PART I continued
(2) Subject to section 52, where a pension to which this section applies, or any part of it, is attributable to pensionable service on or after the appointed day or, in the case of money purchase benefits, to payments in respect of employment carried on on or after the appointed day—
(a) the annual rate of the pension, or
(b) if only part of the pension is attributable to pensionable service or, as the case may be, to payments in respect of employment carried on on or after the appointed day, so much of the annual rate as is attributable to that part,
must be increased annually by at least the appropriate percentage.
(3) Subsection (2) does not apply to a pension under an occupational pension scheme if the rules of the scheme require—
(a) the annual rate of the pension, or
(b) if only part of the pension is attributable to pensionable service or, as the case may be, to payments in respect of employment carried on on or after the appointed day, so much of the annual rate as is attributable to that part,
to be increased at intervals of not more than twelve months by at least the relevant percentage and the scheme complies with any prescribed requirements.
(4) For the purposes of subsection (3) the relevant percentage is—
(a) the percentage increase in the retail prices index for the reference period, being a period determined, in relation to each periodic increase, under the rules, or
(b) the percentage for that period which corresponds to 5 per cent per annum,
whichever is the lesser.
(5) Regulations may provide that the provisions of subsections (2) and (3) apply in relation to a pension as if so much of it as would not otherwise be attributable to pensionable service or to payments in respect of employment were attributable to pensionable service or, as the case may be, payments in respect of employment—
(a) before the appointed day,
(b) on or after that day, or
(c) partly before and partly on or after that day.
(6) This section does not apply to any pension or part of a pension which, in the opinion of the trustees or managers, is derived from the payment by any member of the scheme of voluntary contributions.
(1) Subject to subsection (2), no increase under section 51 is required to be paid to or for a member of a scheme whose pension is in payment but who has not attained the age of 55 at the time when the increase takes effect.
(2) Subsection (1) does not apply if the member—
(a) is permanently incapacitated by mental or physical infirmity from engaging in regular full-time employment, or
(b) has retired on account of mental or physical infirmity from the employment in respect of which, or on retirement from which, the pension is payable.
(3) The rules of a scheme may provide that if, in a case where a pension has been paid to or for a member under the age of 55 at an increased rate in consequence of subsection (2), the member—
(a) ceases to suffer from the infirmity in question before he attains the age of 55, but
(b) continues to be entitled to the pension,
any increases subsequently taking effect under section 51 in the annual rate of the pension shall not be paid or shall not be paid in full.
(4) In any case where—
(a) by virtue only of subsection (1) or (3), increases are not paid to or for a member or are not paid in full, but
(b) the member attains the age of 55 or, in a case falling within subsection (3), again satisfies the condition set out in subsection (2)(a) or (b),
his pension shall then become payable at the annual rate at which it would have been payable apart from subsection (1) or (3).
(1) Where in any tax year the trustees or managers of an occupational pension scheme make an increase in a person’s pension, not being an increase required by section 109 of the [1993 c. 48.] Pension Schemes Act 1993 or section 51 of this Act, they may deduct the amount of the increase from any increase which, but for this subsection, they would be required to make under either of those sections in the next tax year.
(2) Where in any tax year the trustees or managers of such a scheme make an increase in a person’s pension and part of the increase is not required by section 109 of the Pension Schemes Act 1993 or section 51 of this Act, they may deduct that part of the increase from any increase which, but for this subsection, they would be required to make under either of those sections in the next tax year.
(3) Where by virtue of subsection (1) or (2) any pensions are not required to be increased in pursuance of section 109 of the Pension Schemes Act 1993 or section 51 of this Act, or not by the full amount that they otherwise would be, their amount shall be calculated for any purpose as if they had been increased in pursuance of the section in question or, as the case may be, by that full amount.
(4) In section 110 of the [1993 c. 48.] Pension Schemes Act 1993 (resources for annual increase of guaranteed minimum pension)—
(a) subsections (2) to (4) are omitted, and
(b) in subsection (1), for “subsection (2) or (3)” there is substituted “section 53 of the Pensions Act 1995”.
