters determined by the trustees or managers of the scheme.

(5) Where in the case of a scheme this section is not complied with—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) section 10 applies to any trustee or manager who has failed to take all such steps.

Schedules of payments to money purchase schemes: supplementary.

88

(1) Where, in the case of an occupational pension scheme to which section 87 applies—

(a) there is a failure to pay on or before the due date any amounts payable in accordance with the payment schedule, and

(b) the trustees or managers have reasonable cause to believe that the failure is likely to be of material significance in the exercise by the Authority of any of their functions,

they must, except in prescribed circumstances, give notice of the failure to the Authority and to the members of the scheme within a reasonable period after the due date.

(2) Any such amounts which for the time being remain unpaid after that date (whether payable by the employer or not) shall, if not a debt due from the employer to the trustees or managers apart from this subsection, be treated as such a debt.

(3) Where any amounts payable in accordance with the payment schedule by or on behalf of the employer on the employer’s own account have not been paid on or before the due date, section 10 applies to the employer.

(4) If, in the case of an occupational pension scheme to which section 87 applies, subsection (1) is not complied with—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) section 10 applies to any trustee or manager who has failed to take all such steps.

Application of further provisions to money purchase schemes.

89

(1) In the case of money purchase schemes falling within a prescribed class or description, regulations may—

(a) provide for any of the provisions of Part 3 of the Pensions Act 2004 to apply, or apply with prescribed modifications (in spite of anything in that Part), and

(b) provide for any of the provisions of sections 87 and 88 to apply with prescribed modifications or not to apply,

to such extent as may be prescribed.

(2) Regulations may provide for any of the provisions of section 75 to apply, or apply with prescribed modifications, to money purchase schemes to such extent as may be prescribed (in spite of anything in that section), and the power conferred by this subsection includes power to apply section 75 in circumstances other than those in which the scheme is being wound up or a relevant ... event occurs (within the meaning of that section).

(3) Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 1 of the Pension Schemes Act 2021 (see section 1(2)(b) of that Act) is to be treated for the purposes of this section as a separate money purchase scheme.

Unpaid contributions in cases of insolvency.

90

In section 124 of the Pension Schemes Act 1993 (duty of Secretary of State to pay unpaid contributions to schemes), after subsection (3) there is inserted—

(3A) Where the scheme in question is a money purchase scheme, the sum payable under this section by virtue of subsection (3) shall be the lesser of the amounts mentioned in paragraphs (a) and (c) of that subsection

, and, accordingly, at the beginning of subsection (3) there is inserted “Subject to subsection (3A),”.

Assignment, forfeiture, bankruptcy etc.

Inalienability of occupational pension.

91

(1) Subject to subsection (5), where a person is entitled to a pension under an occupational pension scheme or has a right to a future pension under such a scheme—

(a) the entitlement or right cannot be assigned, commuted or surrendered,

(b) the entitlement or right cannot be charged or a lien exercised in respect of it, and

and an agreement to effect any of those things is unenforceable.

(2) Where by virtue of this section a person’s entitlement to a pension under an occupational pension scheme, or right to a future pension under such a scheme, cannot, apart from subsection (5), be assigned, no order can be made by any court the effect of which would be that he would be restrained from receiving that pension.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Subsection (2) does not prevent the making of—

(a) an attachment of earnings order under the Attachment of Earnings Act 1971, or

(b) an income payments order under the Insolvency Act 1986.

(5) In the case of a person (“the person in question”) who is entitled to a pension under an occupational pension scheme, or has a right to a future pension under such a scheme, subsection (1) does not apply to any of the following, or any agreement to effect any of the following—

(a) an assignment in favour of the person in question’s widow, widower, surviving civil partner or dependant,

(b) a surrender, at the option of the person in question, for the purpose of—

(i) providing benefits for that person’s widow, widower, surviving civil partner or dependant, or

(ii) acquiring for the person in question entitlement to further benefits under the scheme,

(i) of the person in question’s benefit on or after retirement or in exceptional circumstances of serious ill health,

(ii) in prescribed circumstances, of any benefit for that person’s widow, widower, surviving civil partner or dependant, or

(iii) in other prescribed circumstances,

(d) subject to subsection (6), a charge or lien on, or set-off against, the person in question’s entitlement, or right, (except to the extent that it includes transfer credits other than prescribed transfer credits) for the purpose of enabling the employer to obtain the discharge by him of some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or omission by him,

(e) subject to subsection (6), except in prescribed circumstances a charge or lien on, or set-off against, the person in question’s entitlement, or right, for the purpose of discharging some monetary obligation due from the person in question to the scheme and—

(i) arising out of a criminal, negligent or fraudulent act or omission by him, or

(ii) in the case of a trust scheme of which the person in question is a trustee, arising out of a breach of trust by him,

(f) subject to subsection (6), a charge or lien on, or set-off against, the person in question’s entitlement, or right, for the purpose of discharging some monetary obligation due from the person in question to the scheme arising out of a payment made in error in respect of the pension.

(6) Where a charge, lien or set-off is exercisable by virtue of subsection (5)(d) , (e) or (f) —

(a) its amount must not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person in question’s entitlement or accrued right, and

(b) the person in question must be given a certificate showing the amount of the charge, lien or set-off and its effect on his benefits under the scheme,

and where there is a dispute as to its amount, the charge, lien or set-off must not be exercised unless the obligation in question has become enforceable under an order of a competent court or in consequence of an award of an arbitrator or, in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.

(7) This section is subject to section 159 of the Pension Schemes Act 1993 (inalienability of guaranteed minimum pension ... ).

Forfeiture, etc.

92

(1) Subject to the provisions of this section and section 93, an entitlement to a pension under an occupational pension scheme or a right to a future pension under such a scheme cannot be forfeited.

(2) Subsection (1) does not prevent forfeiture by reference to—

(a) a transaction or purported transaction which under section 91 is of no effect, ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

whether or not that event occurred before or after the pension became payable.

(3) Where such forfeiture as is mentioned in subsection (2) occurs, any pension which was, or would but for the forfeiture have become, payable may, if the trustees or managers of the scheme so determine, be paid to all or any of the following—

(a) the member of the scheme to or in respect of whom the pension was, or would have become, payable,

(b) the spouse, civil partner, widow, widower or surviving civil partner of the member,

(d) any other person falling within a prescribed class.

