Office of Public Sector Information
PART I continued
(1) Where in the opinion of the Compensation Board section 81 applies to an application for compensation under section 82 in respect of a trust scheme, and the Board have determined the settlement date, the Board may make a payment or payments to the trustees of the scheme in accordance with this section.
(2) The amount of any payment must be determined in accordance with regulations and must take account of any payment already made under section 84, and the Compensation Board must give written notice of their determination to the person who made the application under section 82 and (if different) to the trustees.
(3) The amount of the payment or (if there is more than one) the aggregate—
(a) must not exceed 90 per cent. of the shortfall at the application date, together with interest at the prescribed rate for the prescribed period on the shortfall or (if the shortfall comprises more than one reduction in value) on each of the reductions, and also,
(b) in the case of a salary related scheme, must not exceed the amount which, on the settlement date, is required to be paid to the trustees of the scheme in order to secure that the value on that date of the assets of the scheme is equal to 90 per cent. of the amount on that date of the liabilities of the scheme.
(1) The Compensation Board may, on an application for compensation under section 82, make a payment or payments to the trustees of a trust scheme where in their opinion—
(a) section 81 applies, or may apply, to the application, and
(b) the trustees would not otherwise be able to meet liabilities falling within a prescribed class,
but the Board have not determined the settlement date.
(2) Amounts payable under this section must be determined in accordance with regulations.
(3) Where any payment is made under this section, the Compensation Board may, except in prescribed circumstances—
(a) if they subsequently form the opinion that section 81 does not apply to the application for compensation in respect of the scheme, or
(b) if they subsequently form the opinion that the amount of the payment was excessive,
recover so much of the payment as they consider appropriate.
(1) If the Secretary of State, after consultation with the Compensation Board, considers that the funds for the time being held by the Board exceed what is reasonably required for the purpose of exercising their functions under this Part, he may by order require them to distribute any of those funds appearing to him to be surplus to their requirements among occupational pension schemes.
(2) A distribution under subsection (1) must be made in the prescribed manner and subject to the prescribed conditions.
(3) The Compensation Board may invest any funds for the time being held by them which appear to them to be surplus to their requirements—
(a) in any investment for the time being falling within Part I, Part II or Part III of Schedule 1 to the [1961 c. 62.] Trustee Investments Act 1961, or
(b) in any prescribed investment.
Regulations may modify the compensation provisions in their application to trust schemes falling within a prescribed class or description.
(1) This section applies to an occupational pension scheme which is a money purchase scheme, other than one falling within a prescribed class or description.
(2) The trustees or managers of every occupational pension scheme to which this section applies must secure that there is prepared, maintained and from time to time revised a schedule (referred to in this section and section 88 as a “payment schedule”) showing—
(a) the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme,
(b) such other amounts payable towards the scheme as may be prescribed, and
(c) the dates on or before which payments of such contributions or other amounts are to be made (referred to in those sections as “due dates”).
(3) The payment schedule for a scheme must satisfy prescribed requirements.
(4) The matters shown in the payment schedule for a scheme—
(a) to the extent that the scheme makes provision for their determination, must be so determined, and
(b) otherwise,
(i) must be matters previously agreed between the employer and the trustees or managers of the scheme, or
(ii) if no such agreement has been made as to all matters shown in the schedule (other than those for whose determination the scheme makes provision), must be matters determined by the trustees or managers of the scheme.
(5) Where in the case of a scheme this section is not complied with—
(a) 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 87 applies must, where any amounts payable in accordance with the payment schedule 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) Where any amounts payable in accordance with the payment schedule by or on behalf of the employer have not been paid on or before the due date, section 10 applies to the employer.
(4) If, in the case of an occupational pension scheme to which section 87 applies, subsection (1) is not complied with—
(a) 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) In the case of money purchase schemes falling within a prescribed class or description, regulations may—
(a) provide for any of the provisions of sections 56 to 60 to apply, or apply with prescribed modifications (in spite of anything in those sections), and
(b) provide for any of the provisions of sections 87 and 88 to apply with prescribed modifications or not to apply,
to such extent as may be prescribed.
(2) Regulations may provide for any of the provisions of section 75 to apply, or apply with prescribed modifications, to money purchase schemes to such extent as may be prescribed (in spite of anything in that section), and the power conferred by this subsection includes power to apply section 75 in circumstances other than those in which the scheme is being wound up or a relevant insolvency event occurs (within the meaning of that section).