(1) The first increase required by section 51 in the rate of a pension must take effect not later than the first anniversary of the date on which the pension is first paid; and subsequent increases must take effect at intervals of not more than twelve months.
(2) Where the first such increase is to take effect on a date when the pension has been in payment for a period of less than twelve months, the increase must be of an amount at least equal to one twelfth of the amount of the increase so required (apart from this subsection) for each complete month in that period.
(3) In sections 51 to 53 and this section—
“annual rate”, in relation to a pension, means the annual rate of the pension, as previously increased under the rules of the scheme or under section 51,
“the appointed day” means the day appointed under section 180 for the commencement of section 51,
“appropriate percentage”, in relation to an increase in the whole or part of the annual rate of a pension, means the revaluation percentage for the revaluation period the reference period for which ends with the last preceding 30th September before the increase is made (expressions used in this definition having the same meaning as in paragraph 2 of Schedule 3 to the Pension Schemes Act 1993 (methods of revaluing accrued pension benefits)),
“pension”, in relation to a scheme, means any pension in payment under the scheme and includes an annuity.
In section 109 of the [1993 c. 48.] Pension Schemes Act 1993 (annual increase of guaranteed minimum pensions)—
(a) in subsection (2) (increase in rate of that part of guaranteed minimum pension attributable to earnings factors for tax year 1988-89 and subsequent tax years) for “the tax year 1988-89 and subsequent tax years” there is substituted “the tax years in the relevant period”, and
(b) after subsection (3) there is inserted—
“(3A) The relevant period is the period—
(a) beginning with the tax year 1988-89, and
(b) ending with the last tax year that begins before the principal appointed day for the purposes of Part III of the Pensions Act 1995”.
(1) Every occupational pension scheme to which this section applies is subject to a requirement (referred to in this Part as “the minimum funding requirement”) that the value of the assets of the scheme is not less than the amount of the liabilities of the scheme.
(2) This section applies to an occupational pension scheme other than—
(a) a money purchase scheme, or
(b) a scheme falling within a prescribed class or description.
(3) For the purposes of this section and sections 57 to 61, the liabilities and assets to be taken into account, and their amount or value, shall be determined, calculated and verified by a prescribed person and in the prescribed manner.
(4) In calculating the value of any liabilities for those purposes, a provision of the scheme which limits the amount of its liabilities by reference to the amount of its assets is to be disregarded.
(5) In sections 57 to 61, in relation to any occupational pension scheme to which this section applies—
(a) the amount of the liabilities referred to in subsection (1) is referred to as “the amount of the scheme liabilities”,
(b) the value of the assets referred to in that subsection is referred to as “the value of the scheme assets”,
(c) an “actuarial valuation” means a written valuation prepared and signed by the actuary of the scheme of the assets and liabilities referred to in subsection (1), and
(d) the “effective date” of an actuarial valuation is the date by reference to which the assets and liabilities are valued.
(1) The trustees or managers of an occupational pension scheme to which section 56 applies must—
(a) obtain, within a prescribed period, an actuarial valuation and afterwards obtain such a valuation before the end of prescribed intervals, and
(b) on prescribed occasions or within prescribed periods, obtain a certificate prepared by the actuary of the scheme—
(i) stating whether or not in his opinion the contributions payable towards the scheme are adequate for the purpose of securing that the minimum funding requirement will continue to be met throughout the prescribed period or, if it appears to him that it is not met, will be met by the end of that period, and
(ii) indicating any relevant changes that have occurred since the last actuarial valuation was prepared.
(2) Subject to subsection (3), the trustees or managers must—
(a) if the actuary states in such a certificate that in his opinion the contributions payable towards the scheme are not adequate for the purpose of securing that the minimum funding requirement will continue to be met throughout the prescribed period or, if it appears to him that it is not met, will be met by the end of that period, or
(b) in prescribed circumstances,
obtain an actuarial valuation within the period required by subsection (4).