(4) Subsection (1) does not prevent forfeiture by reference to the pensioner, or prospective pensioner, having been convicted of one or more offences—

(a) which are committed before the pension becomes payable, and

(b) which are—

(i) offences of treason,

(ii) offences under the Official Secrets Acts 1911 to 1989 for which the person has been sentenced on the same occasion to a term of imprisonment of, or to two or more consecutive terms amounting in the aggregate to, at least 10 years, ...

(iia) offences under section 18 of, or listed in section 33(3)(a) of, the National Security Act 2023 for which the person has been sentenced on the same occasion to a term of imprisonment of, or to two or more consecutive terms amounting in the aggregate to, at least 10 years, or

(iii) prescribed offences.

(5) Subsection (1) does not prevent forfeiture by reference to a failure by any person to make a claim for pension—

(a) where the forfeiture is in reliance on any enactment relating to the limitation of actions, or

(b) where the claim is not made within six years of the date on which the pension becomes due.

(6) Subsection (1) does not prevent forfeiture in prescribed circumstances.

(7) In this section and section 93, references to forfeiture include any manner of deprivation or suspension.

Forfeiture by reference to obligation to employer.

93

(1) Subject to subsection (2), section 92(1) does not prevent forfeiture of a person’s entitlement to a pension under an occupational pension scheme or right to a future pension under such a scheme by reference to the person having incurred some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or omission by the person.

(2) A person’s entitlement or right may be forfeited by reason of subsection (1) to the extent only that it does not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person’s entitlement or right.

(3) Such forfeiture as is mentioned in subsection (1) must not take effect where there is a dispute as to the amount of the monetary obligation in question, unless the obligation has become enforceable under an order of a competent court or in consequence of an award of an arbitrator or, in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.

(4) Where a person’s entitlement or right is forfeited by reason of subsection (1), the person must be given a certificate showing the amount forfeited and the effect of the forfeiture on his benefits under the scheme.

(5) Where such forfeiture as is mentioned in subsection (1) occurs, an amount not exceeding the amount forfeited may, if the trustees or managers of the scheme so determine, be paid to the employer.

Sections 91 to 93: supplementary.

94

(1) Regulations may—

(a) modify sections 91 to 93 in their application to public service pension schemes or to other schemes falling within a prescribed class or description, or

(b) provide that those sections do not apply in relation to schemes falling within a prescribed class or description.

(2) In those sections, “pension” in relation to an occupational pension scheme, includes any benefit under the scheme and any part of a pension and any payment by way of pension.

(3) In the application of sections 91 and 92 to Scotland—

(a) references to a charge are to be read as references to a right in security or a diligence and “charged” is to be interpreted accordingly,

(b) references to assignment are to be read as references to assignation and “assign” is to be interpreted accordingly,

(d) the reference to an income payments order under the Insolvency Act 1986 is to be read as a reference to an order under section 90 or 95 of the Bankruptcy (Scotland) Act 2016, ...

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f) after subsection 91(4) there is inserted—

Subject to section 73(3)(d) of the Debtors (Scotland) Act 1987, nothing in this section prevents any diligence mentioned in section 46 of that Act being done against a pension under an occupational pension scheme.

Pension rights of individuals adjudged bankrupt etc.

95

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Questioning the decisions of the Authority

Review of decisions.

96

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References and appeals from the Authority.

97

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Gathering information: the Authority

Provision of information.

98

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Inspection of premises.

99

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Warrants.

100

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Information and inspection: penalties.

101

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Savings for certain privileges etc.

102

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Publishing reports.

103

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Disclosure of information: the Authority

Restricted information.

104

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Information supplied to the Authority by corresponding overseas authorities.

105

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Disclosure for facilitating discharge of functions by the Authority.

106

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Disclosure for facilitating discharge of functions by other supervisory authorities.

107

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Other permitted disclosures.

108

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Disclosure of information by the Inland Revenue.

109

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Gathering information: the Compensation Board

Provision of information.

110

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Information: penalties.

111

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Savings for certain privileges.

112

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Publishing reports.

113

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Disclosure of information.

114

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General

Offences by bodies corporate and partnerships.

115

(1) Where an offence under this Part committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(2) Where the affairs of a body corporate are managed by its members, subsection (1) applies in relation to the acts and defaults of a member in connection with his functions of management as to a director of a body corporate.

(3) Where an offence under this Part committed by a Scottish partnership is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, a partner, he as well as the partnership is guilty of the offence and liable to be proceeded against and punished accordingly.

Breach of regulations.

116

(1) Regulations made by virtue of any provision of this Part may provide for the contravention of any provision contained in any such regulations to be an offence under this Part and for the recovery on summary conviction for any such offence of a fine not exceeding level 5 on the standard scale.

(2) An offence under any provision of the regulations may be charged by reference to any day or longer period of time; and a person may be convicted of a second or subsequent offence under such a provision by reference to any period of time following the preceding conviction of the offence.

(3) Where by reason of the contravention of any provision contained in regulations made by virtue of this Part—

(a) a person is convicted of an offence under this Part, or

(b) a person pays a penalty under section 10 or under provision contained in regulations made by virtue of section 41C,

then, in respect of that contravention, he shall not, in a case within paragraph (a), be liable to pay such a penalty or, in a case within paragraph (b), be convicted of such an offence.

Overriding requirements.

117

(1) Where any provision mentioned in subsection (2) conflicts with the provisions of an occupational pension scheme—

(a) the provision mentioned in subsection (2), to the extent that it conflicts, overrides the provisions of the scheme, and

(b) the scheme has effect with such modifications as may be required in consequence of paragraph (a).

(2) The provisions referred to in subsection (1) are those of—

(a) this Part,

(b) any subordinate legislation made or having effect as if made under this Part, ...

Powers to modify this Part.

118

(1) Regulations may modify any provisions of this Part, in their application—

(a) to a trust scheme which applies to earners in employments under different employers,

(b) to a trust scheme of which there are no members who are in pensionable service under the scheme, or

(2) Regulations may provide for some or all of the provisions of sections 22 to 26, and section 117 (so far as it applies to those sections), not to apply in relation to a trust scheme falling within a prescribed class or description.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Calculations etc. under regulations: sub-delegation.

119

Regulations made by virtue of section ... 73B(4)(a) or 75 may provide for the values of the assets and the amounts of the liabilities there mentioned to be calculated and verified in accordance with guidance prepared and from time to time revised by a prescribed body.

Consultations about regulations.

120

(1) Before the Secretary of State makes any regulations by virtue of this Part, he must consult such persons as he considers appropriate.

