Pensions Act 2004 (c. 35)

(The document as of February, 2008)

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(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),

(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

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).

272 Debt due from the employer in the case of multi-employer schemes

After section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the assets) insert--

" 75A Deficiencies in the assets: multi-employer schemes

(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"). "

Pension disputes

273 Resolution of disputes

For section 50 of the Pensions Act 1995 (c. 26) (resolution of disputes) substitute--

" 50 Requirement for dispute resolution arrangements

(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

(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

(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

(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.

50A Meaning of "person with an interest in the scheme"

(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,

(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,

(d) may be admitted to it subject to the consent of his employer.

50B The dispute resolution procedure

(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

(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

(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. "

The Pensions Ombudsman

274 The Pensions Ombudsman and Deputy Pensions Ombudsmen

(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--

" 145A Deputy Pensions Ombudsmen

(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

(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.

275 Jurisdiction

(1) After section 146(4) of the Pension Schemes Act 1993 (c. 48) (power to apply Part 10 of that Act to those concerned with the administration of a scheme) insert--

" (4A) For the purposes of subsection (4) a person or body of persons is concerned with the administration of an occupational or personal pension scheme where the person or body is responsible for carrying out an act of administration concerned with the scheme. "

(2) The amendment made by this section has effect in relation to the making of any provision under section 146(4) of the Pension Schemes Act 1993 applying Part 10 of that Act in relation to a complaint or a dispute in so far as it relates to a matter which arises on or after the day on which this section comes into force.

(3) For the purposes of subsection (2), a question falling within section 146(1)(g) of the Pension Schemes Act 1993 is to be treated as a dispute.

276 Investigations

(1) Omit section 54 of the Child Support, Pensions and Social Security Act 2000 (c. 19) ("the 2000 Act") (which amends sections 148, 149 and 151 of the Pension Schemes Act 1993 and which has not been brought into force except for the purpose of making regulations and rules).

(2) Omit the following provisions of the Pension Schemes Act 1993--

(a) section 148(5)(ba) and (bb) as inserted by section 54(2) of the 2000 Act,

(b) section 149(1), (1A) and (1B) as substituted by section 54(3) of the 2000 Act,

(d) section 149(3)(d) and the word "and" immediately preceding it as inserted by section 54(5) of the 2000 Act,

(e) section 149(8) as inserted by section 54(6) of the 2000 Act,

(f) section 151(1)(c) and the word "and" immediately preceding it as inserted by section 54(7) of the 2000 Act,

(g) section 151(3)(ba) and (bb) as substituted by section 54(8) of the 2000 Act, and

(h) in section 151(3)(c) the words "any of paragraphs (a) to (bb)" as inserted by section 54(8) of the 2000 Act,

to the extent that those amendments made by section 54 of the 2000 Act have been brought into force for the purpose of making regulations and rules.

Pension compensation

277 Amendments relating to the Pensions Compensation Board

(1) The Pensions Act 1995 (c. 26) is amended as follows.

(2) In section 80 (review of decisions of the Pensions Compensation Board)--

(a) after subsection (2) insert--

" (2A) The Compensation Board may also review such a determination without an application being made. " , and

(b) for subsections (4) and (5) substitute--

" (4) Regulations may make provision--

(a) with respect to reviews under this section (or any corresponding provision in force in Northern Ireland);

(b) with respect to applications under subsection (2) (or any corresponding provision in force in Northern Ireland) and the procedure to be adopted on any such application. "

(3) In section 81 (cases where compensation provisions apply), omit subsections (1)(d), (2A) and (7).

(4) In section 83 (amount of compensation) for subsections (3) and (4) substitute--

" (3) The amount of the payment, or (if there is more than one) the aggregate, must not exceed the aggregate of--

(a) the amount (if any) by which the shortfall at the application date exceeds the recoveries of value made between the application date and the settlement date, and

(b) interest at the prescribed rate for the prescribed period on the amount of that excess (if any). "

Annual increases in rate of pensions

278 Annual increase in rate of certain occupational pensions

(1) Section 51 of the Pensions Act 1995 (annual increase in rate of certain occupational pensions) is amended in accordance with subsections (2) to (6).