(3) In a case within subsection (2)(a), the trustees or managers are not required to obtain an actuarial valuation if—
(a) in the opinion of the actuary of the scheme, the value of the scheme assets is not less than 90 per cent. of the amount of the scheme liabilities, and
(b) since the date on which the actuary signed the certificate referred to in that subsection, the schedule of contributions for the scheme has been revised under section 58(3)(b).
(4) If the trustees or managers obtain a valuation under subsection (2) they must do so—
(a) in the case of a valuation required by paragraph (a), within the period of six months beginning with the date on which the certificate was signed, and
(b) in any other case, within a prescribed period.
(5) A valuation or certificate obtained under subsection (1) or (2) must be prepared in such manner, give such information and contain such statements as may be prescribed.
(6) The trustees or managers must secure that any valuation or certificate obtained under this section is made available to the employer within seven days of their receiving it.
(7) Where, in the case of an occupational pension scheme to which section 56 applies, subsection (1), (2) or (6) is not complied with—
(a) section 3 applies to any trustee who has failed to take all such steps as are reasonable to secure compliance, and
(b) section 10 applies to any trustee or manager who has failed to take all such steps.
(1) The trustees or managers of an occupational pension scheme to which section 56 applies must secure that there is prepared, maintained and from time to time revised a schedule (referred to in sections 57 to 59 as a “schedule of contributions”) showing—
(a) the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme, and
(b) the dates on or before which such contributions are to be paid.
(2) The schedule of contributions for a scheme must satisfy prescribed requirements.
(3) The schedule of contributions for a scheme—
(a) must be prepared before the end of a prescribed period beginning with the signing of the first actuarial valuation for the scheme,
(b) may be revised from time to time where the revisions are previously agreed by the trustees or managers and the employer and any revision in the rates of contributions is certified by the actuary of the scheme, and
(c) must be revised before the end of a prescribed period beginning with the signing of each subsequent actuarial valuation.
(4) The matters shown in the schedule of contributions for a scheme—
(a) must be matters previously agreed by the trustees or managers and the employer, or
(b) if no such agreement has been made as to all the matters shown in the schedule, must be—
(i) rates of contributions determined by the trustees or managers, being such rates as in their opinion are adequate for the purpose of securing that the minimum funding requirement will continue to be met throughout the prescribed period or, if it appears to them that it is not met, will be met by the end of that period, and
(ii) other matters determined by the trustees or managers;
and the rates of contributions shown in the schedule must be certified by the actuary of the scheme.
(5) An agreement for the purposes of subsection (4)(a) is one which is made by the trustees or managers and the employer during the prescribed period beginning with the signing of the last preceding actuarial valuation for the scheme.
(6) The actuary may not certify the rates of contributions shown in the schedule of contributions—
(a) in a case where on the date he signs the certificate it appears to him that the minimum funding requirement is met, unless he is of the opinion that the rates are adequate for the purpose of securing that the requirement will continue to be met throughout the prescribed period, and
(b) in any other case, unless he is of the opinion that the rates are adequate for the purpose of securing that the requirement will be met by the end of that period.
(7) The Authority may in prescribed circumstances extend (or further extend) the period referred to in subsection (6).
(8) Where, in the case of any occupational pension scheme to which section 56 applies, this section is not complied with—
(a) section 3 applies to any trustee who has failed to take all such steps as are reasonable to secure compliance, and
(b) section 10 applies to any trustee or manager who has failed to take all such steps.
(1) Except in prescribed circumstances, the trustees or managers of an occupational pension scheme to which section 56 applies must, where any amounts payable by or on behalf of the employer or the active members of the scheme in accordance with the schedule of contributions have not been paid on or before the due date, give notice of that fact, within the prescribed period, to the Authority and to the members of the scheme.
