Statutory Instrument 1999 No. 3147 (N.I. 11)

The Welfare Reform and Pensions (Northern Ireland) Order 1999

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STATUTORY INSTRUMENTS

1999 No. 3147 (N.I. 11)
NORTHERN IRELAND
The Welfare Reform and Pensions (Northern Ireland) Order 1999

	Made	24th November 1999
	Laid before Parliament	25th November 1999
	Coming into operation in accordance with Article 1

ARRANGEMENT OF ORDER

PART I
INTRODUCTORY

1.	Title and commencement.

2.	Interpretation.

PART II
STAKEHOLDER PENSION SCHEMES

3.	Meaning of "stakeholder pension scheme".

4.	Registration of stakeholder pension schemes.

5.	Duty of employers to facilitate access to stakeholder pension schemes.

6.	Obtaining information with respect to compliance with Article 5 and corresponding legislation in Great Britain.

7.	Powers of inspection for securing compliance with Article 5 and corresponding legislation in Great Britain.

8.	Application of certain statutory provisions.

9.	Interpretation and application of Part II.

PART III
PENSIONS: GENERAL Payments by employers to pension schemes

10.	Monitoring of employers' payments to personal pension schemes.

11.	Late payments by employers to occupational pension schemes.

Pensions and bankruptcy

12.	Effect of bankruptcy on pension rights: approved arrangements.

13.	Effect of bankruptcy on pension rights: unapproved arrangements.

14.	No forfeiture on bankruptcy of rights under pension schemes.

15.	Excessive pension contributions made by persons who have become bankrupt.

Miscellaneous

16.	Compensating occupational pension schemes.

17.	Miscellaneous amendments.

PART IV
PENSIONS ON DIVORCE ETC.

18.	Pension sharing orders.

19.	Amendments of Articles 27B to 27D of the Matrimonial Causes Order.

20.	Extension to overseas divorces etc.

Miscellaneous

21.	Supply of pension information in connection with divorce etc.

22.	Charges by pension arrangements in relation to earmarking orders.

23.	Interpretation of Part IV.

PART V
PENSION SHARING
CHAPTER I
SHARING OF RIGHTS UNDER PENSION ARRANGEMENTS Pension sharing mechanism

24.	Scope of mechanism.

25.	Activation of pension sharing.

26.	Creation of pension debits and credits.

27.	Cash equivalents.

Pension debits

28.	Reduction of benefit.

29.	Effect on contracted-out rights.

Pension credits

30.	Time for discharge of liability.

31.	"Implementation period".

32.	Mode of discharge of liability.

Treatment of pension credit rights under schemes

33.	Safeguarded rights.

34.	Requirements relating to pension credit benefit.

35.	Treatment in winding up.

Indexation

36.	Public service pension schemes.

37.	Other pension schemes.

Charges by pension arrangements

38.	Charges in respect of pension sharing costs.

Adaptation of statutory schemes

39.	Extension of scheme-making powers.

40.	Power to extend judicial pension schemes.

Supplementary

41.	Disapplication of restrictions on alienation.

42.	Information.

43.	Interpretation of Chapter I.

CHAPTER II
SHARING OF STATE SCHEME RIGHTS

44.	Shareable state scheme rights.

45.	Activation of benefit sharing.

46.	Creation of state scheme pension debits and credits.

47.	Effect of state scheme pension debits and credits.

48.	Interpretation of Chapter II.

PART VI
WELFARE
CHAPTER I
SOCIAL SECURITY BENEFITS Additional pensions

49.	Preservation of rights in respect of additional pensions.

State maternity allowance

50.	Extension of entitlement to state maternity allowance.

Benefits for widows and widowers

51.	Bereavement payments.

52.	New allowances for bereaved spouses.

53.	Entitlement to Category B retirement pension by reference to new allowances.

Work-focused interviews

54.	Claim or full entitlement to certain benefits conditional on work-focused interview.

55.	Optional work-focused interviews.

Jobseeker's allowance

56.	Couples to make joint claim for allowance.

57.	Special schemes for claimants for jobseeker's allowance.

Incapacity for work

58.	Incapacity for work: personal capability assessments.

Incapacity benefits

59.	Incapacity benefit: restriction to recent contributors.

60.	Incapacity benefit: reduction for pension payments.

61.	Incapacity benefit: persons incapacitated in youth.

62.	Abolition of severe disablement allowance.

Disability benefits

63.	Attendance allowance.

64.	Disability living allowance.

Miscellaneous

65.	Certain overpayments of benefit not to be recoverable.

66.	Child benefit: claimant to state national insurance number.

67.	Welfare benefits: miscellaneous amendments.

Supplementary

68.	Sharing of functions as regards claims and information.

69.	Supply of information for certain purposes.

CHAPTER II
OTHER WELFARE PROVISIONS

70.	Measures to reduce under-occupation by housing benefit claimants.

71.	Supply of information for child support purposes.

PART VII
GENERAL Miscellaneous

72.	Authorisation of certain expenditure.

Supplementary

73.	Regulations and orders.

74.	Consequential amendments etc.

75.	Transitional provisions.

Application of the Pension Schemes Act and the Pensions Order to registered schemes.

Schedule 2 -

Pensions: miscellaneous amendments.

Schedule 3 -

Pension sharing orders.

Schedule 4 -

Amendments of Articles 27B to 27D of the Matrimonial Causes Order.

Schedule 5 -

Pension credits: mode of discharge.

Schedule 6 -

Effect of state scheme pension debits and credits.

Schedule 7 -

Joint claims for jobseeker's allowance.

Schedule 8 -

Welfare benefits: minor and consequential amendments.

Part I -

Bereavement benefits.

Part II -

Incapacity

Part III -

Abolition of severe disablement allowance.

Part IV -

Income support.

Part V -

Jobseeker's allowance.

Administration of benefits.

Schedule 9 -

Consequential amendments.

