Office of Public Sector Information
PART 5 continued
(9) If, immediately before the winding up period in relation to an occupational pension scheme to which section 73 applies, a person is entitled to an amount but has postponed payment of it, he is not, for the purposes of subsection (6), to be regarded as having become entitled to payment of the amount before that period.
(10) For the purposes of this section—
(a) “winding up provisions” means this section and sections 73, 73A and 74, and
(b) subsection (10) of section 73 applies as it applies for the purposes of that section.”
(2) In section 74 of the Pensions Act 1995 (c. 26) (discharge of liabilities by insurance, etc on winding up)—
(a) for subsection (1) substitute—
“(1) This section applies where an occupational pension scheme to which section 73 applies is being wound up.”,
(b) in subsection (2) omit “(including increases in pensions)”,
(c) in subsection (3), after paragraph (d) insert—
“(e) by the payment of a cash sum in circumstances where prescribed requirements are met.”,
(d) in subsection (4)—
(i) for “rules of the scheme” substitute “scheme rules”, and
(ii) omit “(including increases in pensions)”,
(e) omit subsection (5)(b) and the word “or” immediately preceding it, and
(f) after subsection (5) insert—
“(6) For the purposes of this section—
(a) references to assets of the scheme do not include any assets representing the value of any rights in respect of money purchase benefits under the scheme rules, and
(b) references to liabilities of the scheme do not include any liabilities in respect of money purchase benefits under the scheme rules;
and “scheme rules” has the same meaning as in the Pensions Act 2004 (see section 318 of that Act).”
(1) Section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the assets) is amended as follows.
(2) For subsections (1) to (4) substitute—
“(1) This section applies in relation to an occupational pension scheme other than a scheme which is—
(a) a money purchase scheme, or
(b) a prescribed scheme or a scheme of a prescribed description.
(2) If—
(a) at any time which falls—
(i) when a scheme is being wound up, but
(ii) before any relevant event in relation to the employer which occurs while the scheme is being wound up,
the value of the assets of the scheme is less than the amount at that time of the liabilities of the scheme, and
(b) the trustees or managers of the scheme designate that time for the purposes of this subsection (before the occurrence of an event within paragraph (a)(ii)),
an amount equal to the difference shall be treated as a debt due from the employer to the trustees or managers of the scheme.
This is subject to subsection (3).
(3) Subsection (2) applies only if—
(a) either—
(i) no relevant event within subsection (6A)(a) or (b) occurred in relation to the employer during the period beginning with the appointed day and ending with the commencement of the winding up of the scheme, or
(ii) during the period—
(a) beginning with the occurrence of the last such relevant event which occurred during the period mentioned in sub-paragraph (i), and
(b) ending with the commencement of the winding up of the scheme,
a cessation notice was issued in relation to the scheme and became binding, and
(b) no relevant event within subsection (6A)(c) has occurred in relation to the employer during the period mentioned in paragraph (a)(i).
(4) Where—
(a) immediately before a relevant event (“the current event”) occurs in relation to the employer the value of the assets of the scheme is less than the amount at that time of the liabilities of the scheme,
(b) the current event—
(i) occurred on or after the appointed day, and
(ii) did not occur in prescribed circumstances,
(c) if the scheme was being wound up immediately before that event, subsection (2) has not applied in relation to the scheme to treat an amount as a debt due from the employer to the trustees or managers of the scheme,
(d) if the current event is within subsection (6A)(a) or (b), either—
(i) no relevant event within subsection (6A)(a) or (b) occurred in relation to the employer during the period beginning with the appointed day and ending immediately before the current event, or
(ii) a cessation event has occurred in relation to the scheme in respect of a cessation notice issued during the period—
(a) beginning with the occurrence of the last such relevant event which occurred during the period mentioned in sub-paragraph (i), and
(b) ending immediately before the current event, and
(e) no relevant event within subsection (6A)(c) has occurred in relation to the employer during the period mentioned in paragraph (d)(i),
an amount equal to the difference shall be treated as a debt due from the employer to the trustees or managers of the scheme.
(4A) Where the current event is within subsection (6A)(a) or (b), the debt under subsection (4) is to be taken, for the purposes of the law relating to insolvency as it applies to the employer, to arise immediately before the occurrence of the current event.