(2) Any such amounts which for the time being remain unpaid after that date (whether payable by the employer or not) shall, if not a debt due from the employer to the trustees or managers apart from this subsection, be treated as such a debt.
(3) If, in the case of an occupational pension scheme to which section 56 applies, it appears to the trustees or managers, at the end of any prescribed period that the minimum funding requirement is not met, they must prepare a report giving the prescribed information about the failure to meet that requirement.
(4) If in the case of any such scheme, subsection (1) or (3) is not complied with—
(a) section 3 applies to any trustee who has failed to take all such steps as are reasonable to secure compliance, and
(b) section 10 applies to any trustee or manager who has failed to take all such steps.
(1) Subsection (2) applies where, in the case of an occupational pension scheme to which section 56 applies, an actuarial valuation shows that, on the effective date of the valuation, the value of the scheme assets is less than 90 per cent. of the amount of the scheme liabilities (the difference shown in the valuation being referred to in this section as “the shortfall”).
(2) The employer must—
(a) by making an appropriate payment to the trustees or managers, or
(b) by a prescribed method,
secure an increase in the value of the scheme assets which, taken with any contributions paid, is not less than the shortfall.
(3) The required increase in that value must be secured—
(a) before the end of a prescribed period beginning with the signing of the valuation, or
(b) if the actuarial valuation was obtained by reason of such a statement in a certificate as is referred to in section 57(2), before the end of a prescribed period beginning with the signing of the certificate.
(4) Except in prescribed circumstances, if the employer fails to secure the required increase in value before the end of the period applicable under subsection (3), the trustees or managers must, within the period of fourteen days (or such longer period as is prescribed) beginning with the end of that period, give written notice of that fact to the Authority and to the members of the scheme.
(5) If the employer fails to secure the required increase in value before the end of the period applicable under subsection (3), then so much of the shortfall as, at any subsequent time, has not been met by an increase in value under subsection (2) made—
(a) by making an appropriate payment to the trustees or managers,
(b) by a prescribed method, or
(c) by contributions made before the end of that period,
shall, if not a debt due from the employer to the trustees or managers apart from this subsection, be treated at that time as such a debt.
(6) Where an increase in value is secured by a prescribed method, the increase is to be treated for the purposes of this section as being of an amount determined in accordance with regulations.
(7) The Authority may in prescribed circumstances extend (or further extend) the period applicable under subsection (3).
(8) If subsection (4) is not complied with—
(a) section 3 applies to any trustee who has failed to take all such steps as are reasonable to secure compliance, and
(b) section 10 applies to any trustee or manager who has failed to take all such steps.
Regulations may modify sections 56 to 60 as they apply in prescribed circumstances.
(1) An occupational pension scheme which does not contain an equal treatment rule shall be treated as including one.
(2) An equal treatment rule is a rule which relates to the terms on which—
(a) persons become members of the scheme, and
(b) members of the scheme are treated.
(3) Subject to subsection (6), an equal treatment rule has the effect that where—
(a) a woman is employed on like work with a man in the same employment,
(b) a woman is employed on work rated as equivalent with that of a man in the same employment, or
(c) a woman is employed on work which, not being work in relation to which paragraph (a) or (b) applies, is, in terms of the demands made on her (for instance under such headings as effort, skill and decision) of equal value to that of a man in the same employment,
but (apart from the rule) any of the terms referred to in subsection (2) is or becomes less favourable to the woman than it is to the man, the term shall be treated as so modified as not to be less favourable.
(4) An equal treatment rule does not operate in relation to any difference as between a woman and a man in the operation of any of the terms referred to in subsection (2) if the trustees or managers of the scheme prove that the difference is genuinely due to a material factor which—
(a) is not the difference of sex, but
(b) is a material difference between the woman’s case and the man’s case.