Part I -

Amendments consequential on Parts IV and V.

Part II -

Other consequential amendments.

Schedule 10 -

Repeals.

Part I -

Pensions: Miscellaneous.

Part II -

Pensions on divorce etc.

Part III -

Pension sharing.

Part IV -

Abolition of severe disablement allowance.

Part V -

Benefits: Miscellaneous.

At the Court at Buckingham Palace, the 24th day of November 1999
Present,
The Queen's Most Excellent Majesty in Council
Whereas this Order is made only for purposes corresponding to those 1999 c. of the Welfare Reform and Pensions Act 1999:

     Now, therefore, Her Majesty, in exercise of the powers conferred by paragraph 1 of Schedule 1 to theNorthern Ireland Act 1974 (as modified by section 87 of the said Act of 1999) and of all other powers enabling Her in that behalf, is pleased, by and with the advice of Her Privy Council, to order, and it is hereby ordered, as follows: -

PART I
INTRODUCTORY
Title and commencement
     1. - (1) This Order may be cited as the Welfare Reform and Pensions (Northern Ireland) Order 1999.

    (2) Subject to the following provisions of this Article, this Order shall come into operation on such day or days as the Department may by order appoint.

    (3) The following provisions shall come into operation on such day or days as the Lord Chancellor may by order appoint -

(4) The following provisions come into operation on the seventh day after the day on which this Order is made -

(5) The following provisions come into operation on the seventh day after the day on which this Order is made, but for the purpose only of the exercise of any power to make regulations -

Interpretation
2. - (1) TheInterpretation Act (Northern Ireland) 1954 shall apply to Article 1 and the following provisions of this Order as it applies to a Measure of the Northern Ireland Assembly.

(2) In this Order -

"the Administration Act" means theSocial Security Administration (Northern Ireland) Act 1992;

"the Contributions and Benefits Act" means theSocial Security Contributions and Benefits (Northern Ireland) Act 1992;

"the Department" means the Department of Health and Social Services;

"government department" means a Northern Ireland department or a department of the government of the United Kingdom;

"the Housing Executive" means the Northern Ireland Housing Executive;

"the Matrimonial Causes Order" means theMatrimonial Causes (Northern Ireland) Order 1978;

"the Pension Schemes Act" means thePension Schemes (Northern Ireland) Act 1993;

"the Pensions Order" means thePensions (Northern Ireland) Order 1995;

"statutory provision" has the meaning assigned to it by section 1(f) of the Interpretation Act (Northern Ireland) 1954;

"the Welfare Reform Act" means the Welfare Reform and 1999 c. Pensions Act 1999.

(3) In this Order, except Articles 1, 74(2) and (3) and 75(1) and (5), and in any statutory provision amended by this Order, references to the coming into operation of any provision of this Order are to its coming into operation otherwise than for the purpose of authorising the making of regulations.

PART II
STAKEHOLDER PENSION SCHEMES
Meaning of "stakeholder pension scheme"
3. - (1) A pension scheme is a stakeholder pension scheme for the purposes of this Part if it is registered as such a scheme under Article 4 and each of the following is fulfilled, namely -

    (2) The first condition is that the scheme is established under a trust or in such other way as may be prescribed.

    (3) The second condition is that the provisions made by the instruments establishing the scheme comply with such requirements as may be prescribed.

    (4) The third condition is that, subject to such exceptions as may be prescribed, the benefits provided by the scheme are money purchase benefits within the meaning given by section 176 of the Pension Schemes Act.

    (5) The fourth condition is that the scheme complies with such requirements as may be prescribed as regards the extent to which, and the circumstances in which -

may be used to defray the administrative expenses of the scheme, to pay commission or in any other way which does not result in the provision of benefits for or in respect of members.

    (6) The fifth condition is that the scheme complies with such of the requirements of regulations under section 109 of the Pension Schemes Act (disclosure of information about schemes to members etc.) as are applicable to it.

    (7) The sixth condition is that, subject to such minimum contribution levels and other restrictions as may be prescribed, members of the scheme may make such contributions to the scheme as they think appropriate.

    (8) The seventh condition is that, except in so far as is necessary to ensure that the scheme has tax-exemption or tax-approval (within the meaning of the Pension Schemes Act), the scheme accepts transfer payments in respect of members' rights under -

    (9) The eighth condition is that the scheme has such exemption or approval as is mentioned in paragraph (8).

Registration of stakeholder pension schemes
     4. - (1) The Authority shall keep a register of stakeholder pension schemes.

    (2) Subject to paragraph (3), the Authority shall register a pension scheme under this Article if the trustees of the scheme, or any person or persons prescribed in relation to the scheme -

(a) make an application for the purpose and pay such fee as the Authority may determine; and

(b) declare that each of the following is fulfilled in relation to the scheme, namely -

(3) Where the Authority are satisfied on reasonable grounds that any of those conditions is not fulfilled in relation to a pension scheme, the Authority may -

(a) refuse to register the scheme; or

(b) where the scheme is registered under this Article, remove it from the register.

(4) Article 3 (prohibition orders) and Article 10 (civil penalties) of the Pensions Order apply to any trustee of a pension scheme which is or has been registered under this Article, and Article 10 of that Order applies to any person prescribed in relation to such a scheme, if -

(a) he fails to take all such steps as are reasonable to secure that each of those conditions is fulfilled in relation to the scheme or (as the case may be) while the scheme was so registered he failed to take all such steps as were reasonable to secure that each of those conditions was so fulfilled; or

(b) where the scheme was registered on his application, any of those conditions was not fulfilled in relation to the scheme at the time of the application.

(5) Any person who, in applying for registration of a pension scheme under this Article, knowingly or recklessly provides the Authority with information which is false or misleading in a material particular shall be liable -

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to imprisonment or a fine or both.

