Pensions Act 2004

(101AA) (1) This Chapter applies to any member of an occupational pension scheme to which Chapter 1 applies (see section 69(3)) if— (a) his pensionable service terminates before he attains normal pension age, and (b) on the date on which his pensionable service terminates— (i) the three month condition is satisfied, but (ii) he does not have relevant accrued rights to benefit under the scheme. (2) For the purposes of subsection (1), the three month condition is that the period of the member’s pensionable service under the scheme, taken together with— (a) any previous period of his pensionable service under the scheme, and (b) any period throughout which he was employed in linked qualifying service under another scheme, amounts to at least three months. (3) A period counts for the purposes of paragraph (a) or (b) of subsection (2) only so far as it counts towards qualification for long service benefit within the meaning of Chapter 1. (4) For the purposes of subsection (1), “relevant accrued rights to benefit under the scheme”, in relation to a member of a scheme, means rights which— (a) have accrued to or in respect of him under the scheme, and (b) entitle him to the relevant benefits which would have accrued to or in respect of him under the applicable rules if paragraphs (a) and (b) of section 71(1) (and the word “and” immediately preceding them) did not have effect. (5) References in the following provisions of this Chapter to a member, in relation to an occupational pension scheme, are to a member of the scheme to whom this Chapter applies. (101AB) (1) On the termination of his pensionable service, a member of an occupational pension scheme acquires a right to whichever one he elects of the following options— (a) a cash transfer sum; (b) a contribution refund. (2) Subsection (1) is subject to the following provisions of this Chapter. (3) In this Chapter “cash transfer sum” means, in relation to a member of an occupational pension scheme, the cash equivalent, at the date on which his pensionable service terminates, of the benefits mentioned in section 101AA(4)(b). (4) In this Chapter, “contribution refund” means, in relation to a member of an occupational pension scheme, a sum representing the aggregate of— (a) the member’s employee contributions to the scheme, and (b) where transfer credits have been allowed to the member under the scheme by virtue of a payment (“the transfer payment”) made by the trustees or managers of another occupational pension scheme, the member’s employee contributions to that other scheme, so far as they— (i) relate to the transfer payment, and (ii) do not, in aggregate, exceed the amount of the transfer payment. (5) In subsection (4), “employee contributions” means, in relation to a member of an occupational pension scheme, contributions made to the scheme by or on behalf of the member on his own account, but does not include— (a) a transfer payment by virtue of which transfer credits have been allowed to the member under the scheme, or (b) any pension credit or amount paid to the scheme which is attributable (directly or indirectly) to a pension credit. (101AC) (1) This section applies where the pensionable service of a member of an occupational pension scheme has terminated. (2) The trustees or managers of the scheme must— (a) within a reasonable period after the termination give the member a statement in writing containing information adequate to explain— (i) the nature of the right acquired by him under section 101AB, and (ii) how he may exercise the right, and such other information as may be prescribed, and (b) afford the member a reasonable period after giving him that statement within which to exercise the right. (3) The statement given under subsection (2)(a) must specify, in particular— (a) in relation to the cash transfer sum to which the member acquires a right under section 101AB, its amount and the permitted ways in which the member can use it, (b) the amount of the contribution refund to which the member so acquires a right, and (c) the last day on which the member may, disregarding section 101AI(2), exercise the right (“the reply date”). (4) Information which may be prescribed under subsection (2)(a) includes, in particular— (a) information about any tax liability in respect of, or deduction required or permitted to be made from, the cash transfer sum or contribution refund, and (b) information about the effect on other rights of the member (whether under the applicable rules or otherwise) of exercising the right. (5) The trustees or managers may notify the member that, if he does not exercise the right mentioned in subsection (2)(a)(i) on or before the reply date, the trustees or managers will be entitled to pay the contribution refund to him. (6) Where the trustees or managers of the scheme fail to comply with subsection (2), section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance. (101AD) (1) This section applies where a member of an occupational pension scheme acquires a right under section 101AB. (2) The member may exercise the right by giving a notice in writing to that effect to the trustees or managers stating— (a) which of the options under section 101AB(1) he elects, and (b) if he elects for the cash transfer sum, the permitted way in which he requires that sum to be used. (3) The notice under subsection (2) must be given on or before— (a) the reply date, or (b) such later date as the trustees or managers may allow in his case under section 101AI(2). (101AE) (1) This section applies in relation to a cash transfer sum to which a member of an occupational pension scheme acquires a right under section 101AB. (2) The ways in which the cash transfer sum may be used are— (a) for acquiring transfer credits allowed under the rules of another occupational pension scheme— (i) whose trustees or managers are able and willing to accept the cash transfer sum, and (ii) which satisfies prescribed requirements, (b) for acquiring rights allowed under the rules of a personal pension scheme— (i) whose trustees or managers are able and willing to accept the cash transfer sum, and (ii) which satisfies prescribed requirements, (c) for purchasing one or more appropriate annuities, (d) in such circumstances as may be prescribed, for subscribing to other pension arrangements which satisfy prescribed requirements. (3) For the purposes of subsection (2), “appropriate annuity” means an annuity which satisfies prescribed requirements and is purchased from an insurer who— (a) falls within section 19(4)(a), (b) is chosen by the member, and (c) is willing to accept payment on account of the member from the trustees or managers of the scheme. (101AF) (1) Cash transfer sums are to be calculated and verified in the prescribed manner. (2) Any calculation of a contribution refund must conform with such requirements as may be prescribed. (3) Regulations may provide— (a) for amounts to be deducted in respect of administrative costs in calculating cash transfer sums; (b) for a cash transfer sum or contribution refund to be increased or reduced in prescribed circumstances. (4) The circumstances that may be prescribed under subsection (3)(b) include in particular— (a) a failure by the trustees or managers of the scheme to comply with section 101AG(2) or (4) in relation to the cash transfer sum or contribution refund, and (b) the state of funding of the scheme. (5) Regulations under subsection (3)(b) may provide— (a) for a cash transfer sum to be reduced so that the member has no right to have any amount paid by way of cash transfer sum in respect of him; (b) for a contribution refund to be reduced so that the member has no right to receive any amount by way of contribution