Pensions Bill

With this it will be convenient to discuss the following: Amendment (a), in line 9, leave out from ‘than’ to end of line 11 and insert ‘the amount that would be paid in the same circumstances in payments made in accordance with the pension compensation provisions set out in Schedule 7, save that references to ““the Board”” shall be read as references to the Scheme Manager defined in subsection (3).’. New clause 11— Financial Assistance Scheme— ‘(1) The Secretary of State shall commission an independent review of the Financial Assistance Scheme having regard (among other things) to— (a) the efficiency and cost effectiveness of its administration; (b) whether it could be more effective if administered by the staff of the Pension Protection Fund; (c) whether it is adequately financed; (d) what other sources of finance could be made available, including but not limited to unclaimed assets; (e) whether it should be engaged in the purchase of bulk annuities. (2) The Secretary of State shall publish the findings of such review within six months of this Act coming into force.’. New clause 24— Financial Assistance Scheme (No. 2)— ‘(1) The Pensions Act 2004 (c. 35) is amended as follows. (2) In section 286 (financial assistance for members etc.) insert after subsection (3)— ““(3A) Regulations under subsection (1) must provide that the payments to be made to or in respect of qualifying members shall be of the same amount, and shall be paid in the same circumstances, as payments made in accordance with the pension compensation provisions set out in Schedule 7, save that references to ““the Board”” shall be read as references to the scheme manager defined in subsection (3).””.’. New clause 25— Financial Assistance Scheme: eligibility where employers remain solvent— ‘(1) The Pensions Act 2004 (c. 35) is amended as follows. (2) In section 286 (financial assistance for members etc.) insert after subsection (2)— ““(2A) Conditions prescribed under paragraph (c) in the definition of ““qualifying pension scheme”” in subsection (2) shall not exclude schemes which have been wound up in the absence of an insolvency event as referred to in Part 2.””.’. New clause 26— Financial Assistance Scheme (No. 3)— ‘(1) Section 286 (financial assistance for members etc.) of the Pensions Act 2004 (c. 35) is amended as follows. (2) After subsection (1) insert— ““(1A) The regulations must provide, save for any necessary changes, that each person who would have had an entitlement to payment as compensation under Schedule 7 (Pension Protection Provisions), if each qualifying pension scheme had been an eligible scheme for which the Board had assumed responsibility as specified in paragraph 1 of that Schedule, is given an equivalent entitlement to payment.”” (3) Omit subsections (6) and (7).’. New clause 27— Financial Assistance Scheme (No. 4)— ‘(1) Section 286 (financial assistance for members etc.) of the Pensions Act 2004 (c.35) is amended as follows. (2) After subsection (4) there is inserted— ““(4A) The regulations must provide (subject to any changes which the Secretary of State may consider necessary) that each person who would have been entitled to compensation under Schedule 7 (pension compensation provisions) is given an equivalent entitlement to such compensation, whether or not each qualifying pension scheme has been an eligible scheme for which the Board had assumed responsibility as specified in paragraph 1 of that Schedule.””.’. New clause 39— Amendments to Financial Assistance Scheme Regulations 2005 (No. 1)— ‘(1) The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are amended as follows. (2) In regulation 5(1) for ““Secretary of State”” substitute ““Board of the Pension Protection Fund (““the Board””)””. (3) In regulation 5(2)(a) leave out from ““Secretary of State”” to end of sub-paragraph and insert ““the Board””. (4) In regulation 5, sub-paragraph 2(b) is omitted.’. New clause 40— Amendment to the Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) (No. 2)— ‘(1) The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are amended as follows. (2) In regulation 9, paragraph (c) is omitted. (3) Regulations 11 to 13 are omitted.’. New clause 41— Pensions Protection Lifeboat Fund— ‘(1) There shall be established as soon as reasonably practicable a Pension Protection Lifeboat Fund (““the Lifeboat Fund””) which shall be administered by the Board of the Pension Protection Fund (““the Board””). (2) The purpose of the Lifeboat Fund shall be to make supplementary payments to persons who are qualifying members of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 (S.I. 2006/1986) (or who would be qualifying members if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age), in addition to the sums payable in any event under those regulations. (3) The supplementary payments made to any person in accordance with subsection (2) shall equal the amount that, taken together with any amounts payable to that person under the Financial Assistance Scheme and amounts payable to that person as scheme benefits under the qualifying pension scheme in respect of which he is a qualifying member of the Financial Assistance Scheme (or would be a qualifying member if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age), is the amount that would be payable to that person if that qualifying pension scheme was accepted into the Pension Protection Fund. (4) The Secretary of State shall make such loans to the Lifeboat Fund as are necessary to allow the discharge of its functions and in particular its obligation to make supplementary payments under subsection (2). (5) The Secretary of State shall make such loans from time to time having regard to— (a) requests for such loans received from the Board; (b) the amount of assets transferred or to be transferred to the Lifeboat Fund under the Scheme (as defined in section [Transfer of unclaimed assets] (““the Scheme””)); (c) the level of any claims on the Lifeboat Fund in respect of assets transferred to it under the Scheme. (6) Loans made in accordance with this section must be repaid to the Secretary of State as soon as, in the reasonable opinion of the Board, it is prudent to do so having regard to— (a) the obligations of the Lifeboat Fund; (b) the amount of assets transferred or to be transferred to the Lifeboat Fund under the Scheme; and (c) the level of claims on the Lifeboat Fund in respect of assets transferred to it under the Scheme. (7) Loans made under this section shall be interest free. (8) The assets of the Lifeboat Fund shall be held separately from the assets of any other fund under the control of the Board. (9) The Secretary of State may by regulations make further provision in connection with the Lifeboat Fund. (10) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.’