(6) The Department may by regulations make provision -

(a) for the register, or extracts from the register, or for copies of the register or of extracts from the register, to be open to inspection by, and

(b) for copies of the register, or of extracts from it, to be supplied to,

such persons, in such manner, at such times, on payment of such fees, and subject to such other terms and conditions, as may be prescribed.

Duty of employers to facilitate access to stakeholder pension schemes
5. - (1) Except in so far as regulations otherwise provide, it shall be the duty of an employer of relevant employees to comply with the requirements set out below.

(2) The first requirement is that the employer shall ensure that at all times there is at least one scheme designated by him for the purposes of this paragraph which is registered under Article 4 and offers membership to all his relevant employees (whether or not any other scheme registered under that Article which does not offer membership to all those employees is for the time being designated by him for those purposes).

Before designating a scheme for the purposes of this paragraph the employer shall consult with his relevant employees and any organisations representing them.

(3) The second requirement is that the employer shall supply his relevant employees with -

(a) the name and address of the designated scheme or, as the case may be, of each of the designated schemes; and

(b) such other information as may be prescribed.

(4) The third requirement is that the employer shall allow representatives of the designated scheme or schemes reasonable access to his relevant employees for the purpose of supplying them with information about the scheme or schemes.

(5) The fourth requirement is that, subject to such exceptions and qualifications as may be prescribed, the employer shall, if he is requested to do so by a relevant employee of his who is a member of a qualifying scheme -

(a) deduct the employee's contributions to the scheme from his remuneration; and

(b) pay them to the trustees or managers of the scheme or, if regulations so provide, to a prescribed person.

    (6) The fifth requirement is that the employer shall, if any scheme designated by him for the purposes of paragraph (2) ceases to be registered under Article 4, withdraw his designation of the scheme (but this requirement is not to be taken as implying that he cannot withdraw his designation of a scheme in other circumstances).

    (7) Article 10 of the Pensions Order (civil penalties) applies to an employer who fails to comply with any of the requirements set out above.

    (8) An employer is not, whether before designating a scheme for the purposes of paragraph (2) or at any time while a scheme is designated by him for those purposes, under any duty -

(a) to make any enquiries, or act on any information, about the scheme for any purpose not connected with -

(b) in particular, to investigate or monitor, or make any judgment as to, the past, present or future performance of the scheme.

(9) In this Article -

"employer" means any employer, whether or not resident or incorporated in any part of the United Kingdom;

"qualifying scheme", in relation to an employer, means -

(a) the designated scheme or one of the designated schemes; or

(b) if regulations so provide, any other stakeholder pension scheme;

"regulations" means regulations made by the Department;

"relevant employees", in relation to an employer, means all employees of his employed in Northern Ireland and also, in the case of an employer resident or incorporated in Northern Ireland, all employees of his employed outside the United Kingdom, but with the exception, in the case of any employer, of any employees of his -

(a) whose employment qualifies them for membership of an occupational pension scheme of the employer;

(b) whose earnings fall below the lower earnings limit as defined in section 176 of the Pension Schemes Act; or

(c) who are of such other description as may be prescribed.

Obtaining information with respect to compliance with Article 5 and corresponding legislation in Great Britain
6. - (1) Any person appearing to the Authority to be a person who holds, or is likely to hold, information which is relevant to the issue whether an employer is complying, or has complied, with the requirements under -

(a) Article 5, or

(b) section 3 of the Welfare Reform Act,

must, if required to do so by the Authority by notice in writing, produce any document which is so relevant.

    (2) To comply with paragraph (1) the document must be produced in such a manner, at such a place and within such a period as may be specified in the notice.

    (3) Article 98 of the Pensions Order shall have effect as if references to Article 96(1) or 97(1)(b) of that Order included references to paragraph (1) or Article 7(1)(b).

    (4) Articles 99 to 101 of that Order shall have effect as if references which are or include references to Article 96 or 97 of that Order included references to this Article or Article 7.

    (5) In this Article and Article 7 "document" includes information recorded in any form, and any reference to production of a document, in relation to information recorded otherwise than in legible form, is to producing a copy of the information in legible form.

Powers of inspection for securing compliance with Article 5 and corresponding legislation in Great Britain
     7. - (1) An inspector may, for the purposes of investigating whether an employer is complying, or has complied, with the requirements under Article 5 or section 3 of the Welfare Reform Act, at any reasonable time enter premises liable to inspection and, while there -

(a) may make such examination and inquiry as may be necessary for such purposes,

(b) may require any person on the premises to produce, or secure the production of, any document relevant to compliance with those requirements for his inspection, and

(c) may, as to any matter relevant to compliance with those requirements, examine, or require to be examined, either alone or in the presence of another person, any person on the premises whom he has reasonable cause to believe to be able to give information relevant to that matter.

(2) Premises are liable to inspection for the purposes of this Article if the inspector has reasonable grounds to believe that -

(a) employees of the employer are employed there,

(b) documents relevant to the administration of the employer's business are being kept there, or

(c) the administration of the employer's business, or work connected with that administration, is being carried out there,

unless the premises are a private dwelling-house not used by, or by permission of, the occupier for the purposes of a trade or business.

    (3) An inspector applying for admission to any premises for the purposes of this Article must, if so required, produce his certificate of appointment.

    (4) In this Article "inspector" means a person appointed by the Authority as an inspector.

Application of certain statutory provisions
     8. - (1) Articles 69 and 133 of theEmployment Rights (Northern Ireland) Order 1996 (occupational pension scheme trustees: protection from unfair dismissal and other detriment) shall apply in relation to an employee who is (or is a director of a company which is) a trustee of a scheme designated by his employer under Article 5(2) as they apply in relation to an employee who is (or is a director of a company which is) a trustee of a relevant occupational pension scheme which relates to his employment.

    (2) Article 86 of that Order (occupational pension scheme trustees: time off) shall apply to the employer in relation to a designated scheme as it applies to the employer in relation to a relevant occupational pension scheme.