refund under this Chapter. (101AG) (1) This section applies where a member of an occupational pension scheme has exercised a right under section 101AB in accordance with section 101AD. (2) Where the member has elected for the cash transfer sum, the trustees or managers of the scheme must, within a reasonable period beginning with the date on which the right was exercised, do what is needed to carry out the requirement specified in the member’s notice under section 101AD(2)(b). (3) When the trustees or managers have done what is needed to carry out that requirement, they are discharged from any obligation— (a) in respect of any rights (including conditional rights) of, or in respect of, the member to relevant benefits under the applicable rules, and (b) to make any other payment by way of refund to or in respect of the member of, or in respect of— (i) the contributions, or any payment, mentioned in section 101AB(4), or (ii) any other contributions made to the scheme, or any other scheme, in respect of the member (other than any pension credit or amount attributable (directly or indirectly) to a pension credit). (4) Where the member has elected for the contribution refund, the trustees or managers of the scheme must, within a reasonable period beginning with the date on which the right was exercised, do what is needed to secure that the amount of the contribution refund is paid to the member or as he directs. (5) When the trustees or managers have done what is needed to secure the payment of the contribution refund as mentioned in subsection (4)— (a) they are discharged from any obligation in respect of any rights (including conditional rights) of, or in respect of, the member to relevant benefits under the applicable rules, and (b) if they are required under the applicable rules, or determine in accordance with those rules, to make any payment (“the refund payment”) by way of refund to or in respect of the member of, or in respect of— (i) the contributions, or any payment, mentioned in section 101AB(4), or (ii) any other contributions made to the scheme, or any other scheme, in respect of the member (other than any pension credit or amount attributable (directly or indirectly) to a pension credit), the amount of the contribution refund may be set off against the refund payment. (6) Where the trustees or managers fail to comply with subsection (2) or (4), section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance. (101AH) (1) This section applies where— (a) a member of an occupational pension scheme does not exercise a right acquired by him under section 101AB on or before the reply date or such later date as the trustees or managers of the scheme allow in his case under section 101AI(2), and (b) the trustees or managers of the scheme have notified the member as mentioned in section 101AC(5). (2) The trustees or managers may within a reasonable period beginning with— (a) the reply date, or (b) if a later date has been allowed as mentioned in subsection (1), that later date, pay the contribution refund to the member. (3) When the trustees or managers have paid the contribution refund to the member— (a) they are discharged from any obligation in respect of any rights (including conditional rights) of, or in respect of, the member to relevant benefits under the applicable rules, and (b) if they are required under the applicable rules, or determine in accordance with those rules, to make any payment (“the refund payment”) by way of refund to or in respect of the member of, or in respect of— (i) the contributions, or any payment, mentioned in section 101AB(4), or (ii) any other contributions made to the scheme, or any other scheme, in respect of the member (other than any pension credit or amount attributable (directly or indirectly) to a pension credit), the amount of the contribution refund may be set off against the refund payment. (101AI) (1) A member of an occupational pension scheme loses any right acquired by him under section 101AB— (a) if the scheme is wound up, or (b) subject to subsection (2), if he fails to exercise the right on or before the reply date. (2) If the member has failed to exercise any such right on or before the reply date, the trustees or managers of the scheme may allow him to exercise it on or before such later date as they may determine on the application of the member. (3) Where the trustees or managers determine a later date under subsection (2)— (a) they must give a notice in writing to that effect to the member, and (b) subsection (1)(b) applies in relation to the member as if the reference to the reply date were a reference to the later date. (4) For the purposes of subsection (3) and sections 101AC(2) and 101AD(2), a document or notice may be given to a person— (a) by delivering it to him, (b) by leaving it at his proper address, or (c) by sending it by post to him at that address. (5) For the purposes of subsection (4), and section 7 of the Interpretation Act 1978 (service of documents by post) in its application to that subsection, the proper address of a person is— (a) in the case of a body corporate, the address of the registered or principal office of the body, and (b) in any other case, the last known address of the person. (6) This Chapter is subject to any provision made by or under section 61 (deduction of contributions equivalent premium from refund of scheme contributions)— (a) permitting any amount to be deducted from any payment of a contribution refund, or (b) requiring the payment of a contribution refund to be delayed. (7) In this Chapter, except where the context otherwise requires, the following expressions have the following meanings— - “the applicable rules” means— 1. the rules of the scheme, except so far as overridden by a relevant legislative provision, 2. the relevant legislative provisions, to the extent that they have effect in relation to the scheme and are not reflected in the rules of the scheme, and 3. any provision which the rules of the scheme do not contain but which the scheme must contain if it is to conform with the requirements of Chapter 1 of this Part; - “member” has the meaning given in section 101AA(5); - “permitted way”, in relation to a cash transfer sum, means any of the ways specified in section 101AE(2) in which the sum may be used; - “relevant benefits” means benefits which are not attributable (directly or indirectly) to a pension credit; - “reply date”, in relation to a member whose pensionable service has terminated, has the meaning given in section 101AC(3)(c). (8) For the purposes of subsection (7)— (a) “relevant legislative provision” means any provision contained in any of the following provisions— (i) Schedule 5 to the Social Security Act 1989 (equal treatment for men and women); (ii) this Chapter or Chapter 2, 3 or 4 of this Part of this Act or regulations made under this Chapter or any of those Chapters; (iii) Part 4A of this Act or regulations made under that Part; (iv) section 110(1) of this Act; (v) Part 1 of the Pensions Act 1995 (occupational pensions) or subordinate legislation made or having effect as if made under that Part; (vi) section 31 of the Welfare Reform and Pensions Act 1999 (pension debits: reduction of benefit); (vii) any provision mentioned in section 306(2) of the Pensions Act 2004; (b) a relevant legislative provision is to be taken to override any of the provisions of the scheme if, and only if, it does so by virtue of any of the following provisions— (i) paragraph 3 of Schedule 5 to the Social Security Act 1989; (ii) section 129(1) of this Act; (iii) section 117(1) of the Pensions Act 1995; (iv) section 31(4) of the Welfare Reform and Pensions Act 1999; (v) section 306(1) of the Pensions Act 2004.