. New clause 42— Pensions Unclaimed Assets Recovery Agency— ‘(1) There shall be a body called the Pensions Unclaimed Assets Recovery Agency (““the Agency””). (2) The Agency must be established no later than three months after the passing of this Act. (3) The Agency shall consist of not fewer than six nor more than twelve members to be appointed by the Secretary of State, and the Secretary of State shall appoint one member to be the chairman, and another member to be a deputy chairman, of the Agency. (4) In appointing a person to be a member of the Agency, the Secretary of State shall have regard to the desirability of appointing persons who have knowledge of, or experience relating to, matters relevant to the functions of the Agency. (5) A member of the Agency may hold office for such a period as the Secretary of State may determine, but not exceeding— (a) six years, in the case of the chairman, and (b) four years, in the case of other members. (6) The Secretary of State may make payments to the members of the Agency by way of remuneration and make payments to them in respect of expenses incurred by them in the performance of their duties. (7) The Secretary of State may also defray any other expenses of the Agency.’. New clause 43— Functions of the Pensions Unclaimed Assets Recovery Agency— The functions of the Agency are— (a) to obtain such information about such classes of unclaimed assets as may be prescribed by the Secretary of State by regulations; (b) to provide the Secretary of State with that information and any other related information held by the Agency which the Secretary of State may from time to time require; (c) to administer the scheme to be established by virtue of section [Transfer of unclaimed assets].’. New clause 44— Pensions Unclaimed Assets Recovery Agency: provision of information— ‘(1) Subject to subsection (2) below, the Agency may, by notice, require any person to supply it, within a specified period or at a specified time or times, such specified information as the Agency considers it needs for the purposes of carrying out its functions under section [Function of the Pensions Unclaimed Assets Recovery Agency]. (2) This section does not authorise any requirement in relation to information to be imposed on any person unless that person carries on a business in the United Kingdom; but a requirement may be imposed under this section on a person in relation to information in the possession or control of a connected person or undertaking outside the United Kingdom. (3) Any person who, when required to do so under this section, fails without reasonable excuse to supply any information, shall be liable on summary conviction— (a) to a fine not exceeding level 5 on the standard scale; and (b) in the case of a continuing offence, to an additional fine not exceeding £200 for every day during which the offence continues. (4) Any person who knowingly or recklessly supplies any information which is false or misleading shall be liable— (a) on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both; and (b) on summary conviction, to a fine not exceeding the statutory maximum.’. New clause 45— Transfer of unclaimed assets— ‘(1) The Secretary of State shall by regulations, not later than twelve months after the passing of this Act, establish a scheme (““the Scheme””) for the transfer of such unclaimed assets as the regulations shall prescribe to the Lifeboat Fund. (2) Regulations made under this subsection shall provide for— (a) a definition of those unclaimed assets to which the Scheme applies, including the extent to which the Scheme is applicable to assets whose ownership is known, or can be determined; (b) the transfer to the Lifeboat Fund of a prescribed proportion of such unclaimed assets as the regulations shall prescribe, and the manner and timing of such transfers; (c) the transfer to the Lifeboat Fund of liability for any claim in respect of assets transferred under the Scheme to the Lifeboat Fund; (d) penalties to be imposed on any person holding assets prescribed under subsections (1) or (2)(b) who fails to transfer them or such proportion of them as is prescribed in accordance with the Scheme. (3) The power to make regulations under this section is exercisable by statutory instrument. (4) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.’. New clause 46— Purchase of annuities— ‘The Secretary of State shall, as soon as is reasonably practicable, by regulations require the trustees of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 which have not yet completed winding-up to desist from purchasing (except where, on or before 18th April 2007, they have entered into a binding contractual commitment so to do) or making binding commitments to purchase, annuities on behalf of scheme members, for a period of nine months from 18th April 2007.’. New clause 47— Duty to make on-account payments— ‘(1) Pursuant to his powers under section 286(3)(d) of the Pensions Act 2004, the Secretary of State shall as soon as is reasonably practicable make regulations requiring trustees of qualifying pension schemes to make on-account payments to qualifying members, or persons who would be qualifying members if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age. (2) The Secretary of State may make such loans to trustees of qualifying schemes as appear to him to be expedient to enable them to make such on-account payments where adequate scheme assets appear to him not to be available to them and regulations may prescribe for the recovery of such loans upon completion of wind-up of a qualifying scheme. (3) Regulations made under subsection (1) above shall provide that on-account payments shall equal the amounts that would be payable if the qualifying scheme was accepted into the Pension Protection Fund. (4) The regulations shall provide for payment to trustees of a qualifying pension scheme of payments due to a qualifying member of that pension scheme (or a person who would be a qualifying member if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age) by the Financial Assistance Scheme or by the Lifeboat Fund (as defined in section [Transfer of unclaimed assets]) in respect of periods for which on-account payments to that member have been made in accordance with subsection (1).’. Government amendments Nos. 19, 20 and 21. Amendment No. 14, in schedule 7, page 69, line 38, at end add— ‘Part 7 FINANCIAL ASSISTANCE SCHEME Citation Extent of repeal Pensions Act 2004 (c. 35) Section 286(6) and (7) Amendment No. 17, in title, line 4, after ‘Authority;’, insert ‘to establish the Pension Protection Lifeboat Fund;’. Amendment No. 18, in title, line 4, after ‘Authority;’, insert ‘to make provision for the transfer of a proportion of unclaimed assets to the Pension Protection Lifeboat Fund;’. Amendment No. 22, in title, line 4, after ‘Authority;’, insert ‘to make provision about the establishment and functions of, and to confer powers on, the Pensions Unclaimed Assets Recovery Agency;’.