    (3) Schedule 1 (application of the Pension Schemes Act and the Pensions Order to registered schemes) shall have effect.

    (4) In this Article "relevant occupational pension scheme" has the meaning given by Article 69 of the Employment Rights (Northern Ireland) Order 1996.

Interpretation and application of Part II
     9. - (1) In this Part -

"the Authority" means the Occupational Pensions Regulatory Authority;

"designated scheme" in relation to an employer, means a scheme designated by him for the purposes of Article 5(2);

"occupational pension scheme" and "personal pension scheme" have the meanings given by section 1 of the Pension Schemes Act;

"pension scheme" means an occupational pension scheme or a personal pension scheme;

"prescribed" means prescribed by regulations made by the Department;

"stakeholder pension scheme" shall be construed in accordance with Article 3.

(2) The Department may by regulations make provision for a stakeholder pension scheme which -

(a) is of a prescribed description, and

(b) would (apart from the regulations) be an occupational pension scheme,

to be treated for all purposes, or for such purposes as may be prescribed, as if it were a personal pension scheme and not an occupational pension scheme.

    (3) This Part applies to a pension scheme managed by or on behalf of the Crown as it applies to other pension schemes; and, accordingly, references in this Part to a person in his capacity as a trustee or manager of, or person prescribed in relation to, a pension scheme include the Crown, or a person acting on behalf of the Crown, in that capacity.

    (4) This Part applies to persons employed by or under the Crown in like manner as if such persons were employed by a private person; and references in this Part to a person in his capacity as an employer include the Crown, or a person acting on behalf of the Crown, in that capacity.

    (5) Paragraphs (3) and (4) do not apply to any provision of this Part under which a person may be prosecuted for an offence; but such a provision applies to persons in the public service of the Crown as it applies to other persons.

    (6) Nothing in this Part applies to Her Majesty in Her private capacity (within the meaning of theCrown Proceedings Act 1947).

PART III
PENSIONS: GENERAL
Payments by employers to pension schemes
Monitoring of employers' payments to personal pension schemes
10. In Part VI of the Pension Schemes Act (further requirements for protection of scheme members), after section 107 there shall be inserted -

" Monitoring of employers' payments to personal pension schemes.

107A.

- (1) This section applies where -

(2) In this section "direct payment arrangements" means arrangements under which contributions fall to be paid by or on behalf of the employer towards the scheme -

(3) The employer must secure that there is prepared, maintained and from time to time revised a record of the direct payment arrangements which complies with subsection (4).

(4) The record must -

    (5) The employer must, within the prescribed period after the preparation or any revision of the record, send a copy of the record or (as the case may be) of the revised record to the trustees or managers of the scheme.

    (6) Except in prescribed circumstances, the trustees or managers of the scheme must, where any contribution shown by the record to be payable under the direct payment arrangements has not been paid on or before its due date, give notice of that fact, within the prescribed period, to the Regulatory Authority and the employee.

    (7) The trustees or managers of the scheme must before the end of prescribed intervals send the employee a statement setting out the amounts and dates of the payments made under the direct payment arrangements during a prescribed period.

    (8) If -

Article 10 of the Pensions (Northern Ireland) Order 1995 (power of the Regulatory Authority to impose civil penalties) applies to the employer.

(9) If subsection (6) or (7) is not complied with, Article 10 of the Pensions (Northern Ireland) Order 1995 applies to any trustee or manager of the scheme who has failed to take all such steps as are reasonable to secure compliance.

(10) If -

Article 3 of the Pensions (Northern Ireland) Order 1995 (power of the Regulatory Authority to remove trustees) applies to any trustee of the scheme who has failed to take all such steps as are reasonable to secure compliance.

(11) A person shall not be required by virtue of subsection (8)(b) to pay a penalty under Article 10 of the Pensions (Northern Ireland) Order 1995 in respect of a failure if in respect of that failure he has been -

(12) A person is guilty of an offence if he is knowingly concerned in the fraudulent evasion of the direct payment arrangements so far as they are arrangements for the payment by him or any other person of any such contribution towards the scheme as is mentioned in subsection (2)(b).

(13) A person guilty of an offence under subsection (12) is liable -

(14) No prosecution shall be brought against the Crown for an offence under subsection (12), but that subsection applies to persons in the public service of the Crown as to other persons.

(15) In this section "due date", in relation to a contribution payable under the direct payment arrangements, means -

(16) Regulations may provide for this section to apply with such modifications as may be prescribed in a case where -

(17) Nothing in this section shall be taken as varying the provisions of the direct payment arrangements or as affecting their enforceability.

Obtaining information for purposes of section 107A and corresponding legislation in Great Britain.
107B. - (1) Any person appearing to the Regulatory Authority to be a person who holds, or is likely to hold, information which is relevant to the issue -

(a) whether any provision made by or under section 107A is being, or has been, complied with by an employer or the trustees or managers of a personal pension scheme,

(b) whether, in the case of any direct payment arrangements existing between an employee and his employer, there has been such a failure to pay a contribution as is mentioned in subsection (8)(b) of that section, or

(c) whether an offence has been committed under subsection (12) of that section in relation to any such arrangements,

must, if required to do so by the Regulatory Authority by notice in writing, produce any document which is so relevant.

(2) To comply with subsection (1) the document must be produced in such a manner, at such a place and within such a period as may be specified in the notice.

(3) An inspector may, for the purposes of investigating any of the matters set out in subsection (1)(a) to (c), at any reasonable time enter premises liable to inspection and, while there -

(a) may make such examination and inquiry as may be necessary for such purposes,

(b) may require any person on the premises to produce for his inspection, or secure the production for his inspection of, any document relevant -

(c) may, as to any matter so relevant, examine, or require to be examined, either alone or in the presence of another person, any person on the premises whom he has reasonable cause to believe to be able to give information relevant to that matter.