(2) Subsection (1) does not apply—

(a) to regulations made for the purpose only of consolidating other regulations revoked by them,

(b) to regulations in the case of which the Secretary of State considers consultation inexpedient because of urgency,

(c) to regulations made before the end of the period of six months beginning with the coming into force of the provision of this Part by virtue of which the regulations are made, or

(d) to regulations which—

(i) state that they are consequential upon a specified enactment, and

(ii) are made before the end of the period of six months beginning with the coming into force of that enactment.

Crown application.

121

(1) This Part applies to an occupational pension scheme managed by or on behalf of the Crown as it applies to other occupational pension schemes; and, accordingly, references in this Part to a person in his capacity as a trustee or manager of an occupational pension scheme include the Crown, or a person acting on behalf of the Crown, in that capacity.

(2) References in this Part to a person in his capacity as employer in relation to an occupational pension scheme include the Crown, or a person acting on behalf of the Crown, in that capacity.

(3) This section does not apply to any provision made by or under this Part under which a person may be prosecuted for an offence; but such a provision applies to persons in the public service of the Crown as it applies to other persons.

(4) This section does not apply to sections 42 to 46.

(5) Nothing in this Part applies to Her Majesty in Her private capacity (within the meaning of the Crown Proceedings Act 1947).

Consequential amendments.

122

Schedule 3 (amendments consequential on this Part) shall have effect.

“Connected” and “associated” persons.

123

(1) Sections 249 and 435 of the Insolvency Act 1986 (connected and associated persons) shall apply for the purposes of the provisions of this Act listed in subsection (3) as they apply for the purposes of that Act.

(2) Section 229 of the Bankruptcy (Scotland) Act 2016 (meaning of “associate”) shall apply for the purposes of the provisions so listed as it applies for the purposes of that Act.

(3) The provisions referred to in subsections (1) and (2) are—

(a) section 23(3)(b),

(b) sections 27 and 28,

but in the case of section 40 the provisions mentioned in subsections (1) and (2) shall apply for those purposes with any prescribed modifications.

Interpretation of Part I.

124

(1) In this Part—

“active member”, in relation to an occupational pension scheme, means a person who is in pensionable service under the scheme,

“the actuary” and “the auditor”, in relation to an occupational pension scheme, have the meanings given by section 47,

“the Authority” means the Pensions Regulator,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“the Compensation Board” has the meaning given by section 78(1),

“the compensation provisions” has the meaning given by section 81(3),

“contravention” includes failure to comply,

“deferred member”, in relation to an occupational pension scheme, means a person (other than an active or pensioner member) who has accrued rights under the scheme,

“employer”, in relation to an occupational pension scheme, means the employer of persons in the description or category of employment to which the scheme in question relates (but see section 125(3)),

“equal treatment rule” has the meaning given by section 62,

“firm” means a body corporate or a partnership,

“fund manager”, in relation to an occupational pension scheme, means a person who manages the investments held for the purposes of the scheme,

“independent trustee” has the meaning given by section 23(3),

“managers”, in relation to an occupational pension scheme other than a trust scheme, means the persons responsible for the management of the scheme,

“member”, in relation to an occupational pension scheme, means any active, deferred , pensioner or pension credit member (but see section 125(4)),

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“normal pension age” has the meaning given by section 180 of the Pension Schemes Act 1993,

“payment schedule” has the meaning given by section 87(2),

“pension credit” means a credit under section 29(1)(b) of the Welfare Reform and Pensions Act 1999, or under corresponding Northern Ireland legislation,

“pension credit member”, in relation to an occupational pension scheme, means a person who has rights under the scheme which are attributable (directly or indirectly) to a pension credit,

“pension credit rights”, in relation to an occupational pension scheme, means rights to future benefits under the scheme which are attributable (directly or indirectly) to a pension credit,

“pensionable service”, in relation to a member of an occupational pension scheme, means service in any description or category of employment to which the scheme relates which qualifies the member (on the assumption that it continues for the appropriate period) for pension or other benefits under the scheme,

“pensioner member”, in relation to an occupational pension scheme, means a person who in respect of his pensionable service under the scheme or by reason of transfer credits, is entitled to the present payment of pension or other benefits ... ,

“prescribed” means prescribed by regulations,

“professional adviser”, in relation to a scheme, has the meaning given by section 47,

“public service pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993,

“regulations” means regulations made by the Secretary of State,

“resources”, in relation to an occupational pension scheme, means the funds out of which the benefits provided by the scheme are payable from time to time, including the proceeds of any policy of insurance taken out, or annuity contract entered into, for the purposes of the scheme,

“Scottish partnership” means a partnership constituted under the law of Scotland,

“the Taxes Act 1988” means the Income and Corporation Taxes Act 1988,

“transfer credits” means rights allowed to a member under the rules of an occupational pension scheme by reference to — a transfer to the scheme of, or transfer payment to the trustees or managers of the scheme in respect of, any of his rights (including transfer credits allowed) under another occupational pension scheme or a personal pension scheme, other than pension credit rights, ora cash transfer sum paid under Chapter 2 of Part 4ZA of the Pension Schemes Act 1993 (transfers and contribution refunds) in respect of him, to the trustees or managers of the scheme,

“trustees or managers”, in relation to an occupational pension scheme, means—in the case of a trust scheme, the trustees of the scheme, andin any other case, the managers of the scheme,

“trust scheme” means an occupational pension scheme established under a trust.

(2) For the purposes of this Part—

(a) the accrued rights of a member of an occupational pension scheme at any time are the rights which have accrued to or in respect of him at that time to future benefits under the scheme, and

(b) at any time when the pensionable service of a member of an occupational pension scheme is continuing, his accrued rights are to be determined as if he had opted, immediately before that time, to terminate that service;

and references to accrued pension or accrued benefits are to be interpreted accordingly.

(2A) In subsection (2)(a), the reference to rights which have accrued to or in respect of the member does not include any rights which are pension credit rights.

(3) In determining what is “pensionable service” for the purposes of this Part—

(a) service notionally attributable for any purpose of the scheme is to be disregarded, and

(b) no account is to be taken of any rules of the scheme by which a period of service can be treated for any purpose as being longer or shorter than it actually is but, in its application for the purposes of section 51, paragraph (b) does not affect the operation of any rules of the scheme by virtue of which a period of service is to be rounded up or down by a period of less than a month.

(3A) In a case of the winding-up of an occupational pension scheme in pursuance of an order of the Authority under section 11 or of an order of a court, the winding-up shall (subject to subsection (3E) and to sections 28, 154 and 219 of the Pensions Act 2004) be taken for the purposes of this Part to begin—

(a) if the order provides for a time to be the time when the winding-up begins, at that time; and

(b) in any other case, at the time when the order comes into force.

