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(1) Pension sharing is available under this Chapter in relation to a person’s shareable rights under any pension arrangement other than an excepted public service pension scheme.
(2) For the purposes of this Chapter, a person’s shareable rights under a pension arrangement are any rights of his under the arrangement, other than rights of a description specified by regulations made by the Secretary of State.
(3) For the purposes of subsection (1), a public service pension scheme is excepted if it is specified by order made by such Minister of the Crown or government department as may be designated by the Treasury as having responsibility for the scheme.
(1) Section 29 applies on the taking effect of any of the following relating to a person’s shareable rights under a pension arrangement—
(a) a pension sharing order under the [1973 c. 18.] Matrimonial Causes Act 1973,
(b) provision which corresponds to the provision which may be made by such an order and which—
(i) is contained in a qualifying agreement between the parties to a marriage, and
(ii) takes effect on the dissolution of the marriage under the [1996 c. 27.] Family Law Act 1996,
(c) provision which corresponds to the provision which may be made by such an order and which—
(i) is contained in a qualifying agreement between the parties to a marriage or former marriage, and
(ii) takes effect after the dissolution of the marriage under the [1996 c. 27.] Family Law Act 1996,
(d) an order under Part III of the [1984 c. 42.] Matrimonial and Family Proceedings Act 1984 (financial relief in England and Wales in relation to overseas divorce etc.) corresponding to such an order as is mentioned in paragraph (a),
(e) a pension sharing order under the [1985 c. 37.] Family Law (Scotland) Act 1985,
(f) provision which corresponds to the provision which may be made by such an order and which—
(i) is contained in a qualifying agreement between the parties to a marriage,
(ii) is in such form as the Secretary of State may prescribe by regulations, and
(iii) takes effect on the grant, in relation to the marriage, of decree of divorce under the [1976 c. 39.] Divorce (Scotland) Act 1976 or of declarator of nullity,
(g) an order under Part IV of the [1984 c. 42.] Matrimonial and Family Proceedings Act 1984 (financial relief in Scotland in relation to overseas divorce etc.) corresponding to such an order as is mentioned in paragraph (e),
(h) a pension sharing order under Northern Ireland legislation, and
(i) an order under Part IV of the [S.I. 1989/677 (N.I. 4).] Matrimonial and Family Proceedings (Northern Ireland) Order 1989 (financial relief in Northern Ireland in relation to overseas divorce etc.) corresponding to such an order as is mentioned in paragraph (h).
(2) For the purposes of subsection (1)(b) and (c), a qualifying agreement is one which—
(a) has been entered into in such circumstances as the Lord Chancellor may prescribe by regulations, and
(b) satisfies such requirements as the Lord Chancellor may so prescribe.
(3) For the purposes of subsection (1)(f), a qualifying agreement is one which—
(a) has been entered into in such circumstances as the Secretary of State may prescribe by regulations, and
(b) is registered in the Books of Council and Session.
(4) Subsection (1)(b) does not apply if—
(a) the pension arrangement to which the provision relates is the subject of a pension sharing order under the [1973 c. 18.] Matrimonial Causes Act 1973 in relation to the marriage, or
(b) there is in force a requirement imposed by virtue of section 25B or 25C of that Act (powers to include in financial provision orders requirements relating to benefits under pension arrangements) which relates to benefits or future benefits to which the party who is the transferor is entitled under the pension arrangement to which the provision relates.
(5) Subsection (1)(c) does not apply if—
(a) the marriage was dissolved by an order under section 3 of the [1996 c. 27.] Family Law Act 1996 (divorce not preceded by separation) and the satisfaction of the requirements of section 9(2) of that Act (settlement of future financial arrangements) was a precondition to the making of the order,
(b) the pension arrangement to which the provision relates—
(i) is the subject of a pension sharing order under the [1973 c. 18.] Matrimonial Causes Act 1973 in relation to the marriage, or
(ii) has already been the subject of pension sharing between the parties, or
(c) there is in force a requirement imposed by virtue of section 25B or 25C of that Act which relates to benefits or future benefits to which the party who is the transferor is entitled under the pension arrangement to which the provision relates.
(6) Subsection (1)(f) does not apply if there is in force an order under section 12A(2) or (3) of the [1985 c. 37.] Family Law (Scotland) Act 1985 which relates to benefits or future benefits to which the party who is the transferor is entitled under the pension arrangement to which the provision relates.
