Pensions Act 2008

(13A) (1) An eligible person is entitled, if he so wishes, but subject to any conditions prescribed by regulations made by the Treasury and to the following provisions of this section, to pay Class 3 contributions in respect of a missing year. (2) A missing year is a tax year not earlier than 1975-76 in respect of which the person would under regulations under section 13 be entitled to pay Class 3 contributions but for a limit on the time within which contributions may be paid in respect of that year. (3) A person is not entitled to pay contributions in respect of more than 6 tax years under this section. (4) A person is not entitled to pay any contribution under this section after the end of 6 years beginning with the day on which he attains pensionable age. (5) A person is an eligible person if the following conditions are satisfied. (6) The first condition is that the person attained or will attain pensionable age in the period— (a) beginning with 6th April 2008, and (b) ending with 5th April 2015. (7) The second condition is that there are at least 20 tax years each of which is a year to which subsection (8) or (10) applies. (8) This subsection applies if— (a) the year is one in respect of which the person has paid or been credited with contributions that are of a relevant class for the purposes of paragraph 5 or 5A of Schedule 3 or been credited (in the case of 1987-88 or any subsequent year) with earnings, and (b) in the case of that year, the earnings factor derived as mentioned in subsection (9) is not less than the qualifying earnings factor for that year. (9) For the purposes of subsection (8)(b) the earnings factor— (a) in the case of 1987-88 or any subsequent year, is that which is derived from— (i) so much of the person's earnings as did not exceed the upper earnings limit and upon which such of the contributions mentioned in subsection (8)(a) as are primary Class 1 contributions were paid or treated as paid or earnings credited, and (ii) any Class 2 or Class 3 contributions for the year, or (b) in the case of any earlier year, is that which is derived from the contributions mentioned in subsection (8)(a). (10) This subsection applies (in the case of a person who attained or will attain pensionable age before 6th April 2010) if the year is one in which the person was precluded from regular employment by responsibilities at home within the meaning of regulations under paragraph 5(7) of Schedule 3. (11) The third condition applies only if the person attained or will attain pensionable age before 6th April 2010. (12) That condition is that— (a) the person has, in respect of any one tax year before that in which he attains pensionable age, actually paid contributions that are of a relevant class for the purposes of paragraph 5 of Schedule 3, and (b) in the case of that year, the earnings factor derived as mentioned in subsection (13) is not less than the qualifying earnings factor for that year. (13) For the purposes of subsection (12)(b) the earnings factor— (a) in the case of 1987-88 or any subsequent year, is that which is derived from— (i) so much of the person's earnings as did not exceed the upper earnings limit and upon which such of the contributions mentioned in subsection (12)(a) as are primary Class 1 contributions were paid or treated as paid, and (ii) any Class 2 or Class 3 contributions for the year, or (b) in the case of any earlier year, is that which is derived from the contributions mentioned in subsection (12)(a).

• (3) In section 1(2)(d) (outline of contribution system) after “section 13” insert “ or 13A ”.

Official pensions: adjustment of increases in survivors' pensions

137

• (1) Section 59 of the Social Security Pensions Act 1975 (c. 60) (increase of official pensions) is amended as follows.

• (2) Subsection (5ZA) is amended as follows.

• (3) In the words before paragraph (a)—

• (a) for “or widower's” substitute “ , widower's or surviving civil partner's ”;

• (b) after “spouse” insert “ or civil partner ”.

• (4) In paragraph (a), after “spouse” insert “ or civil partner ”.

• (5) In paragraph (b)—

• (a) after “period” insert “ (“the relevant time”) ”;

• (b) for the words from “one half” to the end substitute “ the rate provided for in subsection (5ZB); ”.

• (6) In paragraph (c), for “or widower's” substitute “ , widower's or surviving civil partner's ”.

• (7) Omit the words from “but this subsection” to the end.

• (8) After subsection (5ZA) insert—

(5ZB) The rate referred to in subsection (5ZA)(b) is— (a) in the case of a widow's pension, one half of the rate of the deceased husband's guaranteed minimum pension at the relevant time; (b) in the case of a widower's pension, one half of so much of the rate of the deceased wife's guaranteed minimum pension at the relevant time as is attributable to earnings factors for the tax year 1988-89 and subsequent tax years; (c) in the case of a surviving civil partner's pension, one half of so much of the rate of the deceased civil partner's guaranteed minimum pension at the relevant time as is attributable to earnings factors for the tax year 1988-89 and subsequent tax years. (5ZC) Subsection (5ZA)— (a) does not apply to a widow's or widower's pension in respect of any service of the deceased spouse if the deceased spouse's pension in respect of that service became payable before 24 July 1990; (b) applies to a surviving civil partner's pension only in respect of amounts payable after the coming into force of this subsection.

War pensions: effect of later marriage or civil partnership

138

• (1) Section 168 of the Pensions Act 1995 (c. 26) (war pensions for widows: effect of remarriage) is amended as follows.

• (2) For subsection (1) substitute—

(1) In determining whether a pension is payable to a person as a widow, widower or surviving civil partner under any of the enactments mentioned in subsection (3) in respect of any period beginning on or after the commencement date, no account may be taken of the fact that the person has married or formed a civil partnership with another person if, before the beginning of that period— (a) the marriage or civil partnership has been terminated, (b) the parties to it have been judicially separated, or (c) in the case of a civil partnership, a separation order has been made in respect of the parties. (1A) The commencement date is— (a) for the purpose of determining whether a pension is payable to a person as a widow or widower, 19 July 1995; (b) for the purpose of determining whether a pension is payable to a person as a surviving civil partner, 5 December 2005.

• (3) In subsection (2), in paragraph (a)—

• (a) after “a marriage” insert “ or civil partnership ”;

• (b) for “the termination of the marriage” substitute “ its termination ”.

• (4) In that subsection, after “divorce” insert “ , dissolution ”.

• (5) In subsection (3)(a), for “The Naval, Military and Air Forces Etc. (Disablement and Death) Service Pensions Order 1983” substitute “ The Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 2006 ”.

Polish Resettlement Act 1947: effect of residence in Poland

139

• (1) In section 1(3) of the Polish Resettlement Act 1947 (c. 19) (power to apply Royal Warrant as to pensions etc to certain Polish forces) for “, and the scheme shall contain provision for securing that no payment shall be made thereunder to or in respect of any person as to whom the Secretary of State is satisfied that he is resident in Poland” substitute “ (including exceptions applying by virtue of a person's residence in Poland at any time prior to 1 May 2004) ”.

• (2) Subsection (3) below applies where—

• (a) a person (“A”) was resident in Poland at any time in the relevant period, and

• (b) but for that fact, an amount would have been payable to or in respect of A under the scheme made under section 1 of the Polish Resettlement Act 1947.

• (3) The power to make the scheme includes power to make provision for payments to or in respect of A in relation to any part of the relevant period.

• (4) In this section “the relevant period” means the period beginning with 1 May 2004 and ending with the coming into force of this section.

Pre-1948 insurance affecting German pension entitlement

140

• (1) This section applies where the conditions in subsections (2) and (3) are satisfied.

• (2) The first condition is satisfied if it appears to the Secretary of State that a person (the “pensioner”) is, or was immediately before death, a person—

• (a) whose German pension entitlement is (or was) reduced by one or more periods of pre-1948 insurance, or

• (b) who would have (or would have had) a German pension entitlement, but for one or more periods of pre-1948 insurance.

• (3) The second condition is satisfied if—

• (a) the insured person entered the United Kingdom as an unaccompanied child directly or indirectly from Germany, Austria, Czechoslovakia or Poland in the period beginning with 2 December 1938 and ending with 31 May 1940, or

• (b) the Secretary of State otherwise considers it appropriate to give a direction under subsection (4).

• (4) At the request of the pensioner or (where the pensioner is dead) any other person claiming to be affected, the Secretary of State may direct that, on the giving of the direction, subsection (5) takes effect in relation to the period or periods of pre-1948 insurance.

• (5) On this subsection taking effect in relation to any period—

• (a) the insured person is deemed not to have been, not to have been deemed to be, and not to have been treated as being, insured for that period under the Widows', Orphans' and Old Age Contributory Pensions Acts 1936 to 1941 or under any provision of Northern Ireland legislation corresponding to those Acts, and

• (b) any contribution mentioned in section 141(2)(b) or (c) is deemed not to have been credited to the insured person.