(4) An inspector applying for admission to any premises in pursuance of subsection (3) must, if so required, produce his certificate of appointment.

(5) For the purposes of subsection (3) premises are liable to inspection if the inspector has reasonable grounds to believe that -

(a) employees of the employer are employed there,

(b) documents relevant to the administration of -

unless the premises are a private dwelling-house not used by, or by permission of, the occupier for the purposes of a trade or business.

    (6) Article 98 of the Pensions (Northern Ireland) Order 1995 (warrants) shall have effect as if references to Article 96(1) or 97(1)(b) of that Order included references to subsection (1) or (3)(b).

    (7) Articles 99 to 101 of that Order (penalties, savings and reports) shall have effect as if references which are or include references to Article 96 or 97 of that Order included references to this section.

    (8) In this section -

"direct payment arrangements" has the same meaning as in section 107A;

"document" includes information recorded in any form, and any reference to production of a document, in relation to information recorded otherwise than in legible form, is to producing a copy of the information in legible form;

"inspector" means a person appointed by the Regulatory Authority as an inspector.

(9) References in this section to, or to any provision of, section 107A include references to corresponding provisions of legislation in Great Britain; and in this section as it has effect in relation to those corresponding provisions, "employee" and

"employer" have the same meaning as they have for the purposes of those provisions.".

Late payments by employers to occupational pension schemes
11. - (1) For Article 49(8) of the Pensions Order (offence where deduction from earnings not paid in timely fashion to occupational pension scheme) there shall be substituted -

" (8) Where on making a payment of any earnings in respect of any employment there is deducted any amount corresponding to any contribution payable on behalf of an active member of an occupational pension scheme, the amount deducted is to be paid, within a prescribed period, to the trustees or managers of the scheme.

(9) If in any case there is a failure to comply with paragraph (8) -

(10) If in any case paragraph (9)(b) is not complied with -

(11) If any person is knowingly concerned in the fraudulent evasion of the obligation imposed by paragraph (8) in any case, he is guilty of an offence.

(12) A person guilty of an offence under paragraph (11) is liable -

(13) A person shall not be required by virtue of paragraph (9)(a) to pay a penalty under Article 10 in respect of a failure if in respect of that failure he has been -

(2) In Article 86(3) of that Order (civil penalty where contributions by or on behalf of employer to occupational pension scheme not paid by due date) after "by or on behalf of the employer" there shall be inserted "on the employer's own account".

Pensions and bankruptcy
Effect of bankruptcy on pension rights: approved arrangements
12. - (1) Where a bankruptcy order is made against a person on a petition presented after the coming into operation of this Article, any rights of his under an approved pension arrangement are excluded from his estate.

(2) In this Article "approved pension arrangement" means -

(3) The reference in paragraph (1) to rights under an approved pension arrangement does not include rights under a personal pension scheme approved under Chapter IV of Part XIV of the Taxes Act unless those rights arise by virtue of approved personal pension arrangements.

(4) Paragraph (5) applies if -

(5) Any rights of that person under the scheme shall (without any conveyance, assignment or transfer) vest in his trustee in bankruptcy, as part of his estate, immediately on -

(6) Paragraph (7) applies if, at any time after a bankruptcy order is made against a person, the Commissioners of Inland Revenue give notice -

and the date specified as being that from which the approval is withdrawn ("the withdrawal date") is a date not later than that on which the bankruptcy order is made.

(7) Any rights of that person under the scheme or arising by virtue of the arrangements, and any rights of his under any related annuity, shall (without any conveyance, assignment or transfer) vest in his trustee in bankruptcy, as part of his estate, immediately on -

(8) In paragraph (7) "related annuity" means an annuity purchased on or after the withdrawal date for the purpose of giving effect to rights under the scheme or (as the case may be) to rights arising by virtue of the arrangements.

(9) Where under paragraph (5) or (7) any rights vest in a person's trustee in bankruptcy, the trustee's title to them has relation back to the commencement of the person's bankruptcy; but where any transaction is entered into by the trustees or managers of the scheme in question -

the trustee in bankruptcy is not in respect of that transaction entitled by virtue of this paragraph to any remedy against them or any person whose title to any property derives from them.

(10) Without prejudice to Article 73, regulations under paragraph (2)(h) may, in the case of any description of arrangements prescribed by the regulations, make provision corresponding to any provision made by paragraphs (4) to (9).

(11) In this Article -

"retirement benefits scheme" have the same meaning as in Chapter I of Part XIV of the Taxes Act;

(12) For the purposes of this Article a person shall be treated as having a right under an approved pension arrangement where -

Effect of bankruptcy on pension rights: unapproved arrangements
13. - (1) The Department may by regulations make provision for or in connection with enabling rights of a person under an unapproved pension arrangement to be excluded, in the event of a bankruptcy order being made against that person, from his estate within the meaning of Article 11 of theInsolvency (Northern Ireland) Order 1989.

(2) Regulations under this Article may, in particular, make provision -

(a) for rights under an unapproved pension arrangement to be excluded from a person's estate -

(b) for the court's decision whether to make such an order in relation to a person to be made by reference to -

(c) for the prescribed persons in the case of any pension arrangement to provide a person or his trustee in bankruptcy on request with information reasonably required by that person or trustee for or in connection with the making of such applications and agreements as are mentioned in sub-paragraph (a).

(3) In this Article -

"prescribed" means prescribed by regulations under this Article;

"qualifying agreement" means an agreement entered into in such circumstances, and satisfying such requirements, as may be prescribed;

"unapproved pension arrangement" means a pension arrangement which -

(a) is not an approved pension arrangement within the meaning of Article 12, and

(b) is of a prescribed description.

(4) For the purposes of this Article a person shall be treated as having a right under an unapproved pension arrangement where -

(a) he is entitled to a credit under Article 26(1)(b) as against the person responsible for the arrangement (within the meaning of Chapter I of Part V), and

(b) the person so responsible has not discharged his liability in respect of the credit.