(7) For the purposes of this section, an order or provision falling within subsection (1)(e), (f) or (g) shall be deemed never to have taken effect if the person responsible for the arrangement to which the order or provision relates does not receive before the end of the period of 2 months beginning with the relevant date—
(a) copies of the relevant matrimonial documents, and
(b) such information relating to the transferor and transferee as the Secretary of State may prescribe by regulations under section 34(1)(b)(ii).
(8) The relevant date for the purposes of subsection (7) is—
(a) in the case of an order or provision falling within subsection (1)(e) or (f), the date of the extract of the decree or declarator responsible for the divorce or annulment to which the order or provision relates, and
(b) in the case of an order falling within subsection (1)(g), the date of disposal of the application under section 28 of the [1984 c. 42.] Matrimonial and Family Proceedings Act 1984.
(9) The reference in subsection (7)(a) to the relevant matrimonial documents is—
(a) in the case of an order falling within subsection (1)(e) or (g), to copies of the order and the order, decree or declarator responsible for the divorce or annulment to which it relates, and
(b) in the case of provision falling within subsection (1)(f), to—
(i) copies of the provision and the order, decree or declarator responsible for the divorce or annulment to which it relates, and
(ii) documentary evidence that the agreement containing the provision is one to which subsection (3)(a) applies.
(10) The sheriff may, on the application of any person having an interest, make an order—
(a) extending the period of 2 months referred to in subsection (7), and
(b) if that period has already expired, providing that, if the person responsible for the arrangement receives the documents and information concerned before the end of the period specified in the order, subsection (7) is to be treated as never having applied.
(11) In subsections (4)(b), (5)(c) and (6), the reference to the party who is the transferor is to the party to whose rights the provision relates.
(1) On the application of this section—
(a) the transferor’s shareable rights under the relevant arrangement become subject to a debit of the appropriate amount, and
(b) the transferee becomes entitled to a credit of that amount as against the person responsible for that arrangement.
(2) Where the relevant order or provision specifies a percentage value to be transferred, the appropriate amount for the purposes of subsection (1) is the specified percentage of the cash equivalent of the relevant benefits on the valuation day.
(3) Where the relevant order or provision specifies an amount to be transferred, the appropriate amount for the purposes of subsection (1) is the lesser of—
(a) the specified amount, and
(b) the cash equivalent of the relevant benefits on the valuation day.
(4) Where the relevant arrangement is an occupational pension scheme and the transferor is in pensionable service under the scheme on the transfer day, the relevant benefits for the purposes of subsections (2) and (3) are the benefits or future benefits to which he would be entitled under the scheme by virtue of his shareable rights under it had his pensionable service terminated immediately before that day.
(5) Otherwise, the relevant benefits for the purposes of subsections (2) and (3) are the benefits or future benefits to which, immediately before the transfer day, the transferor is entitled under the terms of the relevant arrangement by virtue of his shareable rights under it.
(6) The Secretary of State may by regulations provide for any description of benefit to be disregarded for the purposes of subsection (4) or (5).
(7) For the purposes of this section, the valuation day is such day within the implementation period for the credit under subsection (1)(b) as the person responsible for the relevant arrangement may specify by notice in writing to the transferor and transferee.
(8) In this section—
“relevant arrangement” means the arrangement to which the relevant order or provision relates;
“relevant order or provision” means the order or provision by virtue of which this section applies;
“transfer day” means the day on which the relevant order or provision takes effect;
“transferor” means the person to whose rights the relevant order or provision relates;
“transferee” means the person for whose benefit the relevant order or provision is made.
(1) The Secretary of State may by regulations make provision about the calculation and verification of cash equivalents for the purposes of section 29.
(2) The power conferred by subsection (1) includes power to provide for calculation or verification—
(a) in such manner as may, in the particular case, be approved by a person prescribed by the regulations, or
(b) in accordance with guidance from time to time prepared by a person so prescribed.
(1) Subject to subsection (2), where a person’s shareable rights under a pension arrangement are subject to a pension debit, each benefit or future benefit—
(a) to which he is entitled under the arrangement by virtue of those rights, and
(b) which is a qualifying benefit,
is reduced by the appropriate percentage.