• (6) The Secretary of State may give directions specifying how any request for the purposes of subsection (4) must be made.

• (7) Where subsection (5) has taken effect in relation to a period or periods of pre-1948 insurance, the relevant authority may pay to any person an amount not exceeding any amount that would, but for subsection (5), have been payable to that person in respect of—

• (a) a benefit specified in section 20(1) of the Social Security Contributions and Benefits Act 1992 (c. 4) (contributory benefits), or

• (b) a benefit specified in any provision of Northern Ireland legislation corresponding to that provision.

• (8) In this section—

• “child” means a person aged under 18;

• “German pension entitlement” means entitlement to benefits arising under insurance with the Deutsche Rentenversicherung, or any other entitlement that appears to the Secretary of State to be relevant for the purposes of this section;

• “insured person” is to be read in accordance with section 141;

• the “relevant authority” means—in relation to a benefit within subsection (7)(b), the Department for Social Development in Northern Ireland;in any other case, the Secretary of State;

• “unaccompanied” means unaccompanied by an adult family member.

Pre-1948 insurance: supplementary

141

• (1) In section 140 a “period of pre-1948 insurance” means any period ending before 6 April 1948 to which subsection (2) applies by reference to any person (“the insured person”).

• (2) This subsection applies to a period which is one of the following—

• (a) a period for which the insured person at any time was, was deemed to be, or was treated as, insured under the Widows', Orphans' and Old Age Contributory Pensions Acts 1936 to 1941, or under any provision of Northern Ireland legislation corresponding to those Acts;

• (b) a period for or in respect of which contributions of any class were credited to the insured person in accordance with the provisions of the National Insurance Act 1965 (c. 51) or regulations made under that Act, or in accordance with any provision of Northern Ireland legislation corresponding to that Act or such regulations;

• (c) a period for which contributions are credited to the insured person by any provision of the Social Security (Widow's Benefit, Retirement Pensions and Other Benefits) (Transitional) Regulations 1979 (S.I. 1979/643), or by any provision of Northern Ireland legislation corresponding to a provision of those regulations.

Information relating to state pension credit recipients

Disclosure of information relating to state pension credit recipients

142

• (1) The Secretary of State may by regulations make provision authorising the Secretary of State, or a person providing services to the Secretary of State, to supply relevant persons with social security information about persons in receipt of state pension credit.

• (2) In this section “relevant person” means—

• (a) a person who holds a licence under section 6(1)(d) of the Electricity Act 1989 (c. 29) or section 7A(1) of the Gas Act 1986 (c. 44) (supply of electricity or gas to premises), or

• (b) a person providing services to the Secretary of State or to a person within paragraph (a).

• (3) Regulations under this section must specify the purposes for which information may be supplied by virtue of subsection (1), which must be purposes in connection with enabling the provision of assistance to persons in receipt of state pension credit.

• (4) Regulations under this section may authorise the supply of information by a relevant person to the Secretary of State or another relevant person—

• (a) for the purpose of determining what information is to be supplied by virtue of subsection (1), or

• (b) to enable information supplied to a relevant person by virtue of subsection (1) to be used by that or another relevant person for purposes within subsection (3).

• (5) Regulations under this section may—

• (a) make provision as to the use or disclosure of information supplied under the regulations (including provision creating criminal offences);

• (b) provide for the recovery by the Secretary of State of costs incurred in connection with the supply or use of information under the regulations.

• (6) In this section—

• “social security information” means information held by or on behalf of the Secretary of State and obtained as a result of, or for the purpose of, the exercise of the Secretary of State's functions in relation to social security;

• “state pension credit” has the meaning given by section 1(1) of the State Pension Credit Act 2002 (c. 16).

Part 6 — General

Orders and regulations

143

• (1) Any power conferred on the Secretary of State to make an order or regulations under this Act is exercisable by statutory instrument.

• (2) A statutory instrument containing such an order or regulations is subject to annulment in pursuance of a resolution of either House of Parliament.

• (3) Subsection (2) does not apply to a statutory instrument containing an order under section 149 or to a statutory instrument to which subsection (4) applies.

• (4) A statutory instrument to which this subsection applies may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

• (5) Subsection (4) applies to a statutory instrument containing (alone or with other provision)—

• (a) regulations under section 16(3)(c), 17(1)(c), 28, 96, 98 or 142;

• (b) the first regulations under section 3(2) or (6), 5(2) or (7), 7(4)(b) or (6) or 9(3)(b);

• (c) an order under section 14(2), 28(9), 67 or 70(4);

• (d) an order under section 145 amending or repealing any provision of an Act;

• (e) an order under paragraph 9(7) of Schedule 5.

Orders and regulations: supplementary

144

• (1) This section applies to an order or regulations made by the Secretary of State under this Act.

• (2) An order or regulations may include—

• (a) such incidental, supplemental, consequential or transitional provision as appears to the Secretary of State to be expedient;

• (b) provision conferring a discretion on any person.

• (3) An order under section 67 may include provision for anything that may be prescribed by the order to be determined under it, and for anything falling to be so determined to be determined by such persons, in accordance with such procedure and by reference to such matters, and to the opinion of such persons, as may be prescribed.

• (4) The power to make an order or regulations may be exercised—

• (a) either in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified cases or classes of case,

• (b) so as to make, as respects the cases in relation to which it is exercised—

• (i) the full provision to which the power extends or any less provision (whether by way of exception or otherwise),

• (ii) the same provision for all cases in relation to which the power is exercised, or different provision for different cases or different classes of case or different provision as respects the same case or class of case for different purposes of this Act, or

• (iii) any such provision either unconditionally or subject to any specified condition.

Power to make further provision

145

• (1) The Secretary of State may by order make—

• (a) such supplemental, incidental or consequential provision, or

• (b) such transitory, transitional or saving provision,

as the Secretary of State thinks appropriate for the general purposes, or any particular purpose, of this Act or in consequence of any provision made by or under this Act or for giving full effect to this Act or any such provision.

• (2) An order under this section may, for purposes of or in consequence of or for giving full effect to any provision of or made under Chapter 5 of Part 1 or section 106, make provision for applying (with or without modifications) or amending, repealing or revoking any provision of or made under an Act passed before this Act or in the same Session.

• (3) Amendments made under this section are in addition, and without prejudice, to those made by or under any other provision of this Act.

• (4) No other provision of this Act restricts the powers conferred by this section.

Pre-consolidation amendments

146

• (1) The Secretary of State may by order make such modifications of enactments within subsection (2) as in the Secretary of State's opinion facilitate, or are otherwise desirable in connection with, the consolidation of any of those enactments.

• (2) The enactments are—

• (a) the Pension Schemes Act 1993 (c. 48);

• (b) the Pensions Act 1995 (c. 26);

• (c) Parts 1 to 4 of the Welfare Reform and Pensions Act 1999 (c. 30);

• (d) Chapter 2 of Part 2 of the Child Support, Pensions and Social Security Act 2000 (c. 19);

• (e) the Pensions Act 2004 (c. 35);

• (f) the Pensions Act 2007 (c. 22);

• (g) this Act;

• (h) enactments referring to any enactment within paragraphs (a) to (g).

• (3) No order may be made under this section unless a Bill for consolidating the enactments modified by the order (with or without other enactments) has been presented to either House of Parliament.

• (4) An order under this section, so far as it modifies any enactment, is not to come into force except in accordance with provision made for the purpose by the Act resulting from that Bill.

• (5) An order under this section must not make any provision which would, if it were included in an Act of the Scottish Parliament, be within the legislative competence of that Parliament.

General financial provisions

147

There is to be paid out of money provided by Parliament—

• (a) any expenditure incurred by the Secretary of State or a government department in consequence of this Act, and

• (b) any increase attributable to this Act in the sums payable out of money so provided under any other enactment.

Repeals

148

Schedule 11 (repeals) has effect.

Commencement

149

• (1) Subject to the following provisions, this Act comes into force in accordance with provision made by order by the Secretary of State.

• (2) Subsection (1) does not apply to—

• (a) sections 67 to 73;

• (b) sections 78 to 86;

• (c) section 105;

• (d) section 124(1), (3) and (7) to (10);

• (e) section 125;

• (f) section 131;

• (g) sections 133 to 136;

• (h) sections 140 to 142;

• (i) this Part, except section 148 and Schedule 11 (subject to paragraph (j));

• (j) the provisions mentioned in subsection (3);

• (k) any other provision of this Act so far as it confers any power to make regulations, rules, an Order in Council or an order under this Act.