(3B) In a case of the winding-up of an occupational pension scheme in accordance with a requirement or power contained in the rules of the scheme, the winding-up shall (subject to subsections (3C) to (3E) and to sections 154 and 219 of the Pensions Act 2004) be taken for the purposes of this Part to begin—

(a) at the time (if any) which under those rules is the time when the winding-up begins; and

(b) if paragraph (a) does not apply, at the earliest time which is a time fixed by the trustees or managers as the time from which steps for the purposes of the winding-up are to be taken.

(3C) Subsection (3B) shall not require a winding-up of a scheme to be treated as having begun at any time before the end of any period during which effect is being given—

(a) to a determination under section 38 that the scheme is not for the time being to be wound up; or

(b) to a determination in accordance with the rules of the scheme to postpone the commencement of a winding-up.

(3D) In subsection (3B)(b) the reference to the trustees or managers of the scheme shall have effect in relation to any scheme the rules of which provide for a determination that the scheme is to be wound up to be made by persons other than the trustees or managers as including a reference to those other persons.

(3E) Subsections (3A) to (3D) above do not apply for such purposes as may be prescribed.

(4) In the application of this Part to Scotland, in relation to conviction on indictment, references to imprisonment are to be read as references to imprisonment for a term not exceeding two years.

(5) Subject to the provisions of this Act, expressions used in this Act and in the Pension Schemes Act 1993 have the same meaning in this Act as in that.

Section 124: supplementary.

125

(1) For the purposes of this Part, an occupational pension scheme is salary related if—

(a) the scheme is not a money purchase scheme, and

(b) the scheme does not fall within a prescribed class or description,

and “salary related trust scheme” is to be read accordingly.

(2) Regulations may apply this Part with prescribed modifications to occupational pension schemes—

(a) which are not money purchase schemes, but

(b) where some of the benefits that may be provided are money purchase benefits.

(3) Regulations may, in relation to occupational pension schemes, extend for the purposes of this Part the meaning of “employer” to include persons who have been the employer in relation to the scheme.

(4) For any of the purposes of this Part, regulations may in relation to occupational pension schemes—

(a) extend or restrict the meaning of “member”,

(b) determine who is to be treated as a prospective member, and

(c) determine the times at which a person is to be treated as becoming, or as ceasing to be, a member or prospective member.

Part II — State Pensions

Equalisation of pensionable age and of entitlement to certain benefits and increase in pensionable age.

126

Schedule 4 to this Act, of which—

(a) Part I has effect to equalise pensionable age for men and women and then to increase it,

(b) Part II makes provision for bringing equality for men and women to certain pension and other benefits, and

shall have effect.

Enhancement of additional pension, etc. where family credit or disability working allowance paid.

127

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional pension: calculation of surpluses.

128

(1) In section 44 of the Social Security Contributions and Benefits Act 1992 (Category A retirement pension), for subsection (5) (surplus on which additional pension is calculated) there is substituted—

(5A) For the purposes of this section and section 45 below— (a) there is a surplus in the pensioner’s earnings factor for a relevant year if that factor exceeds the qualifying earnings factor for that year, and (b) the amount of the surplus is the amount of that excess, as increased by the last order under section 148 of the Administration Act to come into force before the end of the final relevant year

(2) In subsection (6) of that section (calculation of earnings factors), for paragraphs (a)(ii) and (b) there is substituted—

(ii) his earnings factors derived from Class 2 and Class 3 contributions actually paid in respect of that year, or, if less, the qualifying earnings factor for that year; and (b) where the relevant year is an earlier tax year, to the aggregate of— (i) his earnings factors derived from Class 1 contributions actually paid by him in respect of that year, and (ii) his earnings factors derived from Class 2 and Class 3 contributions actually paid by him in respect of that year, or, if less, the qualifying earnings factor for that year.

(3) Section 148 of the Social Security Administration Act 1992 (revaluation of earnings factors) shall have effect in relation to surpluses in a person’s earnings factors under section 44(5A) of the Social Security Contributions and Benefits Act 1992 for the purposes of section 45(1) and (2)(a) and (b) of that Act as it has effect in relation to earnings factors.

(4) Subject to subsections (5), (5A) and (6) below, this section has effect in relation to a person (“the pensioner”) who attains pensionable age after 5th April 2000.

(5) Where the pensioner is a woman, this section has effect in the case of additional pension falling to be calculated under sections 44 and 45 of the Social Security Contributions and Benefits Act 1992 by virtue of section 39 of that Act (widowed mother’s allowance and widow’s pension), including Category B retirement pension payable under section 48B(4), if her husband—

(a) dies after 5th April 2000, and

(b) has not attained pensionable age on or before that date.

(5A) This section has effect in the case of additional pension falling to be calculated under sections 44 and 45 of the Social Security Contributions and Benefits Act 1992 by virtue of section 39C(1) of that Act (widowed parent’s allowance), including Category B retirement pension payable under section 48BB(2), if the pensioner’s spouse—

(a) dies after 5th April 2000, and

(b) has not attained pensionable age on or before that date.

(6) This section has effect where additional pension falls to be calculated under sections 44 and 45 of the Social Security Contributions and Benefits Act 1992 as applied by section ... 48B(2) or 48BB(5) of that Act (other Category B retirement pension) if—

(a) the pensioner attains pensionable age after 5th April 2000, and

(b) the pensioner’s spouse has not attained pensionable age on or before that date.

Contribution conditions.

129

In Schedule 3 to the Social Security Contributions and Benefits Act 1992 (contribution conditions), in paragraph 5(3)(a) (conditions for widowed mother’s allowance, widow’s pension and Category A and Category B retirement pension), after “class” there is inserted “ or been credited (in the case of 1987-88 or any subsequent year) with earnings ”.

130

(1) For section 156 of the Social Security Administration Act 1992 there is substituted—

(156) (1) This section applies in any case where a person is entitled to a Category A retirement pension with an increase, under section 52(3) of the Contributions and Benefits Act, in the additional pension on account of the contributions of a spouse who has died. (2) Where in the case of any up-rating order under section 150 above— (a) the spouse’s final relevant year is the tax year preceding the tax year in which the up-rating order comes into force, but (b) the person’s final relevant year was an earlier tax year, then the up-rating order shall not have effect in relation to that part of the additional pension which is attributable to the spouse’s contributions. (3) Where in the case of any up-rating order under section 150 above— (a) the person’s final relevant year is the tax year preceding the tax year in which the up-rating order comes into force, but (b) the spouse’s final relevant year was an earlier tax year, then the up-rating order shall not have effect in relation to that part of the additional pension which is attributable to the person’s contributions.