(2) Where a pension debit relates to the shareable rights under an occupational pension scheme of a person who is in pensionable service under the scheme on the transfer day, each benefit or future benefit—
(a) to which the person is entitled under the scheme by virtue of those rights, and
(b) which corresponds to a qualifying benefit,
is reduced by an amount equal to the appropriate percentage of the corresponding qualifying benefit.
(3) A benefit is a qualifying benefit for the purposes of subsections (1) and (2) if the cash equivalent by reference to which the amount of the pension debit is determined includes an amount in respect of it.
(4) The provisions of this section override any provision of a pension arrangement to which they apply to the extent that the provision conflicts with them.
(5) In this section—
“appropriate percentage”, in relation to a pension debit, means—
if the relevant order or provision specifies the percentage value to be transferred, that percentage;
if the relevant order or provision specifies an amount to be transferred, the percentage which the appropriate amount for the purposes of subsection (1) of section 29 represents of the amount mentioned in subsection (3)(b) of that section;
“relevant order or provision”, in relation to a pension debit, means the pension sharing order or provision on which the debit depends;
“transfer day”, in relation to a pension debit, means the day on which the relevant order or provision takes effect.
(1) The [1993 c. 48.] Pension Schemes Act 1993 shall be amended as follows.
(2) In section 10 (protected rights), in subsection (1), for “subsections (2) and (3)” there shall be substituted “the following provisions of this section”, and at the end there shall be added—
“(4) Where, in the case of a scheme which makes such provision as is mentioned in subsection (2) or (3), a member’s rights under the scheme become subject to a pension debit, his protected rights shall exclude the appropriate percentage of the rights which were his protected rights immediately before the day on which the pension debit arose.
(5) For the purposes of subsection (4), the appropriate percentage is—
(a) if the order or provision on which the pension debit depends specifies the percentage value to be transferred, that percentage;
(b) if the order or provision on which the pension debit depends specifies an amount to be transferred, the percentage which the appropriate amount for the purposes of subsection (1) of section 29 of the Welfare Reform and Pensions Act 1999 (lesser of specified amount and cash equivalent of transferor’s benefits) represents of the amount mentioned in subsection (3)(b) of that section (cash equivalent of transferor’s benefits).”
(3) After section 15 there shall be inserted—
(1) Where—
(a) an earner has a guaranteed minimum in relation to the pension provided by a scheme, and
(b) his right to the pension becomes subject to a pension debit,
his guaranteed minimum in relation to the scheme is, subject to subsection (2), reduced by the appropriate percentage.
(2) Where the earner is in pensionable service under the scheme on the day on which the order or provision on which the pension debit depends takes effect, his guaranteed minimum in relation to the scheme is reduced by an amount equal to the appropriate percentage of the corresponding qualifying benefit.
(3) For the purposes of subsection (2), the corresponding qualifying benefit is the guaranteed minimum taken for the purpose of calculating the cash equivalent by reference to which the amount of the pension debit is determined.
(4) For the purposes of this section the appropriate percentage is—
(a) if the order or provision on which the pension debit depends specifies the percentage value to be transferred, that percentage;
(b) if the order or provision on which the pension debit depends specifies an amount to be transferred, the percentage which the appropriate amount for the purposes of subsection (1) of section 29 of the Welfare Reform and Pensions Act 1999 (lesser of specified amount and cash equivalent of transferor’s benefits) represents of the amount mentioned in subsection (3)(b) of that section (cash equivalent of transferor’s benefits).”
(4) In section 47 (entitlement to guaranteed minimum pensions for the purposes of the relationship with social security benefits), at the end there shall be added—
“(6) For the purposes of section 46, a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled but for any reduction under section 15A.”
(5) In section 181(1), there shall be inserted at the appropriate place—
““pension debit” means a debit under section 29(1)(a) of the Welfare Reform and Pensions Act 1999;”.
(1) A person subject to liability in respect of a pension credit shall discharge his liability before the end of the implementation period for the credit.
(2) Where the trustees or managers of an occupational pension scheme have not done what is required to discharge their liability in respect of a pension credit before the end of the implementation period for the credit—
(a) they shall, except in such cases as the Secretary of State may prescribe by regulations, notify the Regulatory Authority of that fact within such period as the Secretary of State may so prescribe, and
(b) section 10 of the [1995 c. 26.] Pensions Act 1995 (power of the Regulatory Authority to impose civil penalties) shall apply to any trustee or manager who has failed to take all such steps as are reasonable to ensure that liability in respect of the credit was discharged before the end of the implementation period for it.