No forfeiture on bankruptcy of rights under pension schemes
14. - (1) In the Pension Schemes Act, after section 155 there shall be inserted -

" No forfeiture on bankruptcy of rights under personal pension schemes.

155A.

- (1) A person's rights under a personal pension scheme cannot be forfeited by reference to his bankruptcy.

(2) For the purposes of this section -

(b) forfeiture shall be taken to include any manner of deprivation or suspension.".

(2) In Article 90(2) of the Pensions Order (exceptions to the rule preventing forfeiture of rights under occupational pension schemes), sub-paragraph (b) (which allows forfeiture of such rights by reference to a scheme member's bankruptcy) shall cease to have effect.

Excessive pension contributions made by persons who have become bankrupt
15. For Articles 315A to 315C of theInsolvency (Northern Ireland) Order 1989 there shall be substituted -

" Recovery of excessive pension contributions

315A.

- (1) Where an individual who is adjudged bankrupt -

the trustee of the bankrupt's estate may apply to the High Court for an order under this Article.

(2) If the High Court is satisfied -

the Court may make such order as it thinks fit for restoring the position to what it would have been had the excessive contributions not been made.

(3) Paragraph (4) applies where the High Court is satisfied that the value of the rights under the arrangement is, as a result of rights of the individual under the arrangement or any other pension arrangement having at any time become subject to a debit under Article 26(1)(a) of the Welfare Reform Order (debits giving effect to pension-sharing), less than it would otherwise have been.

(4) Where this paragraph applies -

(5) In paragraphs (2) to (4) "relevant contributions" means contributions to the arrangement or any other pension arrangement -

(6) The High Court shall, in determining whether it is satisfied under paragraph (2)(b), consider in particular -

is an amount which is excessive in view of the individual's circumstances when those contributions were made.

(7) For the purposes of this Article and Articles 315B and 315C ("the recovery provisions"), rights of an individual under an unapproved pension arrangement are excluded rights if they are rights which are excluded from his estate by virtue of regulations under Article 13 of the Welfare Reform Order.

(8) In the recovery provisions -

"approved pension arrangement" has the same meaning as in Article 12 of the Welfare Reform Order,

"unapproved pension arrangement" has the same meaning as in Article 13 of that Order.

Orders under Article 315A
315B. - (1) Without prejudice to the generality of Article 315A(2), an order under Article 315A may include provision -

(a) requiring the person responsible for the arrangement to pay an amount to the individual's trustee in bankruptcy,

(b) adjusting the liabilities of the arrangement in respect of the individual,

(c) adjusting any liabilities of the arrangement in respect of any other person that derive, directly or indirectly, from rights of the individual under the arrangement,

(d) for the recovery by the person responsible for the arrangement (whether by deduction from any amount which that person is ordered to pay or otherwise) of costs incurred by that person in complying in the bankrupt's case with any requirement under Article 315C(1) or in giving effect to the order.

    (2) In paragraph (1), references to adjusting the liabilities of the arrangement in respect of a person include (in particular) reducing the amount of any benefit or future benefit to which that person is entitled under the arrangement.

    (3) In paragraph (1)(c), the reference to liabilities of the arrangement does not include liabilities in respect of a person which result from giving effect to an order or provision falling within Article 25(1) of the Welfare Reform Order (pension sharing orders and agreements).

    (4) The maximum amount which the person responsible for an arrangement may be required to pay by an order under Article 315A is the lesser of -

(a) the amount of the excessive contributions, and

(b) the value of the individual's rights under the arrangement (if the arrangement is an approved pension arrangement) or of his excluded rights under the arrangement (if the arrangement is an unapproved pension arrangement).

(5) An order under Article 315A which requires the person responsible for an arrangement to pay an amount ("the restoration amount") to the individual's trustee in bankruptcy must provide for the liabilities of the arrangement to be correspondingly reduced.

(6) For the purposes of paragraph (5), liabilities are correspondingly reduced if the difference between -

(a) the amount of the liabilities immediately before the reduction, and

(b) the amount of the liabilities immediately after the reduction,

is equal to the restoration amount.

(7) An order under Article 315A in respect of an arrangement -

(a) shall be binding on the person responsible for the arrangement, and

(b) overrides provisions of the arrangement to the extent that they conflict with the provisions of the order.

Orders under Article 315A: supplementary
315C. - (1) The person responsible for -

(a) an approved pension arrangement under which a bankrupt has rights,

(b) an unapproved pension arrangement under which a bankrupt has excluded rights, or

(c) a pension arrangement under which a bankrupt has at any time had rights,

shall, on the bankrupt's trustee in bankruptcy making a written request, provide the trustee with such information about the arrangement and rights as the trustee may reasonably require for, or in connection with, the making of applications under Article 315A.

(2) Nothing in -

(a) any provision of section 155 of thePension Schemes (Northern Ireland) Act 1993 or Article 89 of thePensions (Northern Ireland) Order 1995 (which prevent assignment and the making of orders that restrain a person from receiving anything which he is prevented from assigning),

(b) any statutory provision (whether passed or made before or after the making of the Welfare Reform Order) corresponding to any of the provisions mentioned in sub-paragraph (a), or

(c) any provision of the arrangement in question corresponding to any of those provisions,

applies to the High Court exercising its powers under Article 315A.

(3) Where any sum is required by an order under Article 315A to be paid to the trustee in bankruptcy, that sum shall be comprised in the bankrupt's estate.

(4) Regulations may, for the purposes of the recovery provisions, make provision about the calculation and verification of -

(a) any such value as is mentioned in Article 315B(4)(b);

(b) any such amounts as are mentioned in Article 315B(6)(a) and (b).