(2) In section 151(1) of that Act (effect of up-rating orders on additional pensions), after “and shall apply” there is inserted “ subject to section 156 and ”.

Graduated retirement benefit.

131

(1) In section 62(1) of the Social Security Contributions and Benefits Act 1992 (graduated retirement benefit), after paragraph (a) there is inserted—

(aa) for amending section 36(7) of that Act (persons to be treated as receiving nominal retirement pension) so that where a person has claimed a Category A or Category B retirement pension but— (i) because of an election under section 54(1) above, or (ii) because he has withdrawn his claim for the pension, he is not entitled to such a pension, he is not to be treated for the purposes of the preceding provisions of that section as receiving such a pension at a nominal weekly rate;

(2) In section 150(11) of the Social Security Administration Act 1992 (application of up-rating provisions to graduated retirement benefit) for the words following “provisions of this section” there is substituted—

(a) to the amount of graduated retirement benefit payable for each unit of graduated contributions, (b) to increases of such benefit under any provisions made by virtue of section 24(1)(b) of the Social Security Pensions Act 1975 or section 62(1)(a) of the Contributions and Benefits Act, and (c) to any addition under section 37(1) of the National Insurance Act 1965 (addition to weekly rate of retirement pension for widows and widowers) to the amount of such benefit.

(3) In section 155(7) of that Act (effect of alteration of rates of graduated retirement benefit) for the words following “provisions of this section” there is substituted—

(a) to the amount of graduated retirement benefit payable for each unit of graduated contributions, (b) to increases of such benefit under any provisions made by virtue of section 24(1)(b) of the Social Security Pensions Act 1975 or section 62(1)(a) of the Contributions and Benefits Act, and (c) to any addition under section 37(1) of the National Insurance Act 1965 (addition to weekly rate of retirement pension for widows and widowers) to the amount of such benefit

Extension of Christmas bonus for pensioners.

132

(1) Section 150 of the Social Security Contributions and Benefits Act 1992 (Christmas bonus: interpretation) is amended as follows.

(2) In subsection (1), after paragraph (k) there is inserted—

(l) a mobility supplement

(3) In subsection (2)—

(a) after the definition of “attendance allowance” there is inserted—

“mobility supplement” means a supplement awarded in respect of disablement which affects a person’s ability to walk and for which the person is in receipt of war disablement pension;

(b) in the definition of “retirement pension”, “ if paid periodically ” is omitted,

(c) in paragraph (b) of the definition of “unemployability supplement or allowance”, after sub-paragraph (iv) there is inserted

or (v) under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939.

and accordingly, the “or” immediately following sub-paragraph(iii) is omitted.

Contributions paid in error.

133

After section 61 of the Social Security Contributions and Benefits Act 1992 there is inserted—

(61A) (1) This section applies in the case of any individual if— (a) the individual has paid amounts by way of primary Class 1 contributions which, because the individual was not an employed earner, were paid in error, and (b) prescribed conditions are satisfied. (2) Regulations may, where— (a) this section applies in the case of any individual, and (b) the Secretary of State is of the opinion that it is appropriate for the regulations to apply to the individual, provide for entitlement to, and the amount of, additional pension to be determined as if the individual had been an employed earner and, accordingly, those contributions had been properly paid. (3) The reference in subsection (2) above to additional pension is to additional pension for the individual or the individual’s spouse falling to be calculated under section 45 above for the purposes of— (a) Category A retirement pension, (b) Category B retirement pension for widows or widowers, (c) widowed mother’s allowance and widow’s pension, and (d) incapacity benefit (except in transitional cases). (4) Regulations may, where— (a) this section applies in the case of any individual, and (b) the Secretary of State is of the opinion that it is appropriate for regulations made by virtue of section 4(8) of the Social Security (Incapacity for Work) Act 1994 (provision during transition from invalidity benefit to incapacity benefit for incapacity benefit to include the additional pension element of invalidity pension) to have the following effect in the case of the individual, provide for the regulations made by virtue of that section to have effect as if, in relation to the provisions in force before the commencement of that section with respect to that additional pension element, the individual had been an employed earner and, accordingly, the contributions had been properly paid. (5) Where such provision made by regulations as is mentioned in subsection (2) or (4) above applies in respect of any individual, regulations under paragraph 8(1)(m) of Schedule 1 to this Act may not require the amounts paid by way of primary Class 1 contributions to be repaid. (6) Regulations may provide, where— (a) such provision made by regulations as is mentioned in subsection (2) or (4) above applies in respect of any individual, (b) prescribed conditions are satisfied, and (c) any amount calculated by reference to the contributions in question has been paid in respect of that individual by way of minimum contributions under section 43 of the Pension Schemes Act 1993 (contributions to personal pension schemes), for that individual to be treated for the purposes of that Act as if that individual had been an employed earner and, accordingly, the amount had been properly paid

Minor amendments.

134

(1) In section 23(1) of the Social Security Contributions and Benefits Act 1992 (contribution conditions: supplemental), for “22(1)(a)” there is substituted “ 22(1) ”.

(2) Section 54(4) of that Act (effect on advance claims for retirement pension of deferral of entitlement) is omitted.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In section 122(1) of that Act (interpretation of Parts I to VI), after the definition of “week” there is inserted—

“working life” has the meaning given by paragraph 5(8) of Schedule 3 to this Act

(5) In paragraph 5(8) of Schedule 3 to that Act (contribution conditions: meaning of “working life”) for “this paragraph” there is substituted “ Parts I to VI of this Act ”.

Part III — Certification of pension schemes and effects on members’ state scheme rights and duties

Introductory

The “principal appointed day” for Part III.

135

An order under section 180 of this Act appointing a day for the coming into force of any provisions of this Part, being 6th April in any year, may designate that day as the principal appointed day for the purposes of this Part.

New certification requirements applying as from the principal appointed day

New requirements for contracted-out schemes.

136

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reduction in State scheme contributions, payment of rebates and reduction in State scheme benefits

State scheme contributions and rebates.