(3) If trustees or managers to whom subsection (2)(a) applies fail to perform the obligation imposed by that provision, section 10 of the [1995 c. 26.] Pensions Act 1995 shall apply to any trustee or manager who has failed to take all reasonable steps to ensure that the obligation was performed.
(4) On the application of the trustees or managers of an occupational pension scheme who are subject to liability in respect of a pension credit, the Regulatory Authority may extend the implementation period for the credit for the purposes of this section if it is satisfied that the application is made in such circumstances as the Secretary of State may prescribe by regulations.
(5) In this section “the Regulatory Authority” means the Occupational Pensions Regulatory Authority.
(1) For the purposes of this Chapter, the implementation period for a pension credit is the period of 4 months beginning with the later of—
(a) the day on which the relevant order or provision takes effect, and
(b) the first day on which the person responsible for the pension arrangement to which the relevant order or provision relates is in receipt of—
(i) the relevant matrimonial documents, and
(ii) such information relating to the transferor and transferee as the Secretary of State may prescribe by regulations.
(2) The reference in subsection (1)(b)(i) to the relevant matrimonial documents is to copies of—
(a) the relevant order or provision, and
(b) the order, decree or declarator responsible for the divorce or annulment to which it relates,
and, if the pension credit depends on provision falling within subsection (1)(f) of section 28, to documentary evidence that the agreement containing the provision is one to which subsection (3)(a) of that section applies.
(3) Subsection (1) is subject to any provision made by regulations under section 41(2)(a).
(4) The Secretary of State may by regulations—
(a) make provision requiring a person subject to liability in respect of a pension credit to notify the transferor and transferee of the day on which the implementation period for the credit begins;
(b) provide for this section to have effect with modifications where the pension arrangement to which the relevant order or provision relates is being wound up;
(c) provide for this section to have effect with modifications where the pension credit depends on a pension sharing order and the order is the subject of an application for leave to appeal out of time.
(5) In this section—
“relevant order or provision”, in relation to a pension credit, means the pension sharing order or provision on which the pension credit depends;
“transferor” means the person to whose rights the relevant order or provision relates;
“transferee” means the person for whose benefit the relevant order or provision is made.
(1) Schedule 5 (which makes provision about how liability in respect of a pension credit may be discharged) shall have effect.
(2) Where the person entitled to a pension credit dies before liability in respect of the credit has been discharged—
(a) Schedule 5 shall cease to have effect in relation to the discharge of liability in respect of the credit, and
(b) liability in respect of the credit shall be discharged in accordance with regulations made by the Secretary of State.
After section 68 of the [1993 c. 48.] Pension Schemes Act 1993 there shall be inserted—
(1) Subject to subsection (2), the safeguarded rights of a member of an occupational pension scheme or a personal pension scheme are such of his rights to future benefits under the scheme as are attributable (directly or indirectly) to a pension credit in respect of which the reference rights are, or include, contracted-out rights or safeguarded rights.
(2) If the rules of an occupational pension scheme or a personal pension scheme so provide, a member’s safeguarded rights are such of his rights falling within subsection (1) as—
(a) in the case of rights directly attributable to a pension credit, represent the safeguarded percentage of the rights acquired by virtue of the credit, and
(b) in the case of rights directly attributable to a transfer payment, represent the safeguarded percentage of the rights acquired by virtue of the payment.
(3) For the purposes of subsection (2)(a), the safeguarded percentage is the percentage of the rights by reference to which the amount of the credit is determined which are contracted-out rights or safeguarded rights.
(4) For the purposes of subsection (2)(b), the safeguarded percentage is the percentage of the rights in respect of which the transfer payment is made which are contracted-out rights or safeguarded rights.
(5) In this section—
“contracted-out rights” means such rights under, or derived from—
an occupational pension scheme contracted-out by virtue of section 9(2) or (3), or
an appropriate personal pension scheme,
as may be prescribed;
“reference rights”, in relation to a pension credit, means the rights by reference to which the amount of the credit is determined.