In section 124 of the [1993 c. 48.] Pension Schemes Act 1993 (duty of Secretary of State to pay unpaid contributions to schemes), after subsection (3) there is inserted—
“(3A) Where the scheme in question is a money purchase scheme, the sum payable under this section by virtue of subsection (3) shall be the lesser of the amounts mentioned in paragraphs (a) and (c) of that subsection”, and, accordingly, at the beginning of subsection (3) there is inserted “Subject to subsection (3A),”.
(1) Subject to subsection (5), where a person is entitled, or has an accrued right, to a pension under an occupational pension scheme—
(a) the entitlement or right cannot be assigned, commuted or surrendered,
(b) the entitlement or right cannot be charged or a lien exercised in respect of it, and
(c) no set-off can be exercised in respect of it,
and an agreement to effect any of those things is unenforceable.
(2) Where by virtue of this section a person’s entitlement, or accrued right, to a pension under an occupational pension scheme cannot, apart from subsection (5), be assigned, no order can be made by any court the effect of which would be that he would be restrained from receiving that pension.
(3) Where a bankruptcy order is made against a person, any entitlement or right of his which by virtue of this section cannot, apart from subsection (5), be assigned is excluded from his estate for the purposes of Parts VIII to XI of the [1986 c. 45.] Insolvency Act 1986 or the [1985 c. 66.] Bankruptcy (Scotland) Act 1985.
(4) Subsection (2) does not prevent the making of—
(a) an attachment of earnings order under the [1971 c. 32.] Attachment of Earnings Act 1971, or
(b) an income payments order under the [1986 c. 45.] Insolvency Act 1986.
(5) In the case of a person (“the person in question”) who is entitled, or has an accrued right, to a pension under an occupational pension scheme, subsection (1) does not apply to any of the following, or any agreement to effect any of the following—
(a) an assignment in favour of the person in question’s widow, widower or dependant,
(b) a surrender, at the option of the person in question, for the purpose of—
(i) providing benefits for that person’s widow, widower or dependant, or
(ii) acquiring for the person in question entitlement to further benefits under the scheme,
(c) a commutation—
(i) of the person in question’s benefit on or after retirement or in exceptional circumstances of serious ill health,
(ii) in prescribed circumstances, of any benefit for that person’s widow, widower or dependant, or
(iii) in other prescribed circumstances,
(d) subject to subsection (6), a charge or lien on, or set-off against, the person in question’s entitlement, or accrued right, to pension (except to the extent that it includes transfer credits other than prescribed transfer credits) for the purpose of enabling the employer to obtain the discharge by him of some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or omission by him,
(e) subject to subsection (6), except in prescribed circumstances a charge or lien on, or set-off against, the person in question’s entitlement, or accrued right, to pension, for the purpose of discharging some monetary obligation due from the person in question to the scheme and—
(i) arising out of a criminal, negligent or fraudulent act or omission by him, or
(ii) in the case of a trust scheme of which the person in question is a trustee, arising out of a breach of trust by him.
(6) Where a charge, lien or set-off is exercisable by virtue of subsection (5)(d) or (e)—
(a) its amount must not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person in question’s entitlement or accrued right, and
(b) the person in question must be given a certificate showing the amount of the charge, lien or set-off and its effect on his benefits under the scheme,
and where there is a dispute as to its amount, the charge, lien or set-off must not be exercised unless the obligation in question has become enforceable under an order of a competent court or in consequence of an award of an arbitrator or, in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.
(7) This section is subject to section 159 of the [1993 c. 48.] Pension Schemes Act 1993 (inalienability of guaranteed minimum pension and protected rights payments).
(1) Subject to the provisions of this section and section 93, an entitlement, or accrued right, to a pension under an occupational pension scheme cannot be forfeited.
(2) Subsection (1) does not prevent forfeiture by reference to—
(a) a transaction or purported transaction which under section 91 is of no effect, or
(b) the bankruptcy of the person entitled to the pension or whose right to it has accrued,
whether or not that event occurred before or after the pension became payable.