137

(1) In section 40 of the Pension Schemes Act 1993 (scope of Chapter II of Part III), in paragraph (b), after “members of” there is inserted “ money purchase contracted-out schemes and members of ”.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) After that section there is inserted—

(42A) (1) Subsections (2) and (3) apply where— (a) the earnings paid to or for the benefit of an earner in any tax week are in respect of an employment which is contracted-out employment at the time of the payment, and (b) the earner’s service in the employment is service which qualifies him for a pension provided by a money purchase contracted-out scheme. (2) The amount of a Class 1 contribution in respect of so much of the earnings paid in that week in respect of that employment as exceeds the current lower earnings limit but not the current upper earnings limit for that week (or the prescribed equivalents if he is paid otherwise than weekly) shall be reduced by an amount equal to the appropriate flat-rate percentage of that part of those earnings. (3) The Secretary of State shall except in prescribed circumstances or in respect of prescribed periods pay in respect of that earner and that tax week to the trustees or managers of the scheme or, in prescribed circumstances, to a prescribed person the amount by which— (a) the appropriate age-related percentage of that part of those earnings, exceeds (b) the appropriate flat-rate percentage of that part of those earnings. (4) Regulations may make provision— (a) as to the manner in which and time at which or period within which payments under subsection (3) are to be made, (b) for the adjustment of the amount which would otherwise be payable under that subsection so as to avoid the payment of trivial or fractional amounts, (c) for earnings to be calculated or estimated in such manner and on such basis as may be prescribed for the purpose of determining whether any, and if so what, payments under subsection (3) are to be made. (5) If the Secretary of State pays an amount under subsection (3) which he is not required to pay or is not required to pay to the person to whom, or in respect of whom, he pays it, he may recover it from any person to whom, or in respect of whom, he paid it. (6) Where— (a) an earner has ceased to be employed in an employment, and (b) earnings are paid to him or for his benefit within the period of six weeks, or such other period as may be prescribed, from the day on which he so ceased, that employment shall be treated for the purposes of this section as contracted-out employment at the time when the earnings are paid if it was contracted-out employment in relation to the earner when he was last employed in it. (7) Subsection (3) of section 41 applies for the purposes of this section as it applies for the purposes of that. (42B) (1) The Secretary of State shall at intervals of not more than five years lay before each House of Parliament— (a) a report by the Government Actuary or the Deputy Government Actuary on the percentages which, in his opinion, are required to be specified in an order under this section so as to reflect the cost of providing benefits of an actuarial value equivalent to that of the benefits which, under section 48A, are foregone by or in respect of members of money purchase contracted-out schemes, (b) a report by the Secretary of State stating what, in view of the report under paragraph (a), he considers those percentages should be, and (c) a draft of an order under subsection (2). (2) An order under this subsection shall have effect in relation to a period of tax years (not exceeding five) and may— (a) specify different percentages for primary and secondary Class 1 contributions, and (b) for each of the tax years for which it has effect— (i) specify a percentage in respect of all earners which is “the appropriate flat-rate percentage” for the purposes of section 42A, and (ii) specify different percentages (not being less than the percentage specified by virtue of sub-paragraph (i)) in respect of earners by reference to their ages on the last day of the preceding year (the percentage for each group of earners being “the appropriate age-related percentage” in respect of earners in that group for the purposes of section 42A). (3) If the draft of an order under subsection (2) is approved by resolution of each House of Parliament, the Secretary of State shall make the order in the form of the draft. (4) An order under subsection (2) shall have effect from the beginning of such tax year as may be specified in the order, not being a tax year earlier than the second after that in which the order is made. (5) Subsection (2) is without prejudice to the generality of section 182

(6) In Schedule 4 to that Act (priority in bankruptcy, etc.), in paragraph 2(3)—

(a) in paragraph (a), for “4.8 per cent.” there is substituted “ the percentage for non-contributing earners ”,

(b) in paragraph (b), for “3 per cent.” there is substituted “ the percentage for contributing earners ”.

(7) In paragraph 2(5) of that Schedule—

(a) before the definition of “employer” there is inserted—

“appropriate flat-rate percentage” has the same meaning as in section 42A

, and

(b) after the definition there is inserted—

“the percentage for contributing earners” means—

in relation to a salary related contracted-out scheme, 3 per cent, and

in relation to a money purchase contracted-out scheme, the percentage which is the appropriate flat-rate percentage for secondary Class 1 contributions,

“the percentage for non-contributing earners” means—

in relation to a salary related contracted-out scheme, 4.8 per cent, and

in relation to a money purchase contracted-out scheme, a percentage equal to the sum of the appropriate flat-rate percentages for primary and secondary Class 1 contributions

Minimum contributions towards appropriate personal pension schemes.

138

(1) Section 45 of the Pension Schemes Act 1993 (minimum contributions to personal pension schemes) is amended as follows.

(2) For subsection (1) there is substituted—

(1) In relation to any tax week falling within a period for which the Secretary of State is required to pay minimum contributions in respect of an earner, the amount of those contributions shall be an amount equal to the appropriate age-related percentage of so much of the earnings paid in that week (other than earnings in respect of contracted-out employment) as exceeds the current lower earnings limit but not the current upper earnings limit for that week (or the prescribed equivalents if he is paid otherwise than weekly)

(3) Subsection (2) is omitted.

(4) In subsection (3)(e), the words following “ prescribed period ” are omitted.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Money purchase and personal pension schemes: verification of ages.

139

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reduction in benefits for members of certified schemes.

140

(1) After section 48 of the Pension Schemes Act 1993 there is inserted—

(48A) (1) In relation to any tax week where— (a) the amount of a Class 1 contribution in respect of the earnings paid to or for the benefit of an earner in that week is reduced under section 41 or 42A, or (b) an amount is paid under section 45(1) in respect of the earnings paid to or for the benefit of an earner, section 44(6) of the Social Security Contributions and Benefits Act 1992 (earnings factors for additional pension) shall have effect, except in prescribed circumstances, as if no primary Class 1 contributions had been paid or treated as paid upon those earnings for that week and section 45A of that Act did not apply (where it would, apart from this subsection, apply). (2) Where the whole or part of a contributions equivalent premium has been paid or treated as paid in respect of the earner, the Secretary of State may make a determination reducing or eliminating the application of subsection (1). (3) Subsection (1) is subject to regulations under paragraph 5(3A) to (3E) of Schedule 2. (4) Regulations may, so far as is required for the purpose of providing entitlement to additional pension (such as is mentioned in section 44(3)(b) of the Social Security Contributions and Benefits Act 1992) but to the extent only that the amount of additional pension is attributable to provision made by regulations under section 45(5) of that Act, disapply subsection (1). (5) In relation to earners where, by virtue of subsection (1), section 44(6) of the Social Security Contributions and Benefits Act 1992 has effect, in any tax year, as mentioned in that subsection in relation to some but not all of their earnings, regulations may modify the application of section 44(5) of that Act.