(4B) Subsection (4C) applies if, in a case within subsection (4)—
(a) the current event is within subsection (6A)(a) or (b), and
(b) the scheme was not being wound up immediately before that event.
(4C) Where this subsection applies, the debt due from the employer under subsection (4) is contingent upon—
(a) a scheme failure notice being issued in relation to the scheme after the current event and the following conditions being satisfied—
(i) the scheme failure notice is binding,
(ii) no relevant event within subsection (6A)(c) has occurred in relation to the employer before the scheme failure notice became binding, and
(iii) a cessation event has not occurred in relation to the scheme in respect of a cessation notice issued during the period—
(a) beginning with the occurrence of the current event, and
(b) ending immediately before the issuing of the scheme failure notice,
and the occurrence of such a cessation event in respect of a cessation notice issued during that period is not a possibility, or
(b) the commencement of the winding up of the scheme before—
(i) any scheme failure notice or cessation notice issued in relation to the scheme becomes binding, or
(ii) any relevant event within subsection (6A)(c) occurs in relation to the employer.”
(3) In subsection (5) for “subsection (1)” substitute “subsections (2) and (4)”.
(4) In subsection (6)—
(a) after “scheme” insert “rules”, and
(b) at the end insert—
“In this subsection “scheme rules” has the same meaning as in the Pensions Act 2004 (“the 2004 Act”) (see section 318 of that Act).”
(5) After subsection (6) insert—
“(6A) For the purposes of this section, a relevant event occurs in relation to the employer in relation to an occupational pension scheme if and when—
(a) an insolvency event occurs in relation to the employer,
(b) the trustees or managers of the scheme make an application under subsection (1) of section 129 of the 2004 Act or receive a notice from the Board of the Pension Protection Fund under subsection (5)(a) of that section, or
(c) a resolution is passed for a voluntary winding up of the employer in a case where a declaration of solvency has been made under section 89 of the Insolvency Act 1986 (members' voluntary winding up).
(6B) For the purposes of this section—
(a) a “cessation notice”, in the case of a relevant event within subsection (6A)(a), means—
(i) a withdrawal notice issued under section 122(2)(b) of the 2004 Act (scheme rescue has occurred),
(ii) a withdrawal notice issued under section 148 of that Act (no insolvency event has occurred or is likely to occur),
(iii) a notice issued under section 122(4) of that Act (inability to confirm status of scheme) in a case where the notice has become binding and section 148 of that Act does not apply,
(b) a “cessation notice” in the case of a relevant event within subsection (6A)(b), means a withdrawal notice issued under section 130(3) of the 2004 Act (scheme rescue has occurred),
(c) a cessation event occurs in relation to a scheme when a cessation notice in relation to the scheme becomes binding,
(d) the occurrence of a cessation event in relation to a scheme in respect of a cessation notice issued during a particular period (“the specified period”) is a possibility until each of the following are no longer reviewable—
(i) any cessation notice which has been issued in relation to the scheme during the specified period,
(ii) any failure to issue such a cessation notice during the specified period,
(iii) any notice which has been issued by the Board under Chapter 2 or 3 of Part 2 of the 2004 Act which is relevant to the issue of a cessation notice in relation to the scheme during the specified period or to such a cessation notice which has been issued during that period becoming binding,
(iv) any failure to issue such a notice as is mentioned in sub-paragraph (iii),
(e) the issue or failure to issue a notice is to be regarded as reviewable—
(i) during the period within which it may be reviewed by virtue of Chapter 6 of Part 2 of the 2004 Act, and
(ii) if the matter is so reviewed, until—
(a) the review and any reconsideration,
(b) any reference to the Ombudsman for the Board of the Pension Protection Fund in respect of the matter, and
(c) any appeal against his determination or directions,
has been finally disposed of, and
(f) a “scheme failure notice” means a scheme failure notice issued under section 122(2)(a) or 130(2) of the 2004 Act (scheme rescue not possible).