Safeguarding pension rights

Paternity leave and adoption leave

265

• (1) In Schedule 5 to the Social Security Act 1989 (c. 24) (employment-related schemes for pensions or other benefits: equal treatment), after paragraph 5 insert—

(5A) (1) Where an employment-related benefit scheme includes any unfair paternity leave provisions (irrespective of any differences on the basis of sex in the treatment accorded to members under those provisions), then— (a) the scheme shall be regarded to that extent as not complying with the principle of equal treatment; and (b) subject to sub-paragraph (3), this Schedule shall apply accordingly. (2) In this paragraph “unfair paternity leave provisions”, in relation to an employment-related benefit scheme, means any provision— (a) which relates to continuing membership of, or the accrual of rights under, the scheme during any period of paid paternity leave in the case of any member who is (or who, immediately before the commencement of such a period, was) an employed earner and which treats such a member otherwise than in accordance with the normal employment requirement; or (b) which requires the amount of any benefit payable under the scheme to or in respect of any such member, to the extent that it falls to be determined by reference to earnings during a period which included a period of paid paternity leave, to be determined otherwise than in accordance with the normal employment requirement. (3) In the case of any unfair paternity leave provision— (a) the more favourable treatment required by paragraph 3(1) is treatment no less favourable than would be accorded to the member in accordance with the normal employment requirement; and (b) paragraph 3(2) does not authorise the making of any such election as is there mentioned; but, in respect of any period of paid paternity leave, a member shall only be required to pay contributions on the amount of contractual remuneration or statutory paternity pay actually paid to or for him in respect of that period. (4) In this paragraph— - “period of paid paternity leave”, in the case of a member, means a period— 1. throughout which the member is absent from work in circumstances where sub-paragraph (5), (6) or (7) applies, and 2. for which the employer (or if he is no longer in his employment, his former employer) pays him any contractual remuneration or statutory paternity pay; and - “the normal employment requirement” is the requirement that any period of paid paternity leave shall be treated as if it were a period throughout which the member in question works normally and receives the remuneration likely to be paid for doing so. (5) This sub-paragraph applies if— (a) the member’s absence from work is due to the birth or expected birth of a child, and (b) the member satisfies the conditions prescribed under section 171ZA(2)(a)(i) and (ii) of the Social Security Contributions and Benefits Act 1992 in relation to that child. (6) This sub-paragraph applies if— (a) the member’s absence from work is due to the placement or expected placement of a child for adoption under the law of any part of the United Kingdom, and (b) the member satisfies the conditions prescribed under section 171ZB(2)(a)(i) and (ii) of that Act in relation to that child. (7) This sub-paragraph applies if— (a) the member’s absence from work is due to the adoption or expected adoption of a child who has entered the United Kingdom in connection with or for the purposes of adoption which does not involve the placement of the child for adoption under the law of any part of the United Kingdom, and (b) the member satisfies the conditions prescribed under section 171ZB(2)(a)(i) and (ii) of that Act (as applied by virtue of section 171ZK of that Act (adoption cases not involving placement under the law of the United Kingdom)) in relation to that child. (5B) (1) Where an employment-related benefit scheme includes any unfair adoption leave provisions (irrespective of any differences on the basis of sex in the treatment accorded to members under those provisions), then— (a) the scheme shall be regarded to that extent as not complying with the principle of equal treatment; and (b) subject to sub-paragraph (3), this Schedule shall apply accordingly. (2) In this paragraph “unfair adoption leave provisions”, in relation to an employment-related benefit scheme, means any provision— (a) which relates to continuing membership of, or the accrual of rights under, the scheme during any period of paid adoption leave in the case of any member who is (or who, immediately before the commencement of such a period, was) an employed earner and which treats such a member otherwise than in accordance with the normal employment requirement; or (b) which requires the amount of any benefit payable under the scheme to or in respect of any such member, to the extent that it falls to be determined by reference to earnings during a period which included a period of paid adoption leave, to be determined otherwise than in accordance with the normal employment requirement. (3) In the case of any unfair adoption leave provision— (a) the more favourable treatment required by paragraph 3(1) is treatment no less favourable than would be accorded to the member in accordance with the normal employment requirement; and (b) paragraph 3(2) does not authorise the making of any such election as is there mentioned; but, in respect of any period of paid adoption leave, a member shall only be required to pay contributions on the amount of contractual remuneration or statutory adoption pay actually paid to or for him in respect of that period. (4) In this paragraph— - “period of paid adoption leave”, in the case of a member, means a period— 1. throughout which the member is absent from work in circumstances where sub-paragraph (5) or (6) applies, and 2. for which the employer (or, if he is no longer in his employment, his former employer) pays him any contractual remuneration or statutory adoption pay; and - “the normal employment requirement” is the requirement that any period of paid adoption leave shall be treated as if it were a period throughout which the member in question works normally and receives the remuneration likely to be paid for doing so. (5) This sub-paragraph applies if— (a) the member’s absence from work is due to the placement, or expected placement, of a child for adoption under the law of any part of the United Kingdom, and (b) the member is a person with whom the child is, or is expected to be, placed for such adoption. (6) This sub-paragraph applies if— (a) the member’s absence from work is due to the adoption or expected adoption of a child who has entered the United Kingdom in connection with or for the purposes of adoption which does not involve the placement of the child for adoption under the law of any part of the United Kingdom, and (b) the member is a person by whom the child has been or is expected to be adopted.