(2) In section 48 of the Pension Schemes Act 1993 (effect of membership of money purchase contracted-out scheme or appropriate scheme on payment of social security benefits) in subsection (2), paragraph (b) is omitted and, in paragraph (c), “ if the earner dies before reaching pensionable age ” is omitted.

(3) Section 48 of that Act shall cease to have effect in relation to minimum payments made, or minimum contributions paid, on or after the principal appointed day.

Premiums and return to State scheme

State scheme etc. premiums and buyback into State scheme.

141

(1) In section 55 of the Pension Schemes Act 1993 (payment of state scheme premiums on termination of certified status), for subsection (2) there is substituted—

(2) Where— (a) an earner is serving in employment which is contracted-out employment by reference to an occupational pension scheme (other than a money purchase contracted-out scheme), (b) paragraph (a) ceases to apply, by reason of any of the following circumstances, before the earner attains the scheme’s normal pension age or (if earlier) the end of the tax year preceding that in which the earner attains pensionable age, and (c) the earner has served for less than two years in the employment, the prescribed person may elect to pay a premium under this subsection (referred to in this Act as a “contributions equivalent premium”). (2A) The circumstances referred to in subsection (2) are that— (a) the earner’s service in the employment ceases otherwise than on the earner’s death, (b) the earner ceases to be a member of the scheme otherwise than on the earner’s death, (c) the earner’s service in the employment ceases on the earner’s death and the earner dies leaving a widow or widower, (d) the scheme is wound up, (e) the scheme ceases to be a contracted-out occupational pension scheme; but paragraph (a), (b), (d) or (e) does not apply if the earner has an accrued right to short service benefit

(2) In Schedule 2 to that Act, in paragraph 5 (state scheme premiums)—

(a) in sub-paragraph (3)—

(i) “ in relation to state scheme premiums ” is omitted,

(ii) paragraph (b) is omitted, and

(iii) at the end there is added— “ and in this sub-paragraph and the following provisions of this paragraph “premium” means a contributions equivalent premium ”,

(b) after sub-paragraph (3) there is inserted—

(3A) Sub-paragraph (3B) applies in relation to a member of a contracted-out occupational pension scheme which is being wound up if, in the opinion of the Secretary of State— (a) the resources of the scheme are insufficient to meet the whole of the liability for the cash equivalent of the member’s rights under the scheme, and (b) if the resources of the scheme are sufficient to meet a part of that liability, that part is less than the amount required for restoring his State scheme rights. (3B) Where this sub-paragraph applies— (a) regulations may provide for treating the member as if sections 46 to 48 or, as the case may be, section 48A(1) did not apply, or applied only to such extent as is determined in accordance with the regulations, and (b) the amount required for restoring the member’s State scheme rights, or a prescribed part of that amount, shall be a debt due from the trustees or managers of the scheme to the Secretary of State. (3C) Regulations may make provision— (a) for determining the cash equivalent of a member’s rights under a scheme and the extent (if any) to which the resources of the scheme are insufficient to meet the liability for that cash equivalent, (b) for the recovery of any debt due under sub-paragraph (3B)(b), and (c) for determining the amount required for restoring a member’s State scheme rights including provision requiring the Secretary of State to apply whichever prescribed actuarial table in force at the appropriate time is applicable. (3D) Section 155 shall apply as if sub-paragraphs (3A) and (3B)(a), and regulations made by virtue of this sub-paragraph and sub-paragraph (3B)(b), were included among the provisions there referred to. (3E) In sub-paragraphs (3A) and (3B), “State scheme rights”, in relation to a member of a scheme, are the rights for which, if the scheme had not been a contracted-out scheme, the member would have been eligible by virtue of section 44(6) of the Social Security Contributions and Benefits Act 1992 (earnings factors for additional pension).

, and

Protected rights

Interim arrangements for giving effect to protected rights.

142

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Requirements for interim arrangements.

143

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interim arrangements: supplementary.

144

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Extension of interim arrangements to occupational pension schemes.

145

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Discharge of protected rights on winding up: insurance policies.

146

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous

Monitoring personal pension schemes.

147

After section 33 of the Pension Schemes Act 1993 there is inserted—

(33A) (1) If any person acting as an auditor or actuary of an appropriate scheme has reasonable cause to believe that— (a) any requirement which, in the case of the scheme, is required by section 9(5)(a) to be satisfied is not satisfied, and (b) the failure to satisfy the requirement is likely to be of material significance in the exercise by the Secretary of State of any of his functions relating to appropriate schemes, that person must immediately give a written report of the matter to the Secretary of State. (2) No duty to which a person acting as auditor or actuary of an appropriate scheme is subject shall be regarded as contravened merely because of any information or opinion contained in a written report under this section.

Earner employed in more than one employment.

148

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hybrid occupational pension schemes.

149

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dissolution of Occupational Pensions Board.

150

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minor and consequential amendments

151

Schedule 5 (which makes amendments related to sections 136 to 150) shall have effect.

Part IV — Miscellaneous and General

Transfer values

Extension of scope of right to cash equivalent.

152

(1) Section 93 of the Pension Schemes Act 1993 (scope of provisions relating to transfer values) is amended as follows.

(2) For subsection (1)(a) there is substituted—

(a) to any member of an occupational pension scheme— (i) whose pensionable service has terminated at least one year before normal pension age, and (ii) who on the date on which his pensionable service terminated had accrued rights to benefit under the scheme, except a member of a salary related occupational pension scheme whose pensionable service terminated before 1st January 1986 and in respect of whom prescribed requirements are satisfied

(3) After subsection (1) there is inserted—

(1A) For the purposes of this section and the following provisions of this Chapter, an occupational pension scheme is salary related if— (a) the scheme is not a money purchase scheme, and (b) the scheme does not fall within a prescribed class. (1B) Regulations may— (a) provide for this Chapter not to apply in relation to a person of a prescribed description, or (b) apply this Chapter with prescribed modifications to occupational pension schemes— (i) which are not money purchase schemes, but (ii) where some of the benefits that may be provided are money purchase benefits.

Right to guaranteed cash equivalent.