(5) References in subsection (4) and sections 63 to 65 to the terms referred to in subsection (2), or the effect of any of those terms, include—
(a) a term which confers on the trustees or managers of an occupational pension scheme, or any other person, a discretion which, in a case within any of paragraphs (a) to (c) of subsection (3)—
(i) may be exercised so as to affect the way in which persons become members of the scheme, or members of the scheme are treated, and
(ii) may (apart from the equal treatment rule) be so exercised in a way less favourable to the woman than to the man, and
(b) the effect of any exercise of such a discretion;
and references to the terms on which members of the scheme are treated are to be read accordingly.
(6) In the case of a term within subsection (5)(a) the effect of an equal treatment rule is that the term shall be treated as so modified as not to permit the discretion to be exercised in a way less favourable to the woman than to the man.
(1) The reference in section 62(2) to the terms on which members of a scheme are treated includes those terms as they have effect for the benefit of dependants of members, and the reference in section 62(5) to the way in which members of a scheme are treated includes the way they are treated as it has effect for the benefit of dependants of members.
(2) Where the effect of any of the terms referred to in section 62(2) on persons of the same sex differs according to their family or marital status, the effect of the term is to be compared for the purposes of section 62 with its effect on persons of the other sex who have the same status.
(3) An equal treatment rule has effect subject to paragraphs 5 and 6 of Schedule 5 to the [1989 c. 24.] Social Security Act 1989 (employment-related benefit schemes: maternity and family leave provisions).
(4) Section 62 shall be construed as one with section 1 of the [1970 c. 41.] Equal Pay Act 1970 (requirement of equal treatment for men and women in the same employment); and sections 2 and 2A of that Act (disputes and enforcement) shall have effect for the purposes of section 62 as if—
(a) references to an equality clause were to an equal treatment rule,
(b) references to employers and employees were to the trustees or managers of the scheme (on the one hand) and the members, or prospective members, of the scheme (on the other),
(c) for section 2(4) there were substituted—
“(4) No claim in respect of the operation of an equal treatment rule in respect of an occupational pension scheme shall be referred to an industrial tribunal otherwise than by virtue of subsection (3) above unless the woman concerned has been employed in a description or category of employment to which the scheme relates within the six months preceding the date of the reference”, and
(d) references to section 1(2)(c) of the [1970 c. 41.] Equal Pay Act 1970 were to section 62(3)(c) of this Act.
(5) Regulations may make provision for the [1970 c. 41.] Equal Pay Act 1970 to have effect, in relation to an equal treatment rule, with prescribed modifications; and subsection (4) shall have effect subject to any regulations made by virtue of this subsection.
(6) Section 62, so far as it relates to the terms on which members of a scheme are treated, is to be treated as having had effect in relation to any pensionable service on or after 17th May 1990.
(1) An equal treatment rule does not operate in relation to any variation as between a woman and a man in the effect of any of the terms referred to in section 62(2) if the variation is permitted by or under any of the provisions of this section.
(2) Where a man and a woman are eligible, in prescribed circumstances, to receive different amounts by way of pension, the variation is permitted by this subsection if, in prescribed circumstances, the differences are attributable only to differences between men and women in the benefits under sections 43 to 55 of the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 (State retirement pensions) to which, in prescribed circumstances, they are or would be entitled.
(3) A variation is permitted by this subsection if—
(a) the variation consists of the application of actuarial factors which differ for men and women to the calculation of contributions to a scheme by employers, being factors which fall within a prescribed class or description, or
(b) the variation consists of the application of actuarial factors which differ for men and women to the determination of benefits falling within a prescribed class or description;
and in this subsection “benefits” include any payment or other benefit made to or in respect of a person as a member of the scheme.
(4) Regulations may—
(a) permit further variations, or
(b) amend or repeal subsection (2) or (3);
and regulations made by virtue of this subsection may have effect in relation to pensionable service on or after 17th May 1990 and before the date on which the regulations are made.
(1) The trustees or managers of an occupational pension scheme may, if—
(a) they do not (apart from this section) have power to make such alterations to the scheme as may be required to secure conformity with an equal treatment rule, or
(b) they have such power but the procedure for doing so—
(i) is liable to be unduly complex or protracted, or
(ii) involves the obtaining of consents which cannot be obtained, or can only be obtained with undue delay or difficulty,
by resolution make such alterations to the scheme.