• (2) The provision that may be made under section 142(1) of the Adoption and Children Act 2002 (c. 38) (power to make consequential etc provision to give full effect to any provision of that Act) includes provision modifying paragraph 5A or 5B of Schedule 5 to the Social Security Act 1989 (c. 24) (as inserted by subsection (1) above).

Inalienability of occupational pension

266

• (1) Section 91 of the Pensions Act 1995 (c. 26) (inalienability of occupational pension) is amended as follows.

• (2) In subsection (5) (exceptions to the rule of inalienability) at the end insert—

(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.

• (3) In subsection (6) (limits on the charge, lien or set-off under subsection (5)(d) or (e)) for “or (e)” substitute “ , (e) or (f) ”.

Voluntary contributions

Voluntary contributions

267

• (1) Omit section 111 of the Pension Schemes Act 1993 (c. 48) (requirements for schemes to provide facilities for members to pay voluntary contributions, and relating to any such contributions).

• (2) In section 132 of that Act (duty to bring schemes into conformity with indirectly-applying requirements) omit from “or the voluntary” to third “requirements”.

• (3) In section 181(1) of that Act (general interpretation) omit the definition of “voluntary contributions requirements”.

Payments by employers

Payments made by employers to personal pension schemes

268

• (1) Section 111A of the Pension Schemes Act 1993 (c. 48) (monitoring of employers' payments to personal pension schemes) is amended as follows.

• (2) For subsections (3) to (7) substitute—

(3) The trustees or managers of the scheme must monitor the payment of contributions by or on behalf of the employer under the direct payment arrangements. (4) The trustees or managers may request the employer to provide them, (or arrange for them to be provided) with the payment information specified in the request. (5) For the purposes of subsection (4) “payment information” is information required by the trustees or managers to enable them to discharge the duty imposed by subsection (3). (6) The employer must comply with a request under subsection (4) within a reasonable period. (7) Where, as a result of the employer’s failure to so comply, the trustees or managers are unable to discharge the duty imposed by subsection (3), they must give notice to that effect to the Regulatory Authority within a reasonable period. (7A) Where— (a) a contribution payable under the direct payment arrangements has not been paid on or before its due date, and (b) the trustees or managers have reasonable cause to believe that the failure to pay the contribution is likely to be of material significance in the exercise by the Regulatory Authority of any of their functions, they must give notice to that effect to the Regulatory Authority and the employee within a reasonable period after the due date.

• (3) In subsection (8) (employer’s liability for civil penalties) for “subsection (3) or (5)” substitute “ subsection (6) and as a result the trustees or managers of the scheme are unable to discharge the duty imposed by subsection (3) ”.

• (4) In subsection (9) (liability of trustees or managers for civil penalties) for “subsection (6) or (7)” substitute “ subsection (7) or (7A) ”.

Payments made by employers and members to occupational pension schemes

269

• (1) In section 49 of the Pensions Act 1995 (c. 26) (other responsibilities of trustees, employers, etc), in subsection (9) (duty of trustee etc to report a failure by employer to pay contributions deducted from earnings on time) for paragraph (b) substitute—

(b) if 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 the member within a reasonable period after the end of the prescribed period under subsection (8).

• (2) In section 88 of that Act (schedules of payments to money purchase schemes), for subsection (1) (duty of trustees or managers to report a failure to pay amounts on time) substitute—

(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.

Winding up

Winding up

270

• (1) For section 73 of the Pensions Act 1995 (c. 26) (preferential liabilities on winding up) substitute—