(2) In subsection (1)--

(a) omit "and" at the end of sub-paragraph (i) of paragraph (a),

(b) at the end of sub-paragraph (ii) of that paragraph insert--

" (iii) in the case where the pension becomes a pension in payment on or after the commencement day, is not a money purchase scheme, and " , and

" (b) the whole, or any part of, the pension is attributable--

(i) to pensionable service on or after the appointed day, or

(ii) in the case of money purchase benefits where the pension is in payment before the commencement day, to payments in respect of employment carried on on or after the appointed day, and

(i) the annual rate of the pension, or

(ii) if only part of the pension is attributable as described in paragraph (b), so much of the annual rate as is attributable to that part,

would not be increased each year by at least the appropriate percentage of that rate. "

(3) In subsection (2) after "money purchase benefits" insert "where the pension is in payment before the commencement day".

(4) In subsection (4)(b) for "5 per cent per annum" substitute " --

(i) in the case of a category X pension, 5% per annum, and

(ii) in the case of a category Y pension, 2.5% per annum. "

(5) After subsection (4) insert--

" (4A) For the purposes of this section, a pension is a category X pension if it is--

(a) a pension which became a pension in payment before the commencement day, or

(b) a pension--

(i) which becomes a pension in payment on or after the commencement day, and

(ii) the whole of which is attributable to pensionable service before that day.

(4B) For the purposes of this section, a pension is a category Y pension if it is a pension--

(a) which becomes a pension in payment on or after the commencement day, and

(b) the whole of which is attributable to pensionable service on or after the commencement day.

(4C) For the purposes of applying this section in the case of a pension--

(a) which becomes a pension in payment on or after the commencement day,

(b) part of which is attributable to pensionable service before the commencement day, and

each of those parts of the pension is to be treated as if it were a separate pension. "

(6) In subsection (5)--

(a) for "the provisions of subsections (2) and (3)" substitute "any of the provisions of this section", and

(b) in paragraph (a), after "appointed day" insert "or the commencement day".

(7) After that section insert--

" 51ZA Meaning of "the appropriate percentage"

(1) For the purposes of section 51(1)(c) and (2), "the appropriate percentage" in relation to an increase in the whole or part of the annual rate of a pension--

(a) in the case of a category X pension, means the revaluation percentage for the latest revaluation period specified in the order under paragraph 2 of Schedule 3 to the Pension Schemes Act 1993 (revaluation of accrued pension benefits) which is in force at the time of the increase, and

(b) in the case of a category Y pension, means whichever is the lesser of--

(i) the revaluation percentage for the latest revaluation period specified in the order under paragraph 2 of Schedule 3 to the Pension Schemes Act 1993 which is in force at the time of the increase, and

(ii) 2.5%.

(2) In this section "the revaluation percentage" and "the revaluation period" have the same meaning as in paragraph 2 of Schedule 3 to the Pension Schemes Act 1993. "

(8) In section 54(3) of that Act (sections 51 to 53: supplementary), at the appropriate place insert--

" "the commencement day" means the day appointed for the coming into force of section 278 of the Pensions Act 2004 (amendments to section 51), " .

279 Annual increase in rate of certain personal pensions

(1) Section 162 of the Pensions Act 1995 (c. 26) (annual increase in rate of certain personal pensions) is amended in accordance with subsection (2).

(2) In subsection (1) omit "and" at the end of paragraph (a) and for paragraph (b) substitute--

" (b) the pension became a pension in payment before the commencement day,

(c) the whole, or any part of, the pension is attributable to contributions in respect of employment carried on on or after the appointed day, and

(d) apart from this section--

(i) the annual rate of the pension, or

(ii) if only part of the pension is attributable as described in paragraph (c), so much of the annual rate as is attributable to that part,

would not be increased each year by at least the appropriate percentage of that rate. "

(3) In section 163(3) of that Act (section 162: supplementary)--

(a) in the definition of "appropriate percentage", for the words from "revaluation period" to the end substitute "latest revaluation period specified in the order under paragraph 2 of Schedule 3 to the Pension Schemes Act 1993 (revaluation of accrued pension benefits) which is in force at the time of the increase (expressions used in this definition having the same meaning as in that paragraph of that Schedule)", and

(b) at the appropriate place insert--

" "the commencement day" means the day appointed for the coming into force of section 279 of the Pensions Act 2004 (amendments to section 162), " .

280 Power to increase pensions giving effect to pension credits etc

(1) Section 40 of the Welfare Reform and Pensions Act 1999 (c. 30) (power of the Secretary of State to increase pensions provided to give effect to certain rights) is amended as follows.

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