• (3) The provisions mentioned in this subsection are—

• (a) in Schedule 9—

• (i) paragraph 1 so far as relating to any of the following paragraphs;

• (ii) paragraph 3 (and paragraph 2 so far as necessary for the purposes of that paragraph);

• (iii) paragraphs 5 to 7;

• (iv) paragraph 8 for purposes other than those of the material detriment test;

• (v) paragraphs 9 to 14;

• (vi) in paragraph 15, sub-paragraph (1) so far as relating to paragraphs 6 and 7, sub-paragraph (2) for purposes other than those of the material detriment test, and sub-paragraphs (3) and (4);

• (vii) paragraph 16;

• (b) section 126 so far as relating to any of the paragraphs of that Schedule mentioned in paragraph (a) of this subsection;

• (c) the repeal in Schedule 11 relating to section 38(5)(a)(ii) of the Pensions Act 2004 (c. 35), the note in that Schedule relating to that repeal and section 148 so far as relating to that repeal and that note.

• (4) Sections 105, 135 and 136 come into force on 6 April 2009.

• (5) Section 131 comes into force at the end of the period of 2 months beginning with the day on which this Act is passed.

• (6) An order under subsection (1) may appoint different days for different purposes.

Extent

150

• (1) Subject to the following provisions, this Act extends to England and Wales and Scotland.

• (2) The following provisions extend also to Northern Ireland—

• (a) Chapters 5 and 6 of Part 1 and section 99 so far as it relates to those Chapters;

• (b) section 96(2) to (7);

• (c) section 97;

• (d) section 125(2);

• (e) sections 140 and 141;

• (f) 143, 144, 145 and 146

• (g) section 149, this section and section 151.

• (3) An amendment or repeal by this Act has the same extent as the enactment amended or repealed (subject to the provision made by section 63(3), section 64(2) and paragraph 9 of Schedule 10).

Short title

151

This Act may be cited as the Pensions Act 2008.

SCHEDULE 1

Part 1 — Members and employees

Members

1

• (1) Appointments of members of the corporation, and of a member as chair of the corporation, are to be made—

• (a) by the Secretary of State, if they take effect on the commencement of section 75(1) or in the initial period;

• (b) by the corporation, if they take effect after the initial period.

• (2) Subject to sub-paragraph (3), the Secretary of State must consult the chair of the corporation before appointing an ordinary member (that is, a member who is not, on appointment, also appointed as chair).

• (3) A vacancy in the office of chair does not prevent the appointment of an ordinary member.

• (4) The Secretary of State and the corporation must aim to ensure that, from the end of the initial period, there are not fewer than 9 and not more than 15 members at any time.

• (5) It is for the Secretary of State to determine the length of the initial period.

• (6) An order under section 67 may provide for section 242 of the Pensions Act 2004 (c. 35) (member-nominated directors of corporate trustees) to apply to the members of the corporation as it applies to the directors of a company, subject to any modifications specified in the order.

Conflicts of interest

2

• (1) The Secretary of State and, under paragraph 1(1)(b), the corporation must satisfy themselves that a person to be appointed as a member does not have a conflict of interest.

• (2) The Secretary of State and the corporation must also satisfy themselves from time to time that none of the members has a conflict of interest.

• (3) A member of the corporation, or a person the Secretary of State or the corporation proposes to appoint as a member, must provide the Secretary of State on request with any information the Secretary of State considers necessary for the purposes of sub-paragraph (1) or (2).

• (4) A member of the corporation, or a person the corporation proposes to appoint as a member, must provide the corporation on request with any information the corporation considers necessary for the purposes of sub-paragraph (1) or (2).

• (5) In this paragraph and paragraph 3 “conflict of interest”, in relation to a person, means a financial or other interest which is likely to affect prejudicially that person's discharge of functions as a member of the trustee corporation.

• (6) But for the purposes of this paragraph and paragraph 3 a person is not to be taken to have a conflict of interest for these reasons alone—

• (a) being or having previously been engaged, on behalf of the relevant authority, in activities connected with the discharge of the authority's functions relating to occupational pension schemes or personal pension schemes;

• (b) having previously been a trustee or manager of such a scheme or an employee of such a trustee or manager.

Disqualification and removal

3

• (1) A person is disqualified for appointment as a member if—

• (a) prohibited by an order under section 3 of the Pensions Act 1995 (c. 26) or Article 3 of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) from being a trustee of trust schemes in general, or

• (b) suspended by an order under section 4 of that Act or Article 4 of that Order as a trustee of any scheme.

• (2) While the trustee corporation is a trustee of a scheme established under section 67, section 3 of that Act applies in relation to being a member of the trustee corporation as it applies in relation to being a trustee of the scheme.

• (3) The Pensions Regulator may also make an order under section 3 of that Act as applied by sub-paragraph (2) at any time when it would have power to make an order under section 4 of that Act (suspension) if the person were a trustee of the scheme.

4

• (1) A person is disqualified for appointment as a member if disqualified under section 29 of the Pensions Act 1995 or Article 29 of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) for being a trustee of a trust scheme.

• (2) A person is not disqualified under this paragraph if the Pensions Regulator has given the person a general waiver under section 29(5) of that Act or Article 29(5) of that Order.

• (3) The Pensions Regulator may, on the application of a person disqualified under this paragraph, give the person notice in writing waiving the disqualification.

• (4) A member who becomes disqualified under sub-paragraph (1) ceases to be a member.

5

The Secretary of State may remove a member from office if satisfied that the member—

• (a) has a conflict of interest,

• (b) is unfit for office by reason of misconduct,

• (c) has failed to comply with the terms of appointment,

• (d) has without reasonable excuse failed to discharge the functions of the office, or

• (e) is otherwise incapable of discharging, or unfit or unwilling to discharge, the functions of the office.

Tenure of office

6

• (1) A person holds and vacates office as a member or as chair in accordance with the terms of the appointment (subject to this Schedule).

• (2) A person's appointment as a member or as chair must state the period for which the appointment is made.

• (3) The period must not be more than five years.

• (4) At the end of the period the person is eligible for re-appointment, but may not be re-appointed more than once.

• (5) A person may resign as a member by notice in writing to the chair.

• (6) A person may resign as chair by notice in writing to the Secretary of State.

• (7) A person's appointment as chair ceases if the person ceases to be a member.

Remuneration etc

7

• (1) The trustee corporation may—

• (a) pay to the members such remuneration, and

• (b) pay to or in respect of them such sums by way of or in respect of allowances and gratuities,

as the Secretary of State may determine.

• (2) Where—

• (a) a person whose term of office as member or chair has not expired ceases to hold that office, and

• (b) the Secretary of State thinks there are special circumstances that make it right for the person to receive compensation,

the trustee corporation may make a payment to the person of such amount as the Secretary of State may determine.

Staff

8

• (1) The trustee corporation may appoint employees and make any other arrangements for its staffing that it thinks fit.

• (2) Employees are appointed and hold their employment on terms and conditions, including remuneration, determined by the trustee corporation.

• (3) The trustee corporation must—

• (a) pay to or in respect of employees such pensions, allowances or gratuities as it may determine, or

• (b) provide and maintain for them such pension schemes (whether contributory or not) as it may determine.

Part 2 — Proceedings etc

Committees and advisory committees

9

• (1) The trustee corporation may—

• (a) establish a committee for the purpose of discharging any of its functions;

• (b) establish a committee for the purpose of giving the corporation advice about matters relating to the discharge of its functions.

• (2) A committee may include persons (including persons constituting a majority, but not the whole, of the committee) who are neither members nor employees of the trustee corporation.

• (3) Where a person who is neither a member nor an employee of the trustee corporation is a member of a committee, the trustee corporation may pay to that person such remuneration and expenses as it may determine.

10

• (1) A committee of the trustee corporation may establish a sub-committee.

• (2) Every member of a sub-committee must be a member of the committee which established it.

Proceedings

11

• (1) The trustee corporation may, subject to this Schedule—

• (a) regulate its own procedure;

• (b) regulate the procedure of its committees or sub-committees;

• (c) enable committees or sub-committees to regulate their own procedure subject to any provision made by the corporation.

• (2) The trustee corporation must publish, in such manner as it thinks fit, its own procedures and those of its committees and sub-committees.

• (3) This paragraph has effect subject to paragraph 13 (disqualification for acting in relation to certain matters).