(2) The alterations may have effect in relation to a period before the alterations are made.
(1) In section 6 of the [1970 c. 41.] Equal Pay Act 1970 (exclusions), for subsections (1A) and (2) (exclusion for terms related to death or retirement) there is substituted—
“(1B) An equality clause shall not operate in relation to terms relating to a person’s membership of, or rights under, an occupational pension scheme, being terms in relation to which, by reason only of any provision made by or under sections 62 to 64 of the Pensions Act 1995 (equal treatment), an equal treatment rule would not operate if the terms were included in the scheme.
(1C) In subsection (1B), “occupational pension scheme” has the same meaning as in the Pension Schemes Act 1993 and “equal treatment rule” has the meaning given by section 62 of the Pensions Act 1995”.
(2) In section 4(1) of the [1975 c. 65.] Sex Discrimination Act 1975 (victimisation of complainants etc.)—
(a) in paragraphs (a), (b) and (c), after “[1975 c. 65.] Equal Pay Act 1970” there is inserted “or sections 62 to 65 of the Pensions Act 1995”, and
(b) at the end of paragraph (d) there is added “or under sections 62 to 65 of the Pensions Act 1995”.
(3) In section 6 of the Sex Discrimination Act 1975 (discrimination against applicants and employees), for subsection (4) there is substituted—
“(4) Subsections (1)(b) and (2) do not render it unlawful for a person to discriminate against a woman in relation to her membership of, or rights under, an occupational pension scheme in such a way that, were any term of the scheme to provide for discrimination in that way, then, by reason only of any provision made by or under sections 62 to 64 of the Pensions Act 1995 (equal treatment), an equal treatment rule would not operate in relation to that term.
(4A) In subsection (4), “occupational pension scheme” has the same meaning as in the Pension Schemes Act 1993 and “equal treatment rule” has the meaning given by section 62 of the Pensions Act 1995”.
(4) Regulations may make provision—
(a) for the [1970 c. 41.] Equal Pay Act 1970 to have effect, in relation to terms of employment relating to membership of, or rights under, an occupational pension scheme with prescribed modifications, and
(b) for imposing requirements on employers as to the payment of contributions and otherwise in case of their failing or having failed to comply with any such terms.
(5) References in subsection (4) to terms of employment include (where the context permits)—
(a) any collective agreement or pay structure, and
(b) an agricultural wages order within section 5 of the [1970 c. 41.] Equal Pay Act 1970.
(1) This section applies to any power conferred on any person by an occupational pension scheme (other than a public service pension scheme) to modify the scheme.
(2) The power cannot be exercised on any occasion in a manner which would or might affect any entitlement, or accrued right, of any member of the scheme acquired before the power is exercised unless the requirements under subsection (3) are satisfied.
(3) Those requirements are that, in respect of the exercise of the power in that manner on that occasion—
(a) the trustees have satisfied themselves that—
(i) the certification requirements, or
(ii) the requirements for consent,
are met in respect of that member, and
(b) where the power is exercised by a person other than the trustees, the trustees have approved the exercise of the power in that manner on that occasion.
(4) In subsection (3)—
(a) “the certification requirements” means prescribed requirements for the purpose of securing that no power to which this section applies is exercised in any manner which, in the opinion of an actuary, would adversely affect any member of the scheme (without his consent) in respect of his entitlement, or accrued rights, acquired before the power is exercised, and
(b) “the consent requirements” means prescribed requirements for the purpose of obtaining the consent of members of a scheme to the exercise of a power to which this section applies.
(5) Subsection (2) does not apply to the exercise of a power in a prescribed manner.
(6) Where a power to which this section applies may not (apart from this section) be exercised without the consent of any person, regulations may make provision for treating such consent as given in prescribed circumstances.