(3) Where such forfeiture as is mentioned in subsection (2) occurs, any pension which was, or would but for the forfeiture have become, payable may, if the trustees or managers of the scheme so determine, be paid to all or any of the following—
(a) the member of the scheme to or in respect of whom the pension was, or would have become, payable,
(b) the spouse, widow or widower of the member,
(c) any dependant of the member, and
(d) any other person falling within a prescribed class.
(4) Subsection (1) does not prevent forfeiture by reference to the person entitled to the pension, or whose right to it has accrued, having been convicted of one or more offences—
(a) which are committed before the pension becomes payable, and
(b) which are—
(i) offences of treason,
(ii) offences under the Official Secrets Acts 1911 to 1989 for which the person has been sentenced on the same occasion to a term of imprisonment of, or to two or more consecutive terms amounting in the aggregate to, at least 10 years, or
(iii) prescribed offences.
(5) Subsection (1) does not prevent forfeiture by reference to a failure by any person to make a claim for pension—
(a) where the forfeiture is in reliance on any enactment relating to the limitation of actions, or
(b) where the claim is not made within six years of the date on which the pension becomes due.
(6) Subsection (1) does not prevent forfeiture in prescribed circumstances.
(7) In this section and section 93, references to forfeiture include any manner of deprivation or suspension.
(1) Subject to subsection (2), section 92(1) does not prevent forfeiture of a person’s entitlement, or accrued right, to a pension under an occupational pension scheme by reference to the person having incurred some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or omission by the person.
(2) A person’s entitlement or accrued right to a pension may be forfeited by reason of subsection (1) to the extent only that it does not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person’s entitlement or accrued right to a pension under the scheme.
(3) Such forfeiture as is mentioned in subsection (1) must not take effect where there is a dispute as to the amount of the monetary obligation in question, unless the obligation has become enforceable under an order of a competent court or in consequence of an award of an arbitrator or, in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.
(4) Where a person’s entitlement or accrued right to a pension is forfeited by reason of subsection (1), the person must be given a certificate showing the amount forfeited and the effect of the forfeiture on his benefits under the scheme.
(5) Where such forfeiture as is mentioned in subsection (1) occurs, an amount not exceeding the amount forfeited may, if the trustees or managers of the scheme so determine, be paid to the employer.
(1) Regulations may—
(a) modify sections 91 to 93 in their application to public service pension schemes or to other schemes falling within a prescribed class or description, or
(b) provide that those sections do not apply in relation to schemes falling within a prescribed class or description.
(2) In those sections, “pension” in relation to an occupational pension scheme, includes any benefit under the scheme and any part of a pension and any payment by way of pension.
(3) In the application of sections 91 and 92 to Scotland—
(a) references to a charge are to be read as references to a right in security or a diligence and “charged” is to be interpreted accordingly,
(b) references to assignment are to be read as references to assignation and “assign” is to be interpreted accordingly,
(c) the reference to a person’s bankruptcy is to be read as a reference to the sequestration of his estate or the appointment on his estate of a judicial factor under section 41 of the [1980 c. 46.] Solicitors (Scotland) Act 1980,
(d) the reference to an income payments order under the [1986 c. 45.] Insolvency Act 1986 is to be read as a reference to an order under section 32(2) of the [1985 c. 66.] Bankruptcy (Scotland) Act 1985, and
(e) the reference to the making of a bankruptcy order is to be read as a reference to the award of sequestration or the making of the appointment of such a judicial factor.
(1) After section 342 of the Insolvency Act 1986 (adjustment of certain transactions entered into by individuals subsequently adjudged bankrupt), there is inserted—
(1) Where an individual is adjudged bankrupt and—
(a) he has during the relevant period made contributions as a member of an occupational pension scheme, or
(b) contributions have during the relevant period been made to such a scheme on his behalf,
the trustee of the bankrupt’s estate may apply to the court for an order under this section.
(2) If, on an application for an order under this section, the court is satisfied that the making of any of the contributions (“the excessive contributions”) has unfairly prejudiced the individual’s creditors, the court may make such order as it thinks fit for restoring the position to what it would have been if the excessive contributions had not been made.
(3) The court shall, in determining whether it is satisfied under subsection (2), consider in particular—
(a) whether any of the contributions were made by or on behalf of the individual for the purpose of putting assets beyond the reach of his creditors or any of them,
(b) whether the total amount of contributions made by or on behalf of the individual (including contributions made to any other occupational pension scheme) during the relevant period was excessive in view of the individual’s circumstances at the time when they were made, and
(c) whether the level of benefits under the scheme, together with benefits under any other occupational pension scheme, to which the individual is entitled, or is likely to become entitled, is excessive in all the circumstances of the case.