12

The trustee corporation must make arrangements for the keeping of proper records—

• (a) of its proceedings,

• (b) of the proceedings of its committees and sub-committees,

• (c) of anything done by an employee or member of the corporation under paragraph 14(a) or (b) (delegation to member or employee).

Disqualification for acting in relation to certain matters

13

• (1) This paragraph applies if at any meeting of—

• (a) the trustee corporation, or

• (b) any committee or sub-committee,

a member of the trustee corporation or, as the case may be, of the committee or sub-committee has a direct or indirect interest in any matter falling to be considered at the meeting.

• (2) The person with the interest must declare it and the declaration must be recorded in the minutes of the meeting.

• (3) The person with the interest may not take part in any discussion or decision relating to the matter in which he has an interest, unless—

• (a) in the case of a meeting of the trustee corporation the other members who are present when the discussion or decision falls to take place or is made have resolved unanimously that the interest is to be disregarded, or

• (b) in the case of a meeting of a committee or sub-committee, the other members of the committee or sub-committee who are present when the discussion or decision falls to take place or is made have resolved in the manner authorised by the trustee corporation that the interest is to be disregarded.

• (4) In granting authorisations for the purposes of sub-paragraph (3)(b), the trustee corporation must secure that a resolution for those purposes does not allow a person to take part in a discussion or decision at a meeting of a committee established by virtue of paragraph 9(1)(a) or of a sub-committee of such a committee unless at least the following requirements are met—

• (a) the number of other members of the committee or sub-committee in favour of the resolution is not less than two-thirds of those who are both present and entitled to vote on the resolution, and

• (b) the number of other members of the committee or sub-committee in favour of the resolution is not less than its quorum.

• (5) For the purposes of this paragraph a general notification given at or sent to a relevant meeting that—

• (a) a person—

• (i) has an interest (as member, officer, employee or otherwise) in a specified body corporate or firm, or

• (ii) is connected with a specified person (other than a body corporate or firm), and

• (b) the person is to be regarded as interested in any matter involving that body corporate or firm or, as the case may be, person,

is to be regarded as compliance with sub-paragraph (2) in relation to any such matter for the purposes of that meeting and any subsequent relevant meeting of the same type which is held while the notification is in force.

• (6) Section 252 of the Companies Act 2006 (c. 46) (persons connected with a director) applies for determining whether a person is connected with another person for the purposes of sub-paragraph (5) as it applies for determining whether a person is connected with a director of a company.

• (7) A notification for the purposes of sub-paragraph (5) remains in force until it is withdrawn.

• (8) For the purposes of sub-paragraph (5) each of the following is a “relevant meeting”—

• (a) a meeting of the trustee corporation,

• (b) a meeting of a committee,

• (c) a meeting of a sub-committee,

and a relevant meeting is of the same type as another relevant meeting if both meetings are relevant meetings by virtue of falling within the same paragraph of this sub-paragraph.

• (9) A person required to make a declaration for the purposes of this paragraph in relation to any meeting—

• (a) is not required to attend the meeting, but

• (b) is to be taken to have complied with the requirements of this paragraph if he takes reasonable steps to secure that notice of his interest is read out at, and taken into consideration at, the meeting.

• (10) For the purposes of this paragraph a person is not to be taken to have an interest in any matter for these reasons only—

• (a) being or having previously been engaged, on behalf of the relevant authority, in activities connected with the discharge of the authority's functions relating to occupational pension schemes or personal pension schemes, or

• (b) having previously been a trustee or manager of such a scheme or an employee of such a trustee or manager.

Delegation

14

The trustee corporation may, subject to an order or rules under section 67, delegate any function conferred on it to—

• (a) a member,

• (b) an employee or other member of staff, or

• (c) a committee.

Validity of proceedings

15

The validity of proceedings of the trustee corporation, a committee or a sub-committee is not affected by a vacancy among the members or a defect in appointment.

Authentication of the trustee corporation’s seal

16

• (1) The application of the trustee corporation's seal must be authenticated by the signature of—

• (a) a member, or

• (b) any other person authorised by the trustee corporation (whether generally or specially) for the purpose.

• (2) A document purporting to be duly executed under the seal of the trustee corporation, or to be signed on behalf of the trustee corporation, is to be received in evidence and, except to the extent that the contrary is shown, taken to be duly so executed or signed.

• (3) This paragraph does not apply to Scotland.

Annual report

17

• (1) As soon as is reasonably practicable after the end of each financial year, the trustee corporation must send to the Secretary of State a report on the exercise of the trustee corporation's functions during that year.

• (2) The report must include—

• (a) a report on the trustee corporation's proceedings during the year, and

• (b) any information the Secretary of State directs, relating to the financial position of the trustee corporation or any other matter.

• (3) The Secretary of State must lay before Parliament a copy of each report received under this paragraph.

Part 3 — Money

Finance

18

• (1) The Secretary of State may, with the consent of the Treasury, give financial assistance to the trustee corporation.

• (2) The assistance—

• (a) may take the form of grants, loans, guarantees or indemnities;

• (b) may be given on conditions;

• (c) in the case of a loan, must be given on a condition requiring the loan to be repaid with interest at a rate approved by the Treasury.

• (3) Section 5 of the National Loans Act 1968 (c. 13) (rates of interest on certain loans out of the National Loans Fund) has effect as respects the rate of interest on a loan under this paragraph as it has effect as respects a rate of interest within subsection (1) of that section.

19

The trustee corporation may make charges in connection with the exercise of its functions.

Accounts

20

• (1) The trustee corporation must—

• (a) keep proper accounting records, and

• (b) prepare a statement of accounts in respect of each financial year.

• (2) A statement under sub-paragraph (1)(b) must be prepared by the trustee corporation in such form as the Secretary of State may direct.

• (3) The trustee corporation must send a copy of a statement under sub-paragraph (1)(b)—

• (a) to the Secretary of State, and

• (b) to the Comptroller and Auditor General.

• (4) A copy of a statement must be sent under sub-paragraph (3) within such period, beginning with the end of the financial year to which the statement relates, as the Secretary of State may direct.

• (5) The Comptroller and Auditor General must—

• (a) examine, certify and report on a statement received under this paragraph, and

• (b) send a copy of the certified statement and of the report on it to the Secretary of State as soon as possible.

• (6) The Secretary of State must lay before Parliament a copy of the statement and report sent under sub-paragraph (5)(b).

Part 4 — Supplementary

Disqualification

21

In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975 (c. 24) (bodies of which all members are disqualified), insert at the appropriate place— “ The trustee corporation established by section 75 of the Pensions Act 2008. ”

22

In Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (c. 25) (bodies of which all members are disqualified), insert at the appropriate place— “ The trustee corporation established by section 75 of the Pensions Act 2008. ”

Records and freedom of information

23

In Schedule 1 to the Public Records Act 1958 (c. 51) (definition of public records), in paragraph 3, insert at the appropriate place in Part 2 of the Table (other establishments and organisations)— “ The trustee corporation established by section 75 of the Pensions Act 2008. ”

24

In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (c. 36) (public authorities: miscellaneous), insert at the appropriate place— “ The trustee corporation established by section 75 of the Pensions Act 2008. ”

Equality

25

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

Interpretation

26

• (1) In this Schedule—

• “financial year” means such period as the Secretary of State may by order prescribe;

• “occupational pension scheme” and “personal pension scheme”—in relation to England and Wales or Scotland, have the same meanings as in the Pension Schemes Act 1993 (c. 48) (see section 1 of that Act);in relation to Northern Ireland, have the same meanings as in the Pension Schemes (Northern Ireland) Act 1993 (c. 49) (see section 1 of that Act);

• “the relevant authority” means—in relation to England and Wales or Scotland, the Secretary of State;in relation to Northern Ireland, the Department for Social Development in Northern Ireland.

• (2) In this Schedule references to the relevant authority's functions relating to occupational pension schemes or personal pension schemes include such functions conferred at any time after the passing of this Act.

SCHEDULE 2

Part 1 — Revaluation of accrued pension benefits

Amendments to Schedule 3 to the 1993 Act

1

This Part makes amendments to Schedule 3 to the Pension Schemes Act 1993 (c. 48) (methods of revaluing accrued pension benefits).