(6C) For the purposes of this section—
(a) section 121 of the 2004 Act applies for the purposes of determining if and when an insolvency event has occurred in relation to the employer,
(b) “appointed day” means the day appointed under section 126(2) of the 2004 Act (no pension protection under Chapter 3 of Part 2 of that Act if the scheme begins winding up before the day appointed by the Secretary of State),
(c) references to a relevant event in relation to an employer do not include a relevant event which occurred in relation to him before he became the employer in relation to the scheme,
(d) references to a cessation notice becoming binding are to the notice in question mentioned in subsection (6B)(a) or (b) and issued under Part 2 of the 2004 Act becoming binding within the meaning given by that Part of that Act, and
(e) references to a scheme failure notice becoming binding are to the notice in question mentioned in subsection (6B)(f) and issued under Part 2 of the 2004 Act becoming binding within the meaning given by that Part of that Act.
(6D) Where—
(a) a resolution is passed for a voluntary winding up of the employer in a case where a declaration of solvency has been made under section 89 of the Insolvency Act 1986 (members' voluntary winding up), and
(b) either—
(i) the voluntary winding up of the employer is stayed other than in prescribed circumstances, or
(ii) a meeting of creditors is held in relation to the employer under section 95 of that Act (creditors' meeting which has the effect of converting a members' voluntary winding up into a creditors' voluntary winding up),
this section has effect as if that resolution had never been passed and any debt which arose under this section by virtue of the passing of that resolution shall be treated as if it had never arisen.”
(6) Omit subsection (9).
After section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the assets) insert—
(1) Regulations may modify section 75 (deficiencies in the assets) as it applies in relation to multi-employer schemes.
(2) The regulations may in particular provide for the circumstances in which a debt is to be treated as due under section 75 from an employer in relation to a multi-employer scheme (a “multi-employer debt”).
(3) Those circumstances may include circumstances other than those in which the scheme is being wound up or a relevant event occurs (within the meaning of section 75).
(4) For the purposes of regulations under this section, regulations under section 75(5) may prescribe alternative manners for determining, calculating and verifying—
(a) the liabilities and assets of the scheme to be taken into account, and
(b) their amount or value.
(5) The regulations under this section may in particular—
(a) provide for the application of each of the prescribed alternative manners under section 75(5) to depend upon whether prescribed requirements are met;
(b) provide that, where in a particular case a prescribed alternative manner under section 75(5) is applied, the Authority may in prescribed circumstances issue a direction—
(i) that any resulting multi-employer debt is to be unenforceable for such a period as the Authority may specify, and
(ii) that the amount of the debt is to be re-calculated applying a different prescribed manner under section 75(5) if prescribed requirements are met within that period.
(6) The prescribed requirements mentioned in subsection (5) may include a requirement that a prescribed arrangement, the details of which are approved in a notice issued by the Authority, is in place.
(7) The regulations may provide that the Authority may not approve the details of such an arrangement unless prescribed conditions are met.
(8) Those prescribed conditions may include a requirement that—
(a) the arrangement identifies one or more persons to whom the Authority may issue a contribution notice under the regulations, and
(b) the Authority are satisfied of prescribed matters in respect of each of those persons.
(9) For the purposes of subsection (8) a “contribution notice” is a notice stating that the person to whom it is issued is under a liability to pay the sum specified in the notice—
(a) to the trustees of the multi-employer scheme in question, or
(b) where the Board of the Pension Protection Fund has assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Pensions Act 2004 (pension protection), to the Board.
(10) The regulations may provide for the Authority to have power to issue a contribution notice to a person identified in an arrangement as mentioned in subsection (8) if—
(a) the arrangement ceases to be in place or the Authority consider that the arrangement is no longer appropriate, and
(b) the Authority are of the opinion that it is reasonable to impose liability on the person to pay the sum specified in the notice.
(11) Where a contribution notice is issued to a person under the regulations as mentioned in subsection (8), the sum specified in the notice is to be treated as a debt due from that person to the person to whom it is to be paid as specified in the notice.
(12) Where the regulations provide for the issuing of a contribution notice by the Authority as mentioned in subsection (8)—
(a) the regulations must—
(i) provide for how the sum specified by the Authority in a contribution notice is to be determined,
(ii) provide for the circumstances (if any) in which a person to whom a contribution notice is issued is jointly and severally liable for the debt,
(iii) provide for the matters which the notice must contain, and
(iv) provide for who may exercise the powers to recover the debt due by virtue of the contribution notice, and
(b) the regulations may apply with or without modifications some or all of the provisions of sections 47 to 51 of the Pensions Act 2004 (contribution notices where non-compliance with financial support direction) in relation to contribution notices issued under the regulations.