(5) The power conferred by paragraph (4) includes power to provide for calculation or verification -

(a) in such manner as may, in the particular case, be approved by a prescribed person; or

(b) in accordance with guidance -

(6) References in the recovery provisions to the person responsible for a pension arrangement are to -

(a) the trustees, managers or provider of the arrangement, or

(b) the person having functions in relation to the arrangement corresponding to those of a trustee, manager or provider.

(7) In this Article and Articles 315A and 315B -

"the Department" means the Department of Health and Social Services;

"prescribed" means prescribed by regulations;

"the recovery provisions" means this Article and Articles 315A and 315B;

"regulations" means regulations made by the Department;

"the Welfare Reform Order" means the Welfare Reform and Pensions (Northern Ireland) Order 1999.

(8) Regulations under the recovery provisions may contain such incidental, supplemental and transitional provisions as appear to the Department necessary or expedient.

(9) Regulations under the recovery provisions shall be subject to negative resolution.".

Miscellaneous
Compensating occupational pension schemes
16. - (1) In paragraph (1)(d) of Article 79 of the Pensions Order (compensation not payable by the Pensions Compensation Board unless assets of salary related trust scheme worth less than 90 per cent. of its liabilities), for "90 per cent. of the amount of the liabilities of the scheme" there shall be substituted "the protection level".

(2) After paragraph (2) of that Article there shall be inserted -

and references in this paragraph to liabilities to, or in respect of, members of the scheme are references to liabilities in respect of pensions or other benefits.".

    (3) Article 81 of that Order (amount of compensation) shall be amended as follows.

    (4) In paragraph (3)(a) (compensation not to exceed 90 per cent. of shortfall), the words "90 per cent. of" shall be omitted.

    (5) In paragraph (3)(b) (compensation not to cause value of salary-related trust scheme's assets to exceed 90 per cent. of amount of its liabilities), for the words from "90 per cent." onwards there shall be substituted "the aggregate of the protected liabilities".

    (6) After paragraph (3) there shall be added -

and references in this paragraph to liabilities to, or in respect of, members of the scheme are to liabilities in respect of pensions or other benefits.".

Miscellaneous amendments
17. Schedule 2 (which contains amendments of the law relating to pensions) shall have effect.

PART IV
PENSIONS ON DIVORCE ETC.
Pension sharing orders
     18. Schedule 3 (which amends the Matrimonial Causes Order for the purpose of enabling the court to make pension sharing orders in connection with proceedings in Northern Ireland for divorce or nullity of marriage, and for supplementary purposes) shall have effect.

Amendments of Articles 27B to 27D of the Matrimonial Causes Order
     19. Schedule 4 (which amends the Articles about pensions inserted in the Matrimonial Causes Order by Article 162 of the Pensions Order) shall have effect.

Extension to overseas divorces etc.
     20. - (1) Part IV of theMatrimonial and Family Proceedings (Northern Ireland) Order 1989 (financial relief in Northern Ireland after overseas divorce etc.) shall be amended as follows.

    (2) In Article 22 (matters to which the court is to have regard in exercising its powers to make orders for financial relief), after paragraph (3) there shall be inserted -

(3) In that Article, at the end there shall be added -

(4) In Article 25 (application of provisions of Part III of the Matrimonial Causes Order), the existing provision shall become paragraph (1) and, in that paragraph, after sub-paragraph (b) there shall be inserted -

(5) In that Article, after paragraph (1) there shall be added -

Miscellaneous
Supply of pension information in connection with divorce etc.
21. - (1) The Department may by regulations -

(b) make provision about calculation and verification in relation to the valuation of -

(d) make provision for the purpose of enabling the person responsible for a pension arrangement to recover prescribed charges in respect of providing information in accordance with regulations under sub-paragraph (a).

    (2) Regulations under paragraph (1)(b) or (c) may include provision for calculation or verification in accordance with guidance from time to time prepared by a person prescribed by the regulations.

    (3) Regulations under paragraph (1)(d) may include provision for the application in prescribed circumstances, with or without modification, of any provision made by virtue of Article 38(2).

    (4) In paragraph (1) -

Charges by pension arrangements in relation to earmarking orders
22. The Department may by regulations make provision for the purpose of enabling the person responsible for a pension arrangement to recover prescribed charges in respect of complying with -

(a) an order under Article 25 of the Matrimonial Causes Order (financial provision orders in connection with divorce etc.), so far as it includes provision made by virtue of Article 27B or 27C of that Order (powers to include provisions about pensions),

(b) an order under section 23 of theMatrimonial Causes Act 1973, so far as it includes provision made by virtue of section 25B or 25C of that Act (England and Wales powers corresponding to those mentioned in paragraph (a)), or

(c) an order under section 12A(2) or (3) of theFamily Law (Scotland) Act 1985 (powers in relation to pensions lump sums when making a capital sum order).

Interpretation of Part IV
23. - (1) In this Part -

"occupational pension scheme" has the same meaning as in the Pension Schemes Act;

"pension arrangement" means -

(a) an occupational pension scheme,

(b) a personal pension scheme,

(c) a retirement annuity contract,

(d) an annuity or insurance policy purchased, or transferred, for the purpose of giving effect to rights under an occupational pension scheme or a personal pension scheme, and

(e) an annuity purchased, or entered into, for the purpose of discharging liability in respect of a pension credit under Article 26(1)(b) or under section 29(1)(b) of the Welfare Reform Act;

"personal pension scheme" has the same meaning as in the Pension Schemes Act;

"prescribed" means prescribed by regulations made by the Department;

"retirement annuity contract" means a contract or scheme approved under Chapter III of Part XIV of theIncome and Corporation Taxes Act 1988;

"trustees or managers", in relation to an occupational pension scheme or a personal pension scheme, means -

(a) in the case of a scheme established under a trust, the trustees of the scheme, and

(b) in any other case, the managers of the scheme.