2

In paragraph 1 (the final salary method), for sub-paragraphs (1) to (3) substitute—

(1) The final salary method is to add to the amount that would be payable but for Chapter 2 of Part 4, or regulations made under it, the additional amount specified in sub-paragraph (1A), (1B), (1C) or (1D) (whichever applies). (1A) Where— (a) the termination of pensionable service occurs before 1st January 1991, and (b) the whole of the member's pensionable service falls on or after 1st January 1985, the additional amount is the appropriate higher revaluation percentage of the accrued benefit. (1B) Where— (a) the termination of pensionable service occurs before 1st January 1991, and (b) some of the member's pensionable service falls before 1st January 1985, the additional amount is such proportion of the appropriate higher revaluation percentage of the accrued benefit as the member's pensionable service falling on or after 1st January 1985 bears to the member's total pensionable service. (1C) Where the termination of pensionable service occurs— (a) on or after 1st January 1991, but (b) before the day on which section 101 of the Pensions Act 2008 comes into force (“the 2008 Act commencement day”), the additional amount is the appropriate higher revaluation percentage of the accrued benefit. (1D) Where the termination of pensionable service occurs on or after the 2008 Act commencement day, the additional amount is the aggregate of— (a) the appropriate higher revaluation percentage of so much of the accrued benefit as is attributable to the member's pensionable service falling before the 2008 Act commencement day, and (b) the appropriate lower revaluation percentage of so much of the accrued benefit as is attributable to the member's pensionable service falling on or after that day. (1E) In this paragraph “the accrued benefit” means the amount of the pension or other benefit which on the termination date has accrued to the member or to any other person in respect of the member (excluding any part of that amount which consists of— (a) the member's guaranteed minimum, or (b) the guaranteed minimum of the member's widow, widower or surviving civil partner). (2) For the purposes of this paragraph, a member's pensionable service includes any notional pensionable service which is credited to the member by the scheme (“notional service”). But notional service shall not be taken into account in determining which of sub-paragraphs (1A), (1B), (1C) and (1D) applies. (3) For the purposes of determining the additional amount where sub-paragraph (1B) applies, any notional service shall be taken to have ended immediately before the member's actual pensionable service began. (3A) For the purposes of determining the additional amount where sub-paragraph (1D) applies, any notional service shall be treated as falling on or after the 2008 Act commencement day only if, or to the extent that, it is so treated for the purposes of the scheme.

3

• (1) Paragraph 2 (the revaluation percentage and the appropriate revaluation percentage) is amended as follows.

• (2) In sub-paragraph (1), for “specify a revaluation percentage for each period” substitute

specify (so far as it is necessary to do so)— (a) a higher revaluation percentage, and (b) a lower revaluation percentage, for each period

.

• (3) For sub-paragraph (3) substitute—

(3) The higher revaluation percentage which the Secretary of State is to specify in relation to a revaluation period is the lesser of— (a) the percentage which appears to the Secretary of State to be the percentage increase in the general level of prices in Great Britain during the period which is the reference period in relation to the revaluation period (“the inflation percentage”), and (b) the higher maximum rate. (3A) The lower revaluation percentage which the Secretary of State is to specify in relation to a revaluation period is the lesser of— (a) the percentage which appears to the Secretary of State to be the inflation percentage, and (b) the lower maximum rate.

• (4) For sub-paragraphs (6) and (7) substitute—

(6) For the purposes of sub-paragraph (3)(b) and (3A)(b)— - “the higher maximum rate”, in relation to a revaluation period, is— 1. in the case of a revaluation period of 12 months, 5 per cent; and 2. in any other case, the percentage that would be the inflation percentage had the general level of prices increased at the rate of 5 per cent compound per annum during the reference period in question; - “the lower maximum rate”, in relation to a revaluation period, is— 1. in the case of a revaluation period of 12 months, 2.5 per cent; and 2. in any other case, the percentage that would be the inflation percentage had the general level of prices increased at the rate of 2.5 per cent compound per annum during the reference period in question. (7) In paragraph 1— - “the appropriate higher revaluation percentage” means the higher revaluation percentage specified in the last calendar year before the date on which the member attains normal pension age as the higher revaluation percentage for the revaluation period which is of the same length as the number of complete years in the pre-pension period; - “the appropriate lower revaluation percentage” has a corresponding meaning.

Part 2 — Revaluation of accrued amounts etc

Amendments to Schedule 7 to the 2004 Act

4

This Part makes amendments to Schedule 7 to the Pensions Act 2004 (c. 35) (pension compensation provisions).

5

• (1) Paragraph 12 (active members who have not attained normal pension age at assessment date: the revaluation amount for the revaluation period) is amended as follows.

• (2) In sub-paragraph (3), for paragraph (b) substitute—

(b) in any other case, the aggregate of— (i) the higher revaluation percentage of so much of the accrued amount as is attributable to the active member's pensionable service falling before the day on which section 101 of the Pensions Act 2008 comes into force (“the 2008 Act commencement day”), and (ii) the lower revaluation percentage of so much of the accrued amount as is attributable to the active member's pensionable service falling on or after that day.

• (3) After sub-paragraph (3) insert—

(3A) For the purposes of sub-paragraph (3)(b)— (a) any service within paragraph 36(4)(b) (notional pensionable service) is to be treated as falling on or after the 2008 Act commencement day if, or to the extent that, it is so treated for the purposes of the scheme; (b) regulations may make provision in relation to cases where it is unclear whether or not any particular pensionable service (either actual or notional) falls, or is to be treated as falling, on or after that day.

• (4) For sub-paragraphs (4) and (5) substitute—

(4) In sub-paragraph (3)(b)— - “the higher revaluation percentage” means the lesser of— 1. the percentage increase in the general level of prices in Great Britain during the revaluation period determined in the prescribed manner (“the inflation percentage”), and 2. the higher maximum revaluation rate; - “the lower revaluation percentage” means the lesser of— 1. the inflation percentage, and 2. the lower maximum revaluation rate. (5) For the purposes of sub-paragraph (4)— - “the higher maximum revaluation rate”, in relation to the revaluation period, is— 1. if that period is a period of 12 months, 5%, and 2. in any other case, the percentage that would be the inflation percentage had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period; - “the lower maximum revaluation rate”, in relation to the revaluation period, is— 1. if that period is a period of 12 months, 2.5%, and 2. in any other case, the percentage that would be the inflation percentage had the general level of prices in Great Britain increased at the rate of 2.5% compound per annum during that period. This is subject to paragraph 29 (power of Board to determine maximum revaluation rates etc).

6

• (1) Paragraph 17 (deferred members who have not attained normal pension age at assessment date: the revaluation amount for the second revaluation period) is amended as follows.

• (2) In sub-paragraph (3), for paragraph (b) substitute—

(b) in any other case, the aggregate of— (i) the higher revaluation percentage of so much of the relevant amount as is attributable to the deferred member's pensionable service falling before the day on which section 101 of the Pensions Act 2008 comes into force (“the 2008 Act commencement day”), and (ii) the lower revaluation percentage of so much of the relevant amount as is attributable to the deferred member's pensionable service falling on or after that day.

• (3) After sub-paragraph (3) insert—

(3A) For the purposes of sub-paragraph (3)(b)— (a) any service within paragraph 36(4)(b) (notional pensionable service) is to be treated as falling on or after the 2008 Act commencement day if, or to the extent that, it is so treated for the purposes of the scheme; (b) regulations may make provision in relation to cases where it is unclear whether or not any particular pensionable service (either actual or notional) falls, or is to be treated as falling, on or after that day.

• (4) For sub-paragraphs (4) and (5) substitute—

(4) In sub-paragraph (3)— - “the higher revaluation percentage” means the lesser of— 1. the percentage increase in the general level of prices in Great Britain during the revaluation period determined in the prescribed manner (“the inflation percentage”), and 2. the higher maximum revaluation rate; - “the lower revaluation percentage” means the lesser of— 1. the inflation percentage, and 2. the lower maximum revaluation rate; - “the relevant amount” means the aggregate of— 1. the accrued amount, and 2. the revaluation amount for the first revaluation period (see paragraph 16). (5) For the purposes of sub-paragraph (3)— - “the higher maximum revaluation rate”, in relation to the second revaluation period, is— 1. if that period is a period of 12 months, 5%, and 2. in any other case, the percentage that would be the inflation percentage had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period; - “the lower maximum revaluation rate”, in relation to the second revaluation period, is— 1. if that period is a period of 12 months, 2.5%, and 2. in any other case, the percentage that would be the inflation percentage had the general level of prices in Great Britain increased at the rate of 2.5% compound per annum during that period. This is subject to paragraph 29 (power of Board to determine maximum revaluation rates etc).