Regulations may prescribe requirements to be met in relation to safeguarded rights by an occupational pension scheme or a personal pension scheme.
(1) This section applies to—
(a) any occupational pension scheme, other than a public service pension scheme, and
(b) any personal pension scheme.
(2) If any scheme to which this section applies does not comply with a requirement prescribed under section 68B and there are any persons who—
(a) have safeguarded rights under the scheme, or
(b) are entitled to any benefit giving effect to such rights under the scheme,
the Inland Revenue may direct the trustees or managers of the scheme to take or refrain from taking such steps as they may specify in writing for the purpose of safeguarding the rights of persons falling within paragraph (a) or (b).
(3) A direction under subsection (2) shall be final and binding on the trustees or managers to whom the direction is given and any person claiming under them.
(4) An appeal on a point of law shall lie to the High Court or, in Scotland, the Court of Session from a direction under subsection (2) at the instance of the trustees or managers, or any person claiming under them.
(5) A direction under subsection (2) shall be enforceable—
(a) in England and Wales, in a county court, as if it were an order of that court, and
(b) in Scotland, by the sheriff, as if it were an order of the sheriff and whether or not the sheriff could himself have given such an order.
Regulations may prohibit or restrict the transfer or discharge of any liability under an occupational pension scheme or a personal pension scheme in respect of safeguarded rights except in prescribed circumstances or on prescribed conditions.”
After section 101 of the [1993 c. 48.] Pension Schemes Act 1993 there shall be inserted—
(1) This Chapter applies to any occupational pension scheme whose resources are derived in whole or part from—
(a) payments to which subsection (2) applies made or to be made by one or more employers of earners to whom the scheme applies, or
(b) such other payments by the earner or his employer, or both, as may be prescribed for different categories of scheme.
(2) This subsection applies to payments—
(a) under an actual or contingent legal obligation, or
(b) in the exercise of a power conferred, or the discharge of a duty imposed, on a Minister of the Crown, government department or any other person, being a power or duty which extends to the disbursement or allocation of public money.
In this Chapter—
“scheme” means an occupational pension scheme to which this Chapter applies;
“pension credit rights” means rights to future benefits under a scheme which are attributable (directly or indirectly) to a pension credit;
“pension credit benefit”, in relation to a scheme, means the benefits payable under the scheme to or in respect of a person by virtue of rights under the scheme attributable (directly or indirectly) to a pension credit;
“normal benefit age”, in relation to a scheme, means the earliest age at which a person who has pension credit rights under the scheme is entitled to receive a pension by virtue of those rights (disregarding any scheme rule making special provision as to early payment of pension on grounds of ill-health or otherwise).
(1) Normal benefit age under a scheme must be between 60 and 65.
(2) A scheme must not provide for payment of pension credit benefit in the form of a lump sum at any time before normal benefit age, except in such circumstances as may be prescribed.
(1) Subject to subsection (2) and section 101E, a person’s pension credit benefit under a scheme must be—
(a) payable directly out of the resources of the scheme, or
(b) assured to him by such means as may be prescribed.
(2) Subject to subsections (3) and (4), a scheme may, instead of providing a person’s pension credit benefit, provide—
(a) for his pension credit rights under the scheme to be transferred to another occupational pension scheme or a personal pension scheme with a view to acquiring rights for him under the rules of the scheme, or
(b) for such alternatives to pension credit benefit as may be prescribed.
(3) The option conferred by subsection (2)(a) is additional to any obligation imposed by Chapter II of this Part.
(4) The alternatives specified in subsection (2)(a) and (b) may only be by way of complete or partial substitute for pension credit benefit—
(a) if the person entitled to the benefit consents, or
(b) in such other cases as may be prescribed.
(1) A transaction to which section 19 applies discharges the trustees or managers of a scheme from their liability to provide pension credit benefit or any alternative to pension credit benefit for or in respect of a member of the scheme if and to the extent that—
(a) it results in pension credit benefit, or any alternative to pension credit benefit, for or in respect of the member being appropriately secured (within the meaning of that section),
(b) the transaction is entered into with the consent of the member or, if the member has died, of the member’s widow or widower, and
(c) such requirements as may be prescribed are met.
(2) Regulations may provide that subsection (1)(b) shall not apply in prescribed circumstances.
Welfare Reform and Pensions Act 1999