(13) In this section “multi-employer scheme” means a trust scheme which applies to earners in employments under different employers.
(14) This section is without prejudice to the powers conferred by—
section 75(5) (power to prescribe the manner of determining, calculating and verifying assets and liabilities etc),
section 75(10) (power to modify section 75 as it applies in prescribed circumstances),
section 118(1)(a) (power to modify any provisions of this Part in their application to multi-employer trust schemes), and
section 125(3) (power to extend for the purposes of this Part the meaning of “employer”).”
For section 50 of the Pensions Act 1995 (c. 26) (resolution of disputes) substitute—
(1) The trustees or managers of an occupational pension scheme must secure that dispute resolution arrangements are made and implemented.
(2) Dispute resolution arrangements are such arrangements as are required by this section for the resolution of pension disputes.
(3) For this purpose a pension dispute is a dispute which—
(a) is between—
(i) the trustees or managers of a scheme, and
(ii) one or more persons with an interest in the scheme (see section 50A),
(b) is about matters relating to the scheme, and
(c) is not an exempted dispute (see subsection (9)).
(4) The dispute resolution arrangements must provide a procedure—
(a) for any of the parties to the dispute mentioned in subsection (3)(a)(ii) to make an application for a decision to be taken on the matters in dispute (“an application for the resolution of a pension dispute”), and
(b) for the trustees or managers to take that decision.
(5) Where an application for the resolution of a pension dispute is made in accordance with the dispute resolution arrangements, the trustees or managers must—
(a) take the decision required on the matters in dispute within a reasonable period of the receipt of the application by them, and
(b) notify the applicant of the decision within a reasonable period of it having been taken.
(6) The procedure provided for by the dispute resolution arrangements must include the provision required by section 50B.
(7) Dispute resolution arrangements under subsection (1) must, in the case of existing schemes, have effect on and after the date of commencement of this section in relation to applications made on or after that date.
(8) This section does not apply in relation to an occupational pension scheme if—
(a) every member of the scheme is a trustee of the scheme,
(b) the scheme has no more than one member, or
(c) the scheme is of a prescribed description.
(9) For the purposes of this section a dispute is an exempted dispute if—
(a) proceedings in respect of it have been commenced in any court or tribunal,
(b) the Pensions Ombudsman has commenced an investigation in respect of it as a result of a complaint made or a dispute referred to him, or
(c) it is of a prescribed description.
(10) If, in the case of an occupational pension scheme, the dispute resolution arrangements required by this section to be made—
(a) have not been made, or
(b) are not being implemented,
section 10 applies to any of the trustees or managers who have failed to take all reasonable steps to secure that such arrangements are made or implemented.
(1) For the purposes of section 50 a person is a person with an interest in an occupational pension scheme if—
(a) he is a member of the scheme,
(b) he is a widow, widower or surviving dependant of a deceased member of the scheme,
(c) he is a surviving non-dependant beneficiary of a deceased member of the scheme,
(d) he is a prospective member of the scheme,
(e) he has ceased to be within any of the categories of persons referred to in paragraphs (a) to (d), or
(f) he claims to be such a person as is mentioned in paragraphs (a) to (e) and the dispute relates to whether he is such a person.
(2) In subsection (1)(c) a “non-dependant beneficiary”, in relation to a deceased member of an occupational pension scheme, means a person who, on the death of the member, is entitled to the payment of benefits under the scheme.
(3) In subsection (1)(d) a “prospective member” means any person who, under the terms of his contract of service or the rules of the scheme—
(a) is able, at his own option, to become a member of the scheme,
(b) will become so able if he continues in the same employment for a sufficiently long period,
(c) will be admitted to the scheme automatically unless he makes an election not to become a member, or
(d) may be admitted to it subject to the consent of his employer.
(1) The procedure provided for by the dispute resolution arrangements under section 50 must include the following provision.