(2) References to the person responsible for a pension arrangement are -

(a) in the case of an occupational pension scheme or a personal pension scheme, to the trustees or managers of the scheme,

(b) in the case of a retirement annuity contract or an annuity falling within paragraph (d) or (e) of the definition of "pension arrangement", the provider of the annuity, and

PART V
PENSION SHARING

CHAPTER I
SHARING OF RIGHTS UNDER PENSION ARRANGEMENTS
Pension sharing mechanism
Scope of mechanism
     24. - (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 Department.

    (3) For the purposes of paragraph (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 or the Department of Finance and Personnel as having responsibility for the scheme.

Activation of pension sharing
     25. - (1) Article 26 applies on the taking effect of any of the following relating to a person's shareable rights under a pension arrangement -

(2) The reference in paragraph (1) to paragraphs (a) to (g) of subsection (1) of section 28 of the Welfare Reform Act is to those paragraphs as they have effect subject to the provisions of that section and section 85(5) of that Act.

Creation of pension debits and credits
26. - (1) On the application of this Article -

(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 paragraph (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 paragraph (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 paragraphs (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 paragraphs (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 Department may by regulations provide for any description of benefit to be disregarded for the purposes of paragraph (4) or (5).

    (7) For the purposes of this Article, the valuation day is such day within the implementation period for the credit under paragraph (1)(b) as the person responsible for the relevant arrangement may specify by notice in writing to the transferor and transferee.

    (8) In this Article -

"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 Article 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.

Cash equivalents
27. - (1) The Department may by regulations make provision about the calculation and verification of cash equivalents for the purposes of Article 26.

(2) The power conferred by paragraph (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.

Pension debits

Reduction of benefit
28. - (1) Subject to paragraph (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 paragraphs (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 Article override any provision of a pension arrangement to which they apply to the extent that the provision conflicts with them.

    (5) In this Article -

"appropriate percentage", in relation to a pension debit, means -

(a) if the relevant order or provision specifies the percentage value to be transferred, that percentage;

(b) if the relevant order or provision specifies an amount to be transferred, the percentage which the appropriate amount for the purposes of paragraph (1) of Article 26 represents of the amount mentioned in paragraph (3)(b) of that Article;

"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.

Effect on contracted-out rights
29. - (1) The Pension Schemes Act shall be amended as follows.

(2) In section 6 (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 -

(3) After section 11 there shall be inserted -

" Reduction of guaranteed minimum in consequence of pension debit.

11A.

- (1) Where -

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 -

(4) In section 43 (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 42, 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 11A.".

(5) In section 176(1), there shall be inserted at the appropriate place -

" "pension debit" means a debit under Article 26(1)(a) of the Welfare Reform and Pensions (Northern Ireland) Order 1999;".

Pension credits
Time for discharge of liability
30. - (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 -

    (3) If trustees or managers to whom paragraph (2)(a) applies fail to perform the obligation imposed by that provision, Article 10 of the Pensions Order 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 Authority may extend the implementation period for the credit for the purposes of this Article if it is satisfied that the application is made in such circumstances as the Department may prescribe by regulations.

    (5) In this Article "the Authority" means the Occupational Pensions Regulatory Authority.

"Implementation period"
     31. - (1) For the purposes of this Chapter, the implementation period for a pension credit is the period of 4 months beginning with (and including) 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 -

(2) The reference in paragraph (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 section 28(1)(f) of the Welfare Reform Act, to documentary evidence that the agreement containing the provision is one to which subsection (3)(a) of that section applies.

(3) Paragraph (1) is subject to any provision made by regulations under Article 38(2)(a).

(4) The Department 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 Article 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 Article 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 Article -

"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.

Mode of discharge of liability
32. - (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 Department.

Treatment of pension credit rights under schemes

Safeguarded rights
33. After section 64 of the Pension Schemes Act there shall be inserted -

" PART IIIA
SAFEGUARDED RIGHTS
Safeguarded rights.

64A.

- (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 -

    (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 -

"reference rights", in relation to a pension credit, means the rights by reference to which the amount of the credit is determined.

Requirements relating to safeguarded rights.
64B. Regulations may prescribe requirements to be met in relation to safeguarded rights by an occupational pension scheme or a personal pension scheme.

Reserve powers in relation to non-complying schemes.
64C. - (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 64B 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 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 in a county court, as if it were an order of that court.

Power to control transfer or discharge of liability.
     64D. 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.".

Requirements relating to pension credit benefit
34. After section 97 of the Pension Schemes Act there shall be inserted -

" PART IVA
REQUIREMENTS RELATING TO PENSION CREDIT BENEFIT

CHAPTER I
PENSION CREDIT BENEFIT UNDER OCCUPATIONAL SCHEMES
Scope of Chapter I.

97A.

- (1) This Chapter applies to any occupational pension scheme whose resources are derived in whole or part from -

(2) This subsection applies to payments -

Interpretation.
97B. 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).

Basic principle as to pension credit benefit.
     97C. - (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.

Form of pension credit benefit and its alternatives.
     97D. - (1) Subject to subsection (2) and section 97E, 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.

Discharge of liability where pension credit or alternative benefits secured by insurance policies or annuity contracts.
97E. - (1) A transaction to which section 15 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.

CHAPTER II

TRANSFER VALUES
Power to give transfer notice.

97F.

- (1) An eligible member of a qualifying scheme may by notice in writing require the trustees or managers of the scheme to use an amount equal to the cash equivalent of his pension credit benefit for such one or more of the authorised purposes as he may specify in the notice.

(2) In the case of a member of an occupational pension scheme, the authorised purposes are -

(3) In the case of a member of a personal pension scheme, the authorised purposes are -

(4) The cash equivalent for the purposes of subsection (1) shall -

(5) The requirements which may be prescribed under subsection (2) or (3) include, in particular, requirements of the Inland Revenue.

(6) In subsections (2) and (3), references to an eligible scheme are to a scheme -

(7) In this Chapter, "transfer notice" means a notice under subsection (1).