(1) Without prejudice to the generality of section 342A(2), an order under that section may include provision—
(a) requiring the trustees or managers of the scheme to pay an amount to the individual’s trustee in bankruptcy,
(b) reducing the amount of any benefit to which the individual (or his spouse, widow, widower or dependant) is entitled, or to which he has an accrued right, under the scheme,
(c) reducing the amount of any benefit to which, by virtue of any assignment, commutation or surrender of the individual’s entitlement (or that of his spouse, widow, widower or dependant) or accrued right under the scheme, another person is entitled or has an accrued right,
(d) otherwise adjusting the liabilities of the scheme in respect of any such person as is mentioned in paragraph (b) or (c).
(2) The maximum amount by which an order under section 342A may require the assets of an occupational pension scheme to be reduced is the lesser of—
(a) the amount of the excessive contributions, and
(b) the value (determined in the prescribed manner) of the assets of the scheme which represent contributions made by or on behalf of the individual.
(3) Subject to subsections (4) and (5), an order under section 342A must reduce the amount of the liabilities of the scheme by an amount equal to the amount of the reduction made in the value of the assets of the scheme.
(4) Subsection (3) does not apply where the individual’s entitlement or accrued right to benefits under the scheme which he acquired by virtue of the excessive contributions (his “excessive entitlement”) has been forfeited.
(5) Where part of the individual’s excessive entitlement has been forfeited, the amount of the reduction in the liabilities of the scheme required by subsection (3) is the value of the remaining part of his excessive entitlement.
(6) An order under section 342A in respect of an occupational pension scheme shall be binding on the trustees or managers of the scheme.
(1) Nothing in—
(a) any provision of section 159 of the Pension Schemes Act 1993 or section 91 of the Pensions Act 1995 (which prevent assignment, or orders being made restraining a person from receiving anything which he is prevented from assigning, and make provision in relation to a person’s pension on bankruptcy),
(b) any provision of any enactment (whether passed or made before or after the passing of the Pensions Act 1995) corresponding to any of the provisions mentioned in paragraph (a), or
(c) any provision of the scheme in question corresponding to any of those provisions,
applies to a court exercising its powers under section 342A.
(2) Where any sum is required by an order under section 342A to be paid to the trustee in bankruptcy, that sum shall be comprised in the bankrupt’s estate.
(3) Where contributions have been made during the relevant period to any occupational pension scheme and the entitlement or accrued right to benefits acquired thereby has been transferred to a second or subsequent occupational pension scheme (“the transferee scheme”), sections 342A and 342B and this section shall apply as though the contributions had been made to the transferee scheme.
(4) For the purposes of this section and sections 342A and 342B—
(a) contributions are made during the relevant period if—
(i) they are made by or on behalf of the individual at any time during the period of 5 years ending with the day of presentation of the bankruptcy petition on which the individual is adjudged bankrupt, or
(ii) they are made on behalf of the individual at any time during the period between the presentation of the petition and the commencement of the bankruptcy,
and
(b) the accrued rights of an individual under an occupational pension scheme at any time are the rights which have accrued to or in respect of him at that time to future benefits under the scheme.
(5) In this section and sections 342A and 342B—
“occupational pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993, and
“trustees or managers”, in relation to an occupational pension scheme, means—
in the case of a scheme established under a trust, the trustees of the scheme, and
in any other case, the managers of the scheme.”
(2) After section 36 of the [1985 c. 66.] Bankruptcy (Scotland) Act 1985 there is inserted—
(1) Where a debtor’s estate has been sequestrated and—
(a) he has during the relevant period made contributions as a member of an occupational pension scheme; or
(b) contributions have during the relevant period been made to such a scheme on his behalf;
the permanent trustee may apply to the court for an order under this section.
(2) If, on an application for an order under this section, the court is satisfied that the making of any of the contributions (“the excessive contributions”) has unfairly prejudiced the debtor’s creditors, the court may make such order as it thinks fit for restoring the position to what it would have been if the excessive contributions had not been made.