(73) (1) This section applies where an occupational pension scheme to which this section applies is being wound up to determine the order in which the assets of the scheme are to be applied towards satisfying the liabilities of the scheme in respect of pensions and other benefits. (2) This section applies to an occupational pension scheme other than a scheme which is— (a) a money purchase scheme, or (b) a prescribed scheme or a scheme of a prescribed description. (3) The assets of the scheme must be applied first towards satisfying the amounts of the liabilities mentioned in subsection (4) and, if the assets are insufficient to satisfy those amounts in full, then— (a) the assets must be applied first towards satisfying the amounts of the liabilities mentioned in earlier paragraphs of subsection (4) before the amounts of the liabilities mentioned in later paragraphs, and (b) where the amounts of the liabilities mentioned in one of those paragraphs cannot be satisfied in full, those amounts must be satisfied in the same proportions. (4) The liabilities referred to in subsection (3) are— (a) where— (i) the trustees or managers of the scheme are entitled to benefits under a relevant pre-1997 contract of insurance entered into in relation to the scheme, and (ii) either that contract may not be surrendered or the amount payable on surrender does not exceed the liability secured by the contract, the liability so secured; (b) any liability for pensions or other benefits to the extent that the amount of the liability does not exceed the corresponding PPF liability, other than a liability within paragraph (a); (c) any liability for pensions or other benefits which, in the opinion of the trustees or managers, are derived from the payment by any member of voluntary contributions, other than a liability within paragraph (a) or (b); (d) any other liability in respect of pensions or other benefits. (5) For the purposes of subsection (4)— - “corresponding PPF liability” in relation to any liability for pensions or other benefits means— 1. where the liability is to a member of the scheme, the cost of securing benefits for or in respect of the member corresponding to the compensation which would be payable to or in respect of the member in accordance with the pension compensation provisions if the Board of the Pension Protection Fund assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Pensions Act 2004 (pension protection), and 2. where the liability is to another person in respect of a member of the scheme, the cost of securing benefits for that person corresponding to the compensation which would be payable to that person in respect of the member in accordance with the pension compensation provisions if the Board assumed responsibility for the scheme in accordance with that Chapter; - “relevant pre-1997 contract of insurance” means a contract of insurance which was entered into before 6th April 1997 with a view to securing the whole or part of the scheme’s liability for— 1. any pension or other benefit payable to or in respect of one particular person whose entitlement to payment of a pension or other benefit has arisen, and 2. any benefit which will be payable in respect of that person on his death. (6) For the purposes of this section, when determining the corresponding PPF liability in relation to any liability of a scheme to, or in respect of, a member for pensions or other benefits, the pension compensation provisions apply with such modifications as may be prescribed. (7) Regulations may modify subsection (4). (8) For the purposes of that subsection— (a) regulations may prescribe how it is to be determined whether a liability for pensions or other benefits which, in the opinion of the trustees or managers of the scheme, are derived from the payment by any member of voluntary contributions falls within paragraph (a) or (b) of that subsection; (b) no pension or other benefit which is attributable (directly or indirectly) to a pension credit is to be regarded for the purposes of paragraph (c) of that subsection as derived from the payment of voluntary contributions. (9) Where, on the commencement of the winding up period, a member becomes a person to whom Chapter 5 of Part 4 of the Pension Schemes Act 1993 (early leavers: cash transfer sums and contribution refunds) applies, that Chapter applies in relation to him with such modifications as may be prescribed. (10) For the purposes of this section— - “assets” of a scheme to which this section applies do not include any assets representing the value of any rights in respect of money purchase benefits under the scheme rules; - “liabilities” of such a scheme do not include any liabilities in respect of money purchase benefits under the scheme rules; - “the pension compensation provisions” has the same meaning as in Part 2 of the Pensions Act 2004 (see section 162 of that Act); - “scheme rules” has the same meaning as in the Pensions Act 2004 (see section 318 of that Act); - “winding up period”, in relation to an occupational pension scheme to which this section applies, means the period which— 1. begins with the day on which the time immediately after the beginning of the winding up of the scheme falls, and 2. ends when the winding up of the scheme is completed. (73A) (1) This section applies where an occupational pension scheme to which section 73 applies is being wound up. (2) During the winding up period, the trustees or managers of the scheme— (a) must secure that any pensions or other benefits (other than money purchase benefits) paid to or in respect of a member are reduced, so far as necessary, to reflect the liabilities of the scheme to or in respect of the member which will be satisfied in accordance with section 73, and (b) may, for the purposes of paragraph (a), take such steps as they consider appropriate (including steps adjusting future payments) to recover any overpayment or pay any shortfall. (3) During the winding up period— (a) no benefits may accrue under the scheme rules to, or in respect of, members of the scheme, and (b) no new members of any class may be admitted to the scheme. (4) Subsection (3) does not prevent any increase, in a benefit, which would otherwise accrue in accordance with the scheme or any enactment. (5) Subsection (3) does not prevent the accrual of money purchase benefits to the extent that they are derived from income or capital gains arising from the investment of payments which are made by, or in respect of, a member of the scheme. (6) Where a person is entitled to a pension credit derived from another person’s shareable rights under the scheme, subsection (3) does not prevent the trustees or managers of the scheme discharging their liability in respect of the credit under Chapter 1 of Part 4 of the Welfare Reform and Pensions Act 1999 (sharing of rights under pension arrangements) by conferring appropriate rights under the scheme on that person. (7) Regulations may require the trustees or managers of the scheme, in prescribed circumstances— (a) to adjust the entitlement of a person to a pension or other benefit under the scheme rules where the entitlement arises as a result of a discretionary award which takes effect during the winding up period; (b) to adjust the entitlement of a person (“the survivor”) to a pension or other benefit under the scheme rules where— (i) a member of the scheme, or a person who was (or might have become) entitled to a pension or other benefit in respect of a member, dies during the winding up period, and (ii) the survivor’s entitlement is to a pension or other benefit in respect of the member (whether arising on the date of that death or subsequently). (8) Regulations under subsection (7) may, in particular— (a) prescribe how the required adjustments to entitlement are to be determined and the manner in which they are to be made; (b) in a case where the commencement of the winding up of the scheme is backdated (whether in accordance with section 154 of the Pensions Act 2004 (requirement to wind up schemes with sufficient assets to meet protected liabilities) or otherwise), require any adjustment to a person’s entitlement to be made with effect from the time the award takes effect; (c) without prejudice to sections 10(3) to (9), 73B(2) and 116, make provision about the consequences of breaching the requirements of the regulations. (9) If the scheme confers power on any person other than the trustees or managers of the scheme to apply the assets of the scheme in respect of pensions or other benefits (including increases in pensions or benefits), it cannot be exercised by that person but may, subject to the provisions made by or by virtue of this section and sections 73 and 73B, be exercised instead by the trustees or managers. (10) For the purposes of this section— - “appropriate rights” has the same meaning as in paragraph 5 of Schedule 5 to the Welfare Reform and Pensions Act 1999 (pension credits: mode of discharge); - “discretionary award” means an award of a prescribed description; - “shareable rights” has the same meaning as in Chapter 1 of Part 4 of the Welfare Reform and Pensions Act 1999 (sharing of rights under pension arrangements); - and subsection (10) of section 73 applies as it applies for the purposes of that section. (73B) (1) Any action taken in contravention of section 73A(3) is void. (2) If any provision made by or by virtue of the winding up provisions is not complied with in relation to a scheme to which section 73 applies, section 10 applies to any trustee or manager of the scheme who has failed to take all reasonable steps to secure compliance. (3) For the purposes of subsection (2), when determining whether section 73A(3) has been complied with subsection (1) of this section is to be disregarded. (4) Regulations may— (a) prescribe how, for the purposes of the winding up provisions— (i) the assets and liabilities of a scheme to which section 73 applies, and (ii) their value or amount, are to be determined, calculated and verified; (b) modify any of the winding up provisions as it applies— (i) to prescribed schemes or prescribed descriptions of schemes; (ii) in relation to a scheme where only part of the scheme is being wound up; (iii) in relation to a case where any liability of the scheme in respect of a member has been discharged by virtue of regulations under section 135(4) of the Pensions Act 2004 (power to make regulations permitting discharge of scheme’s liabilities during an assessment period). (5) Without prejudice to the generality of subsection (4), regulations under paragraph (b)(i) of that subsection may, in particular, modify any of the winding up provisions as it applies in relation to a scheme in relation to which there is more than one employer. (6) The winding up provisions do not apply— (a) in relation to any liability for an amount by way of pensions or other benefits which a person became entitled to payment of, under the scheme rules, before commencement of the winding up period, (b) in prescribed circumstances, in relation to any liability in respect of rights of a prescribed description to which a member of the scheme became entitled under the scheme rules by reason of his pensionable service under the scheme terminating before the commencement of the winding up period, (c) in relation to any liability in respect of rights of prescribed descriptions to which a member of the scheme had become entitled under the scheme rules before the commencement of the winding up period, or (d) in relation to any liability the discharge of which is validated under section 136 of the Pensions Act 2004 (power to validate actions taken during an assessment period to discharge liabilities of a scheme). (7) But nothing in subsection (6) prevents the winding up provisions applying in relation to a liability under Chapter 4 of Part 4 of the Pension Schemes Act 1993 (transfer values) which— (a) arose before the commencement of the winding up of the scheme, and (b) was not discharged before the commencement of the winding up period. (8) Regulations may provide that, in prescribed circumstances, where— (a) an occupational pension scheme to which section 73 applies is being wound up, (b) a member of the scheme died before the winding up began, and (c) during the winding up period a person becomes entitled under the scheme rules to a benefit of a prescribed description in respect of the member, his entitlement to payment of all or part of the benefit is, for the purposes of subsection (6), to be treated as having arisen immediately before the commencement of the winding up period. (9) If, immediately before the winding up period in relation to an occupational pension scheme to which section 73 applies, a person is entitled to an amount but has postponed payment of it, he is not, for the purposes of subsection (6), to be regarded as having become entitled to payment of the amount before that period. (10) For the purposes of this section— (a) “winding up provisions” means this section and sections 73, 73A and 74, and (b) subsection (10) of section 73 applies as it applies for the purposes of that section.