7

In paragraph 29 (Board's powers to alter rates of revaluation etc), for sub-paragraph (1) substitute—

(1) The Board may determine what is to be the higher maximum revaluation rate or the lower maximum revaluation rate for the purposes of paragraphs 12(4) and 17(4), and where it does so the relevant definitions in paragraphs 12(5) and 17(5) do not apply.

Part 3 — Consequential amendments

8

• (1) Section 51ZA of the Pensions Act 1995 (c. 26) (meaning of “the appropriate percentage”) is amended as follows.

• (2) In subsection (1)—

• (a) in paragraph (a), for “revaluation percentage” substitute “ higher revaluation percentage ”;

• (b) for paragraph (b) substitute—

(b) in the case of a category Y pension, means the lower revaluation percentage for that period.

• (3) In subsection (2), for “ “the revaluation percentage”” substitute “ “ “the higher revaluation percentage”, “the lower revaluation percentage” ”.

SCHEDULE 3

After Schedule 4B to the Social Security Contributions and Benefits Act 1992 (c. 4) insert—

SCHEDULE 4

Social Security Contributions and Benefits Act 1992 (c. 4)

1

The Social Security Contributions and Benefits Act 1992 is amended as follows.

2

In section 21(5A)(c) (contribution conditions), after “5(2)(b) and (4)(a)” insert “ , 5A(3)(a) ”.

3

In section 39(1) (rate of widowed mother's allowance and widow's pension), for “46(2)” substitute “ 46 ”.

4

• (1) Section 39C (rate of widowed parent's allowance and bereavement allowance) is amended as follows.

• (2) In subsection (1)—

• (a) for “45” substitute “ 45AA ”;

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

• (c) for “46(2) and (4)” substitute “ 46 ”.

• (3) In subsections (3) and (4)—

• (a) for “45” substitute “ 45AA ”;

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

5

• (1) After section 45 (additional pension in Category A retirement pension) insert—

(45AA) (1) For the purposes of calculating additional pension under sections 44 and 45 where, in the case of any relevant year, working families' tax credit is paid in respect of any employed earner, or disabled person's tax credit is paid to any employed earner, section 44(6)(a)(i) shall have effect as if— (a) where that person had earnings of not less than the qualifying earnings factor for that year, being earnings upon which primary class 1 contributions were paid or treated as paid (“qualifying earnings”) in respect of that year, the amount of those qualifying earnings were increased by the aggregate amount (“AG”) of working families' tax credit, or, as the case may be, disabled person's tax credit paid in respect of that year, and (b) in any other case, that person had qualifying earnings in respect of that year and the amount of those qualifying earnings were equal to AG plus the qualifying earnings factor for that year. (2) The reference in subsection (1) to the person in respect of whom working families' tax credit is paid— (a) where it is paid to one of a couple, is a reference to the prescribed member of the couple, and (b) in any other case, is a reference to the person to whom it is paid. (3) A person's qualifying earnings in respect of any year cannot be treated by virtue of subsection (1) as exceeding the upper earnings limit for that year multiplied by 53. (4) Subsection (1) does not apply to any woman who has made, or is treated as having made, an election under regulations under section 19(4), which has not been revoked, that her liability in respect of primary Class 1 contributions shall be at a reduced rate. (5) In this section— - “couple” has the same meaning as in Part 7 (see section 137); - “relevant year” has the same meaning as in section 44.

• (2) Sub-paragraph (1), together with paragraphs 4(2)(a) and (3)(a), 9(2)(a) and (3)(a) and 11 (which make amendments consequential on sub-paragraph (1)), are referred to in the following provisions of this paragraph as “the relevant provisions”.

• (3) Subject to sub-paragraphs (4) and (5), the relevant provisions apply to a person (“the pensioner”) who attains pensionable age after 5 April 1999 and, in relation to such a person—

• (a) have effect for 1995-96 and subsequent tax years, and

• (b) are deemed so to have had effect (with the necessary modifications) during the period—

• (i) beginning with 6 April 2003, and

• (ii) ending with the coming into force of this paragraph.

• (4) Where the pensioner is a woman, the relevant provisions have 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 (c. 4) 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 5 April 1999, and

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

• (5) The relevant provisions have 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 48A or 48B(2) of that Act (other Category B retirement pension) if—

• (a) the pensioner attains pensionable age after 5 April 1999, and

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

6

• (1) Section 46 (modifications of section 45 for calculating the additional pension in certain benefits) is amended as follows.

• (2) In subsection (2), for “, 48B(2) or 48BB(5)” substitute “ or 48B(2) ”.

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

7

In section 48A(4) (category B retirement pension for married person)—

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

• (b) for “46(2)” substitute “ 46 ”.

8

In section 48B(2) (category B retirement pension for widows and widowers)—

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

• (b) for “46(2)” substitute “ 46 ”.

9

• (1) Section 48BB (category B retirement pension: entitlement by reference to benefits under section 39A or 39B) is amended as follows.

• (2) In subsection (5)—

• (a) for “45” substitute “ 45AA ”;

• (b) after “45AA” (inserted by paragraph (a) above) insert “ and 45B ”;

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) for “46(3)” substitute “ 46 ”.

• (3) In subsection (6)—

• (a) for “45” substitute “ 45AA ”;

• (b) after “45AA” (inserted by paragraph (a) above) insert “ and 45B ”.

10

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

11

In section 51(2) and (3) (category B retirement pension for widowers), for “45” substitute “ 45AA ”.

12

• (1) Schedule 4B (additional pension: accrual rates for purposes of section 45(2)(d)) is amended as follows.

• (2) In paragraph 2 (application of Part 2 of Schedule)—

• (a) after “if” insert

— (a)

;

• (b) after paragraph (a) (created by virtue of paragraph (a) above) insert

and (b) there is a surplus in the pensioner's earnings factor for the year.

• (3) In paragraph 3 (appropriate amount for year)—

• (a) in paragraph (a), for the words from “there is” to “which” substitute “ the pensioner's earnings factor for the year ”;

• (b) in paragraph (b), for “there is such a surplus which” substitute “ that earnings factor ”.

• (4) In paragraph 5(a), for “surplus” substitute “ earnings factor ”.

• (5) In paragraph 6 (application of Part 3 of Schedule)—

• (a) after “if” insert

— (a)

;

• (b) after paragraph (a) (created by virtue of paragraph (a) above) insert

and (b) there would be a surplus in the pensioner's earnings factor for the year if section 48A of the Pension Schemes Act 1993 did not apply in relation to any tax week falling in the year.

• (6) In paragraph 8(1) (calculation of amount A: assumed surplus not exceeding LET), for the words from “there” to “which” substitute “ the pensioner's assumed earnings factor for the year ”; and, accordingly, in the heading before paragraph 8 for “surplus” substitute “ earnings factor ”.

• (7) In paragraph 9 (calculation of amount A: assumed surplus exceeding LET)—

• (a) in sub-paragraph (1), for the words from “there” to “which” substitute “ the pensioner's assumed earnings factor for the year ”;

• (b) in sub-paragraph (2)(a), for “assumed surplus” substitute “ assumed earnings factor ”,

and accordingly in the heading before paragraph 9 for “surplus” substitute “ earnings factor ”.

• (8) In paragraph 10(1)(a) (amount B), for “assumed surplus” substitute “ pensioner's assumed earnings factor ”.

• (9) In paragraph 12 (interpretation)—

• (a) omit the definition of “assumed surplus”;

• (b) after the definition of “the QEF” insert—

“the pensioner's assumed earnings factor”, in relation to a year, means the earnings factor that the pensioner would have for the year if section 48A(1) of the Pension Schemes Act 1993 did not apply in relation to any tax week falling in the year;

.

13

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

Social Security Administration Act 1992 (c. 5)

14

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

Pension Schemes Act 1993 (c. 48)

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

SCHEDULE 5

Part 1 — Introductory

Introductory

1

This Schedule applies for the purposes of determining the compensation payable to or in respect of a person entitled to compensation on the discharge of a pension compensation credit in accordance with this Chapter.

Interpretation

2

In this Schedule—

• “the initial annual rate of compensation” is the amount determined by the Board under section 116(4);

• “the pension compensation age” of the transferee is the age determined in accordance with paragraph 3.