153

After section 93 of the Pension Schemes Act 1993 there is inserted—

(93A) (1) The trustees or managers of a salary related occupational pension scheme must, on the application of any member, provide the member with a written statement (in this Chapter referred to as a “statement of entitlement”) of the amount of the cash equivalent at the guarantee date of any benefits which have accrued to or in respect of him under the applicable rules. (2) In this section— - “the applicable rules” has the same meaning as in section 94; - “the guarantee date” means the date by reference to which the value of the cash equivalent is calculated, and must be— 1. within the prescribed period beginning with the date of the application, and 2. within the prescribed period ending with the date on which the statement of entitlement is provided to the member. (3) Regulations may make provision in relation to applications for a statement of entitlement, including, in particular, provision as to the period which must elapse after the making of such an application before a member may make a further such application. (4) If, in the case of any scheme, a statement of entitlement has not been provided under this section, section 10 of the Pensions Act 1995 (power of the Regulatory Authority to impose civil penalties) applies to any trustee or manager who has failed to take all such steps as are reasonable to secure compliance with this section.

Right to guaranteed cash equivalent: supplementary.

154

(1) In paragraph (a) of section 94(1) of the Pension Schemes Act 1993—

(a) after “occupational pension scheme” there is inserted “ other than a salary related scheme ”, and

(b) after “terminates” there is inserted “ (whether before or after 1st January 1986) ”.

(2) After that paragraph there is inserted—

(aa) a member of a salary related occupational pension scheme who has received a statement of entitlement and has made a relevant application within three months beginning with the guarantee date in respect of that statement acquires a right to his guaranteed cash equivalent

(3) After that subsection there is inserted—

(1A) For the purposes of subsection (1)(aa), a person’s “guaranteed cash equivalent” is the amount stated in the statement of entitlement mentioned in that subsection.

(4) In subsection (2) of that section, after the definition of “the applicable rules” there is inserted—

“the guarantee date” has the same meaning as in section 93A(2)

(5) After that subsection there is inserted—

(3) Regulations may provide that, in prescribed circumstances, subsection (1)(aa) does not apply to members of salary related occupational pension schemes or applies to them with prescribed modifications.

Penalties

Breach of regulations under the Pension Schemes Act 1993.

155

(1) For section 168 of the Pension Schemes Act 1993 (penalties for breach of regulations) there is substituted—

(168) (1) Regulations under any provision of this Act (other than Chapter II of Part VII) may make such provision as is referred to in subsection (2) or (4) for the contravention of any provision contained in regulations made or having effect as if made under any provision of this Act. (2) The regulations may provide for the contravention to be an offence under this Act and for the recovery on summary conviction of a fine not exceeding level 5 on the standard scale. (3) An offence under any provision of the regulations may be charged by reference to any day or longer period of time; and a person may be convicted of a second or subsequent offence under such a provision by reference to any period of time following the preceding conviction of the offence. (4) The regulations may provide for a person who has contravened the provision to pay to the Regulatory Authority, within a prescribed period, a penalty not exceeding an amount specified in the regulations; and the regulations must specify different amounts in the case of individuals from those specified in other cases and any amount so specified may not exceed the amount for the time being specified in the case of individuals or, as the case may be, others in section 10(2)(a) of the Pensions Act 1995. (5) Regulations made by virtue of subsection (4) do not affect the amount of any penalty recoverable under that subsection by reason of an act or omission occurring before the regulations are made. (6) Where— (a) apart from this subsection, a penalty under subsection (4) is recoverable from a body corporate or Scottish partnership by reason of any act or omission of the body or partnership as a trustee of a trust scheme, and (b) the act or omission was done with the consent or connivance of, or is attributable to any neglect on the part of, any persons mentioned in subsection (7), such a penalty is recoverable from each of those persons who consented to or connived in the act or omission or to whose neglect the act or omission was attributable. (7) The persons referred to in subsection (6)(b)— (a) in relation to a body corporate, are— (i) any director, manager, secretary, or other similar officer of the body, or a person purporting to act in any such capacity, and (ii) where the affairs of a body corporate are managed by its members, any member in connection with his functions of management, and (b) in relation to a Scottish partnership, are the partners. (8) Where the Regulatory Authority requires any person to pay a penalty by virtue of subsection (6), they may not also require the body corporate, or Scottish partnership, in question to pay a penalty in respect of the same act or omission. (9) A penalty under subsection (4) is recoverable by the Authority and any such penalty recovered by the Authority must be paid to the Secretary of State. (10) Where by reason of the contravention of any provision contained in regulations made, or having effect as if made, under this Act— (a) a person is convicted of an offence under this Act, or (b) a person pays a penalty under subsection (4), then, in respect of that contravention, he shall not, in a case within paragraph (a), be liable to pay such a penalty or, in a case within paragraph (b), be convicted of such an offence. (11) In this section “contravention” includes failure to comply, and “Scottish partnership” means a partnership constituted under the law of Scotland. (168A) (1) Any person who knowingly or recklessly provides the Registrar with information which is false or misleading in a material particular is guilty of an offence if the information— (a) is provided in purported compliance with a requirement under section 6, or (b) is provided otherwise than as mentioned in paragraph (a) above but in circumstances in which the person providing the information intends, or could reasonably be expected to know, that it would be used by the Registrar for the purpose of discharging his functions under this Act. (2) Any person guilty of an offence under subsection (1) is liable— (a) on summary conviction, to a fine not exceeding the statutory maximum, (b) on conviction on indictment, to imprisonment or a fine, or both

(2) In section 186 of that Act (Parliamentary control of orders and regulations), in subsection (3), after paragraph (c) there is inserted

or (d) regulations made by virtue of section 168(2)

Pensions Ombudsman

Employment of staff by the Pensions Ombudsman.

156

For section 145(4) of the Pension Schemes Act 1993 (staff of the Pensions Ombudsman), there is substituted—

(4A) The Pensions Ombudsman may (with the approval of the Secretary of State as to numbers) appoint such persons to be employees of his as he thinks fit, on such terms and conditions as to remuneration and other matters as the Pensions Ombudsman may with the approval of the Secretary of State determine. (4B) The Secretary of State may, on such terms as to payment by the Pensions Ombudsman as the Secretary of State thinks fit, make available to the Pensions Ombudsman such additional staff and such other facilities as he thinks fit. (4C) Any function of the Pensions Ombudsman, other than the determination of complaints made and disputes referred under this Part, may be performed by any— (a) employee appointed by the Pensions Ombudsman under subsection (4A), or (b) member of staff made available to him by the Secretary of State under subsection (4B), who is authorised for that purpose by the Pensions Ombudsman.

Jurisdiction of Pensions Ombudsman.

157

(1) Sections 146 to 151 of the Pension Schemes Act 1993 are amended as shown in subsections (2) to (11).

(2) In section 146 (investigations concerning the trustees or managers of schemes), for subsections (1) to (4) there is substituted—

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