• (2) In section 74 of the Pensions Act 1995 (c. 26) (discharge of liabilities by insurance, etc on winding up)—

• (a) for subsection (1) substitute—

(1) This section applies where an occupational pension scheme to which section 73 applies is being wound up.

,

• (b) in subsection (2) omit “(including increases in pensions)”,

• (c) in subsection (3), after paragraph (d) insert—

(e) by the payment of a cash sum in circumstances where prescribed requirements are met.

,

• (d) in subsection (4)—

• (i) for “rules of the scheme” substitute “ scheme rules ”, and

• (ii) omit “(including increases in pensions)”,

• (e) omit subsection (5)(b) and the word “or” immediately preceding it, and

• (f) after subsection (5) insert—

(6) For the purposes of this section— (a) references to assets of the scheme do not include any assets representing the value of any rights in respect of money purchase benefits under the scheme rules, and (b) references to liabilities of the scheme do not include any liabilities in respect of money purchase benefits under the scheme rules; and “scheme rules” has the same meaning as in the Pensions Act 2004 (see section 318 of that Act).

Deficiency in assets of certain occupational pension schemes

Debt due from the employer when assets insufficient

271

• (1) Section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the assets) is amended as follows.

• (2) For subsections (1) to (4) substitute—

(1) This section applies in relation to an occupational pension scheme other than a scheme which is— (a) a money purchase scheme, or (b) a prescribed scheme or a scheme of a prescribed description. (2) If— (a) at any time which falls— (i) when a scheme is being wound up, but (ii) before any relevant event in relation to the employer which occurs while the scheme is being wound up, the value of the assets of the scheme is less than the amount at that time of the liabilities of the scheme, and (b) the trustees or managers of the scheme designate that time for the purposes of this subsection (before the occurrence of an event within paragraph (a)(ii)), an amount equal to the difference shall be treated as a debt due from the employer to the trustees or managers of the scheme. This is subject to subsection (3). (3) Subsection (2) applies only if— (a) either— (i) no relevant event within subsection (6A)(a) or (b) occurred in relation to the employer during the period beginning with the appointed day and ending with the commencement of the winding up of the scheme, or (ii) during the period— (a) beginning with the occurrence of the last such relevant event which occurred during the period mentioned in sub-paragraph (i), and (b) ending with the commencement of the winding up of the scheme, a cessation notice was issued in relation to the scheme and became binding, and (b) no relevant event within subsection (6A)(c) has occurred in relation to the employer during the period mentioned in paragraph (a)(i). (4) Where— (a) immediately before a relevant event (“the current event”) occurs in relation to the employer the value of the assets of the scheme is less than the amount at that time of the liabilities of the scheme, (b) the current event— (i) occurred on or after the appointed day, and (ii) did not occur in prescribed circumstances, (c) if the scheme was being wound up immediately before that event, subsection (2) has not applied in relation to the scheme to treat an amount as a debt due from the employer to the trustees or managers of the scheme, (d) if the current event is within subsection (6A)(a) or (b), either— (i) no relevant event within subsection (6A)(a) or (b) occurred in relation to the employer during the period beginning with the appointed day and ending immediately before the current event, or (ii) a cessation event has occurred in relation to the scheme in respect of a cessation notice issued during the period— (a) beginning with the occurrence of the last such relevant event which occurred during the period mentioned in sub-paragraph (i), and (b) ending immediately before the current event, and (e) no relevant event within subsection (6A)(c) has occurred in relation to the employer during the period mentioned in paragraph (d)(i), an amount equal to the difference shall be treated as a debt due from the employer to the trustees or managers of the scheme. (4A) Where the current event is within subsection (6A)(a) or (b), the debt under subsection (4) is to be taken, for the purposes of the law relating to insolvency as it applies to the employer, to arise immediately before the occurrence of the current event. (4B) Subsection (4C) applies if, in a case within subsection (4)— (a) the current event is within subsection (6A)(a) or (b), and (b) the scheme was not being wound up immediately before that event. (4C) Where this subsection applies, the debt due from the employer under subsection (4) is contingent upon— (a) a scheme failure notice being issued in relation to the scheme after the current event and the following conditions being satisfied— (i) the scheme failure notice is binding, (ii) no relevant event within subsection (6A)(c) has occurred in relation to the employer before the scheme failure notice became binding, and (iii) a cessation event has not occurred in relation to the scheme in respect of a cessation notice issued during the period— (a) beginning with the occurrence of the current event, and (b) ending immediately before the issuing of the scheme failure notice, and the occurrence of such a cessation event in respect of a cessation notice issued during that period is not a possibility, or (b) the commencement of the winding up of the scheme before— (i) any scheme failure notice or cessation notice issued in relation to the scheme becomes binding, or (ii) any relevant event within subsection (6A)(c) occurs in relation to the employer.