(2) The procedure must provide that an application for the resolution of a pension dispute under section 50(4) may be made or continued on behalf of a person who is a party to the dispute mentioned in section 50(3)(a)(ii)—
(a) where the person dies, by his personal representative,
(b) where the person is a minor or is otherwise incapable of acting for himself, by a member of his family or some other person suitable to represent him, and
(c) in any other case, by a representative nominated by him.
(3) The procedure may include provision about the time limits for making an application for the resolution of a pension dispute but it must require that—
(a) in the case of a person with an interest in a scheme as mentioned in section 50A(1)(e), the time limit for making an application is the end of the period of six months beginning immediately after the date upon which he ceased to be a person with an interest as mentioned in section 50A(1)(a), (b), (c) or (d), and
(b) in the case of a person with an interest in a scheme as mentioned in section 50A(1)(f) who is claiming to be such a person as is mentioned in section 50A(1)(e), the time limit for making an application is the end of the period of six months beginning immediately after the date upon which he claims that he ceased to be a person with an interest as mentioned in section 50A(1)(a), (b), (c) or (d).
(4) The procedure must include provision about—
(a) the manner in which an application for the resolution of a pension dispute is to be made,
(b) the particulars which must be included in such an application, and
(c) the manner in which any decisions required are to be reached and given.
(5) The procedure must provide that if, after an application for the resolution of a pension dispute has been made, the dispute becomes an exempted dispute within the meaning of section 50(9)(a) or (b), the resolution of the dispute under the procedure ceases.”
(1) In subsection (2) of section 145 of the Pension Schemes Act 1993 (c. 48) (the Pensions Ombudsman) after “hold” insert “and vacate”.
(2) For subsection (3) of that section substitute—
“(3) The Pensions Ombudsman may resign or be removed from office in accordance with those terms and conditions.”
(3) After that section insert—
(1) The Secretary of State may appoint one or more persons to act as a deputy to the Pensions Ombudsman (“a Deputy Pensions Ombudsman”).
(2) Any such appointment is to be upon such terms and conditions as the Secretary of State thinks fit.
(3) A Deputy Pensions Ombudsman—
(a) is to hold and vacate office in accordance with the terms and conditions of his appointment, and
(b) may resign or be removed from office in accordance with those terms and conditions.
(4) A Deputy Pensions Ombudsman may perform the functions of the Pensions Ombudsman—
(a) during any vacancy in that office,
(b) at any time when the Pensions Ombudsman is for any reason unable to discharge his functions, or
(c) at any other time, with the consent of the Secretary of State.
(5) References to the Pensions Ombudsman in relation to the performance of his functions are accordingly to be construed as including references to a Deputy Pensions Ombudsman in relation to the performance of those functions.
(6) The Secretary of State may—
(a) pay to or in respect of a Deputy Pensions Ombudsman such amounts—
(i) by way of remuneration, compensation for loss of office, pension, allowances and gratuities, or
(ii) by way of provision for any such benefits,
as the Secretary of State may determine, and
(b) reimburse the Pensions Ombudsman in respect of any expenses incurred by a Deputy Pensions Ombudsman in the performance of any of the Pensions Ombudsman’s functions.”
(4) In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975 (c. 24) (other disqualifying offices), after “Pensions Ombudsman” insert “and any deputy to that Ombudsman appointed under section 145A of the Pension Schemes Act 1993”.
(5) In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (c. 25)(other disqualifying offices), at the appropriate place insert—
“Pensions Ombudsman and any deputy to that Ombudsman appointed under section 145A of the Pension Schemes Act 1993.”
(6) The persons to whom section 1 of the Superannuation Act 1972 (c. 11) (persons to or in respect of whom benefits may be provided by schemes under that section) applies are to include a deputy to the Pensions Ombudsman.
(7) The Pensions Ombudsman must pay to the Minister for the Civil Service, at such times as he may direct, such sums as he may determine in respect of the increase attributable to subsection (6) in the sums payable out of money provided by Parliament under that Act.
(8) The Pensions Ombudsman must also pay to the Minister for the Civil Service, at such times as he may direct, such sums as he may determine in respect of the amount payable out of money provided by Parliament under that Act which is attributable to the following persons being persons to whom section 1 of that Act applies—
(a) the Pensions Ombudsman;
(b) the employees of the Pensions Ombudsman.
Pensions Act 2004