(3) The court shall, in determining whether it is satisfied under subsection (2) above, consider in particular—
(a) whether any of the contributions were made by or on behalf of the debtor for the purpose of putting assets beyond the reach of his creditors or any of them;
(b) whether the total amount of contributions made by or on behalf of the debtor (including contributions made to any other occupational pension scheme) during the relevant period was excessive in view of the debtor’s circumstances at the time when they were made; and
(c) whether the level of benefits under the scheme, together with benefits under any other occupational pension scheme, to which the debtor is entitled, or is likely to become entitled, is excessive in all the circumstances of the case.
(1) Without prejudice to the generality of subsection (2) of section 36A of this Act, an order under that section may include provision—
(a) requiring the trustees or managers of the scheme to pay an amount to the permanent trustee;
(b) reducing the amount of any benefit to which the debtor (or his spouse, widow, widower or dependant) is entitled, or to which he has an accrued right, under the scheme;
(c) reducing the amount of any benefit to which, by virtue of any assignation, commutation or surrender of the debtor’s entitlement (or that of his spouse, widow, widower or dependant) or accrued right under the scheme, another person is entitled or has an accrued right;
(d) otherwise adjusting the liabilities of the scheme in respect of any such person as is mentioned in paragraph (b) or (c) above.
(2) The maximum amount by which an order under section 36A of this Act may require the assets of an occupational pension scheme to be reduced is the lesser of—
(a) the amount of the excessive contributions; and
(b) the value (determined in the prescribed manner) of the assets of the scheme which represent contributions made by or on behalf of the debtor.
(3) Subject to subsections (4) and (5) below, an order under section 36A of this Act must reduce the amount of the liabilities of the scheme by an amount equal to the amount of the reduction made in the value of the assets of the scheme.
(4) Subsection (3) above does not apply where the debtor’s entitlement or accrued right to benefits under the scheme which he acquired by virtue of the excessive contributions (his “excessive entitlement”) has been forfeited.
(5) Where part of the debtor’s excessive entitlement has been forfeited, the amount of the reduction in the liabilities of the scheme required by subsection (3) above is the value of the remaining part of his excessive entitlement.
(6) An order under section 36A of this Act in respect of an occupational pension scheme shall be binding on the trustees or managers of the scheme.
(7) The court may, on the application of any person having an interest, review, rescind or vary an order under section 36A of this Act.
(1) Nothing in—
(a) any provision of section 159 of the Pension Schemes Act 1993 or 91 of the Pensions Act 1995 (which prevent assignation, or orders being made restraining a person from receiving anything which he is prevented from assigning, and make provision in relation to a person’s pension on sequestration);
(b) any provision of any enactment (whether passed or made before or after the passing of the Pensions Act 1995) corresponding to any of the provisions mentioned in paragraph (a) above; or
(c) any provision of the scheme in question corresponding to any of those provisions,
applies to a court exercising its powers under section 36A of this Act.
(2) Where any sum is required by an order under section 36A of this Act to be paid to the permanent trustee, that sum shall be comprised in the debtor’s estate.
(3) Where contributions have been made during the relevant period to any occupational pension scheme and the entitlement or accrued right to benefits acquired thereby has been transferred to a second or subsequent occupational pension scheme (“the transferee scheme”), sections 36A and 36B of this Act and this section shall apply as though the contributions had been made to the transferee scheme.
(4) For the purposes of this section and sections 36A and 36B of this Act—
(a) contributions are made during the relevant period if they are made at any time during the period of 5 years ending with the date of sequestration; and
(b) the accrued rights of a debtor under an occupational pension scheme at any time are the rights which have accrued to or in respect of him at that time to future benefits under the scheme.
(5) In this section and sections 36A and 36B of this Act—
“occupational pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993; and
“trustees or managers”, in relation to an occupational pension scheme, means—
in the case of a scheme established under a trust, the trustees of the scheme; and
in any other case, the managers of the scheme.”
(1) Subject to the following provisions of this section and to section 97, any determination by the Authority of a question which it is within their functions to determine shall be final.
(2) The Authority must, on the application of any person (“the applicant”) at any time within the prescribed period, review any determination of theirs—
(a) to make an order against the applicant under section 3,
(b) to require the applicant to pay a penalty under section 10 of this Act or section 168(4) of the [1993 c. 48.] Pension Schemes Act 1993, or
(c) to disqualify the applicant from being a trustee of any trust scheme under section 29(3) or (4).
Pensions Act 1995