• (3) In subsection (5) for “subsection (1)” substitute “ subsections (2) and (4) ”.

• (4) In subsection (6)—

• (a) after “scheme” insert “ rules ”, and

• (b) at the end insert— “ In this subsection “scheme rules” has the same meaning as in the Pensions Act 2004 (“the 2004 Act”) (see section 318 of that Act). ”

• (5) After subsection (6) insert—

(6A) For the purposes of this section, a relevant event occurs in relation to the employer in relation to an occupational pension scheme if and when— (a) an insolvency event occurs in relation to the employer, (b) the trustees or managers of the scheme make an application under subsection (1) of section 129 of the 2004 Act or receive a notice from the Board of the Pension Protection Fund under subsection (5)(a) of that section, or (c) 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). (6B) For the purposes of this section— (a) a “cessation notice”, in the case of a relevant event within subsection (6A)(a), means— (i) a withdrawal notice issued under section 122(2)(b) of the 2004 Act (scheme rescue has occurred), (ii) a withdrawal notice issued under section 148 of that Act (no insolvency event has occurred or is likely to occur), (iii) a notice issued under section 122(4) of that Act (inability to confirm status of scheme) in a case where the notice has become binding and section 148 of that Act does not apply, (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), (c) a cessation event occurs in relation to a scheme when a cessation notice in relation to the scheme becomes binding, (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 (c) any appeal against his determination or directions, 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) either— (i) the voluntary winding up of the employer is stayed other than in prescribed circumstances, or (ii) a meeting of creditors is held in relation to the employer under section 95 of that Act (creditors' meeting which has the effect of converting a members' voluntary winding up into a 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.

• (6) Omit subsection (9).

Debt due from the employer in the case of multi-employer schemes

272

After section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the assets) insert—

(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”).

Pension disputes

Resolution of disputes

273

For section 50 of the Pensions Act 1995 (c. 26) (resolution of disputes) substitute—