Pension compensation age

3

• (1) This paragraph applies for the purpose of determining the transferee's “pension compensation age”.

• (2) Sub-paragraphs (3) and (4) apply where the transferor's PPF compensation, or any of it, is determined under Schedule 7 to the Pensions Act 2004 (c. 35).

• (3) Where the transferor's right to PPF compensation arises by virtue of his or her status as a member of a pension scheme for which the Board assumed responsibility in accordance with Chapter 3 of Part 2 of that Act, the transferee's pension compensation age is the same as—

• (a) the normal pension age of the transferor, or

• (b) where the transferor was a pension credit member, the normal benefit age of the transferor.

• (4) Where the transferor's right to PPF compensation arises by virtue of his or her status as a person connected with a member of a scheme for which the Board assumed responsibility in accordance with Chapter 3 of Part 2 of that Act, the transferee's pension compensation age is the same as—

• (a) the normal pension age of that member, or

• (b) where that member was a pension credit member, the normal benefit age of that member.

• (5) Sub-paragraph (6) applies where the transferor's PPF compensation is determined only under this Schedule.

• (6) The transferee's pension compensation age is the same as the pension compensation age of the transferor.

• (7) In this paragraph, “normal benefit age”, “normal pension age” and “pension credit member” have the same meanings as in Schedule 7 to the Pensions Act 2004.

Part 2 — Transferee attains pension compensation age before or on transfer day

Compensation payable to transferee

4

• (1) Compensation is payable in accordance with this paragraph where the transferee attains pension compensation age before or on the transfer day.

• (2) The transferee is entitled to periodic compensation commencing on the transfer day and continuing for life.

• (3) The annual rate of the periodic compensation is the aggregate of—

• (a) the initial annual rate of compensation, ...

• (aa) if the commencement of periodic compensation under this paragraph has been postponed for any period by virtue of paragraph 16A, the amount of the actuarial increase under that paragraph, and

• (b) any increases under paragraph 17 (annual increases in periodic compensation).

• (4) This paragraph is subject to paragraph 16A (postponement of compensation) and paragraph 18 (compensation cap).

Compensation payable to widow, widower or surviving civil partner

5

• (1) This paragraph applies where —

• (a) the transferee dies after liability in respect of the pension compensation credit has been discharged under section 116,

• (b) the transferee was before death entitled under paragraph 4 to periodic compensation commencing on the transfer day, and

• (c) the transferee is survived by a widow, widower or surviving civil partner (“the surviving partner”).

• (2) Subject to sub-paragraph (4), the surviving partner is entitled to periodic compensation commencing on the day following the transferee's death and continuing for life.

• (3) The annual rate of the periodic compensation at any time is half of the annual rate of the periodic compensation (including any actuarial increase under paragraph 16A and any increases under paragraph 17) to which the transferee would at that time have been entitled under paragraph 4 had the transferee not died.

• (3A) If, on the day the transferee (“T”) died, commencement of T's periodic compensation under paragraph 4 was postponed by virtue of paragraph 16A, assume for the purposes of sub-paragraph (3) that the periodic compensation commenced immediately before the date of T's death.

• (4) The surviving partner is not entitled to periodic compensation under this paragraph in such circumstances as may be prescribed.

Part 3 — Transferee attains pension compensation age after transfer day

Compensation payable to transferee

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• (1) Compensation is payable in accordance with this paragraph where the transferee attains pension compensation age after the transfer day.

• (2) The transferee is entitled to periodic compensation commencing at that age and continuing for life.

• (3) The annual rate of the periodic compensation is the aggregate of—

• (a) the initial annual rate of compensation,

• (b) the revaluation amount (see paragraph 8), ...

• (ba) if the commencement of periodic compensation under this paragraph has been postponed for any period by virtue of paragraph 16A, the amount of the actuarial increase under that paragraph, and

• (c) any increases under paragraph 17 (annual increases in periodic compensation).

• (4) This paragraph is subject to—

• paragraph 9 (commutation),

• paragraph 10 (early payment),

• ...

• paragraph 15 (terminal illness lump sum), ...

• paragraph 16A (postponement of compensation), and

• paragraph 18 (compensation cap).

Compensation payable to widow, widower or surviving civil partner

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• (1) This paragraph applies where—

• (a) the transferee dies after liability in respect of the pension compensation credit has been discharged under section 116,

• (b) the transferee—

• (i) was, before death, entitled under paragraph 6 to periodic compensation commencing at pension compensation age, or

• (ii) would have become so entitled had he or she not died, and

• (c) the transferee is survived by a widow, widower or surviving civil partner (“the surviving partner”).

• (2) Subject to sub-paragraph (4), the surviving partner is entitled to periodic compensation commencing on the day following the transferee's death and continuing for life.

• (3) The annual rate of the periodic compensation at any time is—

• (a) where the transferee dies after attaining pension compensation age, half of the annual rate of the periodic compensation (including the revaluation amount (see paragraph 8) , any actuarial increase under paragraph 16A and any increases under paragraph 17) to which the transferee would at that time have been entitled under paragraph 6 had the transferee not died;

• (b) where the transferee dies before attaining pension compensation age, half of the annual rate of the periodic compensation (including the revaluation amount (see paragraph 8) and any increases under paragraph 17) to which the transferee would at that time have been entitled under paragraph 6 if—

• (i) the transferee's pension compensation age had been the transferee's actual age immediately before the date of the transferee's death, and

• (ii) the transferee had not died.

(assuming commencement of the periodic compensation was not postponed by virtue of paragraph 16A).

• (3A) For the purposes of sub-paragraph (3)(a), if on the day the transferee (“T”) died commencement of T's periodic compensation under paragraph 6 was postponed by virtue of paragraph 16A, assume that the periodic compensation commenced immediately before the date of T's death.

• (4) For the purposes of this paragraph, a person's entitlement under paragraph 6 is to be determined disregarding paragraph 15(1)(b) (successful applicant for terminal illness lump sum loses entitlement to periodic compensation).

• (5) The surviving partner is not entitled to periodic compensation under this paragraph in such circumstances as may be prescribed.

Revaluation

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• (1) This paragraph applies for the purpose of calculating the revaluation amount mentioned in paragraph 6(3)(b).

• (2) In this paragraph, “the revaluation period” means the period—

• (a) beginning with the transfer day, and

• (b) ending with the day before the transferee attains pension compensation age.

• (3) The revaluation amount is—

• (a) in a case in which the revaluation period is less than a month, nil;

• (b) in any other case, the revaluation percentage of the initial annual rate of compensation.

• (4) For the purposes of sub-paragraph (3)(b) “the revaluation percentage” means the lesser of—

• (a) the percentage increase in the general level of prices in Great Britain during the revaluation period, determined in the prescribed manner, and

• (b) the maximum revaluation rate.

• (5) For the purposes of sub-paragraph (4)(b) “the maximum revaluation rate” is—

• (a) in a case in which the revaluation period is a period of 12 months, 2.5%, and

• (b) in any other case, the percentage that would be the percentage mentioned in sub-paragraph (4)(a) had the general level of prices in Great Britain increased at the rate of 2.5% compound per annum during that period.

This is subject to paragraph 20 (power of Board to alter rates of revaluation and indexation).

Commutation of periodic compensation

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• (1) A transferee who is entitled to periodic compensation under paragraph 6 may, in prescribed circumstances, opt to commute for a lump sum a portion of the periodic compensation with effect from the time it commences.

• (2) Except in such circumstances as may be prescribed, the portion commuted under sub-paragraph (1) must not exceed 25%.

• (3) Any reduction required to be made by virtue of paragraph 18 (compensation cap) must be made before determining the amount of the transferee's periodic compensation which may be commuted under this paragraph.

• (4) Where the transferee opts to commute any part of his or her periodic compensation under this paragraph, the lump sum payable under sub-paragraph (1) is the actuarial equivalent of the commuted portion of the periodic compensation calculated from tables designated for this purpose by the Board.

• (5) The Board must publish in such manner as it considers appropriate the tables designated by it for the purposes of sub-paragraph (4).

• (6) Regulations may prescribe the manner in which an option to commute periodic compensation under this paragraph may be exercised.

• (7) The Secretary of State may, by order, amend sub-paragraph (2) so as to substitute a different percentage for that for the time being specified there.

Early payment of compensation

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• (1) Regulations may prescribe circumstances in which, and conditions subject to which, the transferee may become entitled to periodic compensation under paragraph 6 before attaining pension compensation age.

• (2) The Board must determine the amount of the actuarial reduction to be applied to compensation to which the transferee is entitled by virtue of this paragraph.

• (3) Where, by virtue of this paragraph, periodic compensation is payable to the transferee before he or she attains pension compensation age, paragraph 8(2)(b) (end of revaluation period) applies as if the reference to the day before the transferee attains pension compensation age were to the day on which compensation is payable by virtue of this paragraph.

Deferral of compensation

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

Terminal illness lump sum: eligibility

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• (1) This paragraph applies where all of the following conditions are met—

• (a) the transferee is terminally ill;

• (b) if the transferee lived to the relevant age, he or she would become entitled on attaining that age to compensation under paragraph 6 in respect of the pension compensation credit;

• (c) the transferee has not yet become entitled to any compensation under this Chapter in respect of the pension compensation credit;

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) The transferee may make an application to the Board to commute the future entitlement mentioned in sub-paragraph (1)(b) for a lump sum (“a terminal illness lump sum”) payable on the granting of the application.

• (3) For the purposes of this Chapter, a person is “terminally ill” at any time if at that time the person suffers from a progressive disease and the person's death in consequence of that disease can reasonably be expected within 6 months.

• (4) In this paragraph—

• ...

• “relevant age”, in relation to a person, means—in relation to compensation entitlement to which has been accelerated ... under regulations under paragraph 10..., the age at which the person becomes entitled to the compensation in accordance with the regulations;in relation to compensation entitlement to which has not been so accelerated or deferred, pension compensation age.

• (5) Sub-paragraph (6) applies where the commencement of a person's periodic compensation under paragraph 6 is postponed by virtue of paragraph 16A.

• (6) This paragraph applies as if—

• (a) the person first becomes entitled to compensation under paragraph 6 immediately after the period of postponement ends, and

• (b) in sub-paragraph (1)(b), for “if the transferee lived to the relevant age, he or she would become entitled on attaining that age” there were substituted “ if the period of postponement ended, the transferee would become entitled ”.

Terminal illness lump sum: application and evidence

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An application for a terminal illness lump sum—

• (a) must be made in writing, either on a form approved by the Board for the purposes of this paragraph or in such other manner as the Board may accept as sufficient in the circumstances of the case;

• (b) must be accompanied by such information as the Board may require for the purpose of determining the application.

Terminal illness lump sum: determination of application

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• (1) The Board must determine an application for a terminal illness lump sum in accordance with this paragraph.

• (2) The Board must—

• (a) if satisfied that the conditions in paragraph 12(1) are met, grant the application;

• (b) in any other case (subject to sub-paragraph (3)), reject the application.

• (3) The Board may hold over the application for determination at a later date if it is satisfied that—

• (a) although the condition in paragraph 12(1)(a) is not met, the transferee suffers from a progressive disease and may become terminally ill within six months, and

• (b) the conditions in paragraph 12(1)(b) to (d) are met.

Terminal illness lump sum: effect of successful application

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• (1) If the Board grants an application for a terminal illness lump sum, the transferee—

• (a) becomes entitled to a terminal illness lump sum calculated in accordance with this paragraph, and

• (b) loses the entitlement he or she otherwise would have had on attaining the relevant age to compensation under paragraph 6 in respect of the pension compensation credit.

• (2) The amount of the terminal illness lump sum is 2 times the amount to which the transferee would have been entitled under paragraph 6 in respect of the pension compensation credit in the year following the granting of the application, if he or she had attained the relevant age on the granting of the application.

• (3) In this paragraph “the relevant age” has the same meaning as in paragraph 12.

• (4) Where on the granting of the application the commencement of a person's periodic compensation under paragraph 6 is postponed by virtue of paragraph 16A, this paragraph applies as if the references to the transferee attaining the relevant age were references to the period of postponement ending.

Terminal illness lump sum: information

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• (1) Relevant information held by the Secretary of State about an individual may be disclosed to the Board for use for a purpose relating to its functions under paragraphs 12 to 15.

• (2) In sub-paragraph (1), “relevant information” means information held for the purposes of any function of the Secretary of State relating to—

• (a) social security, or

• (b) any scheme made under section 286 of the Pensions Act 2004 (c. 35) (financial assistance scheme).

Part 4 — Provisions applicable irrespective of age of transferee on transfer day

Annual increase in periodic compensation

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• (1) This paragraph provides for annual increases to compensation payable to the transferee.

• (2) The transferee is entitled, on each indexation date, to an increase of the appropriate percentage of the underlying rate.

• (3) The increase to which the transferee is entitled on the first indexation date is restricted to 1/12 of the amount calculated under sub-paragraph (2) for each full month in the period beginning with the transfer day and ending with that indexation date.

• (4) For the purposes of sub-paragraph (2)—

• “the appropriate percentage”, as at an indexation date, is the lesser of—the percentage increase in the general level of prices in Great Britain for the period of 12 months ending with the 31 May last falling before that date, and2.5%;

• “the indexation date” means—the 1 January next falling after the transferee first becomes entitled to the periodic compensation, andeach subsequent 1 January during the transferee's lifetime;

• “the underlying rate”, as at an indexation date, is the aggregate of—the indexed proportion (as determined under sub-paragraph (5) or (6) below) of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6) the revaluation amount, ...so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), andany annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates.

• (4A) For the purposes of paragraph (a) of the definition of “the appropriate percentage” in sub-paragraph (4), the Secretary of State may (from time to time) decide, as the Secretary of State thinks fit, the manner in which percentage increases in the general level of prices in Great Britain are to be determined.

• (4B) The Secretary of State must publish any decision made under sub-paragraph (4A).

• (5) Where the transferor's PPF compensation is payable in accordance with paragraph 3, 5, 8, 11, 15 or 22 of Schedule 7 to the Pensions Act 2004 (“the relevant paragraph of Schedule 7”), “the indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the relevant paragraph of Schedule 7 that is attributable to the transferor's post-1997 service.

Paragraph 28(4) of that Schedule applies for the purpose of attributing amounts to the transferor's post-1997 service under this sub-paragraph.

• (6) Where the transferor's PPF compensation is payable otherwise than as mentioned in sub-paragraph (5), “the indexed proportion” is such proportion as is determined in accordance with regulations made by the Secretary of State.

• (7) Where the compensation payable to the transferee is—

• (a) reduced as a result of the commutation of periodic compensation under paragraph 9, or

• (b) restricted under regulations under paragraph 18 (compensation cap),

the references in paragraph (a) of the definition of “the underlying rate” in sub-paragraph (4) above to the initial annual compensation rate and the revaluation amount are to that rate and that amount as so restricted or reduced (and paragraph (aa) of the definition applies accordingly).

• (7A) Where the commencement of periodic compensation has been postponed by virtue of paragraph 16A, this paragraph applies as if the transferee first becomes entitled to the periodic compensation on the day on which the periodic compensation commences.

• (8) The definition of “the appropriate percentage” in sub-paragraph (4) is subject to paragraph 20 (power of Board to alter rates of revaluation and indexation).

• (9) In this paragraph—

• “post-1997 service” has the same meaning as in paragraph 28 of Schedule 7 to the Pensions Act 2004 (c. 35) (annual increase in periodic pension compensation);

• “the commutation percentage”, in relation to periodic compensation, means the percentage of that compensation commuted under paragraph 9.

Compensation cap

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• (1) The Secretary of State may by regulations make provision for restricting the amount of periodic compensation payable under this Schedule in a case in which, on the transfer day, the transferor is not entitled to present payment of PPF compensation.

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

Compensation in form of dependant’s benefits

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• (1) The Secretary of State may by regulations make provision for compensation to be payable to—

• (a) prescribed descriptions of partners, or

• (b) prescribed descriptions of dependants,

of prescribed descriptions of transferees.

• (2) The regulations may, in particular—

• (a) provide for compensation in the form of periodic or lump sum payments;

• (b) provide for periodic compensation to be payable for a prescribed period;

• (c) apply paragraph 17 (annual increases in respect of periodic compensation), with or without modifications, in respect of compensation in the form of periodic payments.

Board’s power to alter rates of revaluation and indexation

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• (1) The Board may determine the percentage that is to be—

• (a) the maximum revaluation rate for the purposes of paragraph 8(4)(b);

• (b) the appropriate percentage for the purposes of paragraph 17(2).

• (2) Before making a determination under this paragraph the Board must—