(50) (1) The trustees or managers of an occupational pension scheme must secure that dispute resolution arrangements complying with the requirements of this section are made and implemented. (2) Dispute resolution arrangements are arrangements for the resolution of pension disputes. (3) For this purpose a pension dispute is a dispute which— (a) is between— (i) the trustees or managers of a scheme, and (ii) one or more persons with an interest in the scheme (see section 50A), (b) is about matters relating to the scheme, and (c) is not an exempted dispute (see subsection (9)). (4) The dispute resolution arrangements must provide a procedure— (a) for any of the parties to the dispute mentioned in subsection (3)(a)(ii) to make an application for a decision to be taken on the matters in dispute (“an application for the resolution of a pension dispute”), and (b) for the trustees or managers to take that decision. (4A) The dispute resolution arrangements may make provision for securing that an application for the resolution of a pension dispute may not be made to the trustees or managers unless— (a) the matters in dispute have been previously referred to a person of a description specified in the arrangements (“the specified person”) in order for him to consider those matters, and (b) the specified person has given his decision on those matters, and for enabling the specified person's decision to be confirmed or replaced by the decision taken by the trustees or managers on the application, after reconsidering those matters. (5) Where an application for the resolution of a pension dispute is made in accordance with the dispute resolution arrangements, the trustees or managers must— (a) take the decision required on the matters in dispute within a reasonable period of the receipt of the application by them, and (b) notify the applicant of the decision within a reasonable period of it having been taken. (5A) In a case where a reference is made to the specified person in accordance with provision made under subsection (4A), subsection (5) applies in relation to the specified person as it applies in relation to the trustees or managers in a case where an application for the resolution of a pension dispute is made to them. (6) The procedure provided for by the dispute resolution arrangements in pursuance of subsection (4) must include the provision required by section 50B. (7) Dispute resolution arrangements under subsection (1) must, in the case of existing schemes, have effect on and after the date of commencement of this section in relation to applications made on or after that date. (8) This section does not apply in relation to an occupational pension scheme if— (a) every member of the scheme is a trustee of the scheme, (b) the scheme has no more than one member, or (c) the scheme is of a prescribed description. (9) For the purposes of this section a dispute is an exempted dispute if— (a) proceedings in respect of it have been commenced in any court or tribunal, (b) the Pensions Ombudsman has commenced an investigation in respect of it as a result of a complaint made or a dispute referred to him, or (c) it is of a prescribed description. (10) If, in the case of an occupational pension scheme, the dispute resolution arrangements required by this section to be made— (a) have not been made, or (b) are not being implemented, section 10 applies to any of the trustees or managers who have failed to take all reasonable steps to secure that such arrangements are made or implemented. (50A) (1) For the purposes of section 50 a person is a person with an interest in an occupational pension scheme if— (a) he is a member of the scheme, (b) he is a widow, widower or surviving dependant of a deceased member of the scheme, (c) he is a surviving non-dependant beneficiary of a deceased member of the scheme, (d) he is a prospective member of the scheme, (e) he has ceased to be within any of the categories of persons referred to in paragraphs (a) to (d), or (f) he claims to be such a person as is mentioned in paragraphs (a) to (e) and the dispute relates to whether he is such a person. (2) In subsection (1)(c) a “non-dependant beneficiary”, in relation to a deceased member of an occupational pension scheme, means a person who, on the death of the member, is entitled to the payment of benefits under the scheme. (3) In subsection (1)(d) a “prospective member” means any person who, under the terms of his contract of service or the rules of the scheme— (a) is able, at his own option, to become a member of the scheme, (b) will become so able if he continues in the same employment for a sufficiently long period, (c) will be admitted to the scheme automatically unless he makes an election not to become a member, or (d) may be admitted to it subject to the consent of his employer. (50B) (1) The procedure provided for by the dispute resolution arrangements in pursuance of section 50(4) must (in accordance with section 50(6)) include the following provision. (2) The procedure must provide that an application for the resolution of a pension dispute under section 50(4) may be made or continued on behalf of a person who is a party to the dispute mentioned in section 50(3)(a)(ii)— (a) where the person dies, by his personal representative, (b) where the person is a minor or is otherwise incapable of acting for himself, by a member of his family or some other person suitable to represent him, and (c) in any other case, by a representative nominated by him. (3) The procedure— (a) must include provision requiring an application to which subsection (3A) applies to be made by the end of such reasonable period as is specified; (b) may include provision about the time limits for making such other applications for the resolution of pension disputes as are specified. (3A) This subsection applies to— (a) any application by a person with an interest in a scheme as mentioned in section 50A(1)(e), and (b) any application by a person with an interest in a scheme as mentioned in section 50A(1)(f) who is claiming to be such a person as is mentioned in section 50A(1)(e). (4) The procedure must include provision about— (a) the manner in which an application for the resolution of a pension dispute is to be made, (b) the particulars which must be included in such an application, and (c) the manner in which any decisions required in relation to such an application are to be reached and given. (4A) The provision made under subsection (4)(c) may include provision for decisions of the trustees or managers to be taken on their behalf by one or more of their number. (5) The procedure must provide that if, after an application for the resolution of a pension dispute has been made, the dispute becomes an exempted dispute within the meaning of section 50(9)(a) or (b), the resolution of the dispute under the procedure ceases.

The Pensions Ombudsman

The Pensions Ombudsman and Deputy Pensions Ombudsmen

274

• (1) In subsection (2) of section 145 of the Pension Schemes Act 1993 (c. 48) (the Pensions Ombudsman) after “hold” insert “ and vacate ”.

• (2) For subsection (3) of that section substitute—

(3) The Pensions Ombudsman may resign or be removed from office in accordance with those terms and conditions.

• (3) After that section insert—

(145A) (1) The Secretary of State may appoint one or more persons to act as a deputy to the Pensions Ombudsman (“a Deputy Pensions Ombudsman”). (2) Any such appointment is to be upon such terms and conditions as the Secretary of State thinks fit. (3) A Deputy Pensions Ombudsman— (a) is to hold and vacate office in accordance with the terms and conditions of his appointment, and (b) may resign or be removed from office in accordance with those terms and conditions. (4) A Deputy Pensions Ombudsman may perform the functions of the Pensions Ombudsman— (a) during any vacancy in that office, (b) at any time when the Pensions Ombudsman is for any reason unable to discharge his functions, or (c) at any other time, with the consent of the Secretary of State. (5) References to the Pensions Ombudsman in relation to the performance of his functions are accordingly to be construed as including references to a Deputy Pensions Ombudsman in relation to the performance of those functions. (6) The Secretary of State may— (a) pay to or in respect of a Deputy Pensions Ombudsman such amounts— (i) by way of remuneration, compensation for loss of office, pension, allowances and gratuities, or (ii) by way of provision for any such benefits, as the Secretary of State may determine, and (b) reimburse the Pensions Ombudsman in respect of any expenses incurred by a Deputy Pensions Ombudsman in the performance of any of the Pensions Ombudsman’s functions.

• (4) In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975 (c. 24) (other disqualifying offices), after “Pensions Ombudsman” insert “ and any deputy to that Ombudsman appointed under section 145A of the Pension Schemes Act 1993 ”.

• (5) In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (c. 25)(other disqualifying offices), at the appropriate place insert— “ Pensions Ombudsman and any deputy to that Ombudsman appointed under section 145A of the Pension Schemes Act 1993. ”

• (6) The persons to whom section 1 of the Superannuation Act 1972 (c. 11) (persons to or in respect of whom benefits may be provided by schemes under that section) applies are to include a deputy to the Pensions Ombudsman.

• (7) The Pensions Ombudsman must pay to the Minister for the Civil Service, at such times as he may direct, such sums as he may determine in respect of the increase attributable to subsection (6) in the sums payable out of money provided by Parliament under that Act.

• (8) The Pensions Ombudsman must also pay to the Minister for the Civil Service, at such times as he may direct, such sums as he may determine in respect of the amount payable out of money provided by Parliament under that Act which is attributable to the following persons being persons to whom section 1 of that Act applies—

• (a) the Pensions Ombudsman;

• (b) the employees of the Pensions Ombudsman.

Jurisdiction

275

• (1) After section 146(4) of the Pension Schemes Act 1993 (c. 48) (power to apply Part 10 of that Act to those concerned with the administration of a scheme) insert—