Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
State pension
Introduction
This Part creates a benefit called state pension.
A person who reaches pensionable age before 6 April 2016 is not entitled to benefits under this Part (but may be entitled to similar benefits under Part 2 of the Contributions and Benefits Act).
State pension at the full or reduced rate
A person is entitled to a state pension payable at the full rate if—
the person has reached pensionable age, and
the person has 35 or more qualifying years.
A person is entitled to a state pension payable at the reduced rate if—
the person has reached pensionable age, and
the person has at least the minimum number of qualifying years but fewer than 35 qualifying years.
The minimum number of qualifying years for a state pension payable at the reduced rate is to be specified in regulations and may not be more than 10.
In this Part “qualifying year” means a tax year, during a person's working life, in which the person's earnings factor (or the sum of the person's earnings factors) is equal to or greater than the qualifying earnings factor for the year.
For earnings factors, see sections 22 and 23 of the Contributions and Benefits Act.
There are provisions elsewhere that affect a person's entitlement to a state pension under this section or the rate at which it is payable.
The full rate of the state pension is the weekly rate for the time being specified in regulations.
The reduced rate of the state pension for a person is the following proportion of the full rate—1 35×the person's number of qualifying years.
Once the full rate has been specified, the power to make regulations under subsection (1) may not be re-exercised so as to reduce the rate.
State pension at the transitional rate
A person is entitled to a state pension payable at the transitional rate if—
the person has reached pensionable age,
the person has at least the minimum number of qualifying years, and
the person has at least one pre-commencement qualifying year.
The minimum number of qualifying years for a state pension payable at the transitional rate is to be specified in regulations and may not be more than 10.
A person entitled to a state pension payable at the transitional rate is not entitled to a state pension under section 2.
In this Part—“post-commencement qualifying year” means a qualifying year beginning on or after 6 April 2016;“pre-commencement qualifying year” means—a qualifying year beginning on or after 6 April 1978 and ending before 6 April 2016, or a reckonable year that would have been treated under regulation 13(1) of the Social Security (Widow's Benefit, Retirement Pensions and Other Benefits) (Transitional) Regulations 1979 (S.I. 1979/643) as a qualifying year for the purposes of determining the person's entitlement to an old state pension that is a Category A retirement pension.
A reckonable year mentioned in paragraph (b) of the definition of “pre-commencement qualifying year” counts towards the minimum number of qualifying years required by subsection (1)(b) (even though it does not come within the definition of “qualifying year” for the purposes of this Part).
For earnings factors, see sections 22 and 23 of the Contributions and Benefits Act.
There are provisions elsewhere that affect a person's entitlement to a state pension under this section or the rate at which it is payable.
The transitional rate of the state pension for a person is a weekly rate equal to—
the sum of the amounts calculated under Schedule 1 for the person's pre-commencement and post-commencement qualifying years capped at the full rate of the state pension on the day on which the person reaches pensionable age, or
if higher, the amount for the person's pre-commencement qualifying years alone.
The transitional rate of the state pension for a person is to be increased from time to time in accordance with the applicable paragraph of Schedule 2.
Section 6 requires the transitional rate of the state pension for a person to be recalculated in certain circumstances.
There are special rules about the transitional rate for certain women: see section 11 (reduced rate elections).
This section modifies the transitional rate of the state pension for a person if, after the person has reached pensionable age, a determination is made under section 48A(2) of the Pension Schemes Act 1993 (contracting-out: reinstatement in state scheme following payment of contributions equivalent premium).
The person's transitional rate is to be recalculated (taking the determination into account under paragraph 3(8) of Schedule 1).
The recalculated rate has effect as from the day on which the person reached pensionable age (and the other provisions of this Part apply accordingly).
Transitional entitlement based on contributions of others
A person is entitled to a state pension under this section if—
the person has reached pensionable age,
the person's spouse died while they were married or the person's civil partner died while they were civil partners of each other, and
the person is entitled to an inherited amount under Schedule 3.
A state pension under this section is payable at a weekly rate equal to the inherited amount.
The rate of the state pension for a person under this section is to be increased from time to time in accordance with the applicable paragraph of Schedule 4.
Regulations may provide that if at any time the sum of the relevant state pensions for a person exceeds an amount provided for by regulations, the rate of any state pension payable to the person under this section is to be reduced by the amount of the excess.
The “sum of the relevant state pensions” for a person is the sum of—
the rate of any state pension payable to the person under this section (ignoring any reduction under subsection (4)), and
In subsections (4) and (5) a reference to the rate of a person's state pension is to the rate—
ignoring any increase under section 17.
There are provisions elsewhere that affect a person's entitlement to a state pension under this section or the rate at which it is payable.
A person is entitled to a choice under this section if—
the person has reached pensionable age,
the person's spouse died while they were married or the person's civil partner died while they were civil partners of each other,
the spouse or civil partner's entitlement to an old state pension was deferred at the time of death and throughout the period of 12 months ending with the day before the death,
either: (i) the person was under pensionable age when the spouse or civil partner died and did not marry or form a civil partnership after the death and before reaching pensionable age, or (ii) the person was over pensionable age when the spouse or civil partner died, and
the person would, on reaching pensionable age or on the death of the spouse or civil partner, have been entitled to an old state pension if in the relevant provisions of the Contributions and Benefits Act: (i) the words “before 6 April 2016” were omitted, and (ii) any reference to a bereavement allowance included a reference to bereavement support payment under section 30 of this Act.
The person may choose—
to be paid a lump sum under this section, or
to be paid a state pension under section 9.
Regulations are to set out the manner in which, and the period within which, that choice is to be made.
A person who chooses to be paid a lump sum under this section, or who fails to choose within that period, is entitled to a “widowed person's or surviving civil partner's lump sum” calculated under paragraph 7B of Schedule 5 to the Contributions and Benefits Act.
In that paragraph as it applies for the purposes of this section—
read the references to “W” as references to the person,
read sub-paragraph (5) as if it required increases under paragraph 4 of the Schedule to be excluded, and
read the reference in sub-paragraph (7)(a) to the date on which W becomes entitled to a Category A or Category B retirement pension as a reference to the date on which the person becomes entitled to make a choice under this section.
There are provisions elsewhere that affect a person's entitlement to a lump sum under this section.
Regulations may allow a person, in specified circumstances—
to alter his or her choice under this section;
to make a late choice.
Regulations under subsection (7) may, for the purpose of avoiding the duplication of payment—
enable recovery of an amount paid to the person, or
reduce the amount of a lump sum to be paid to the person.
For the purposes of this section—
“deferred” has the meaning given by section 55(3) of the Contributions and Benefits Act,
“the relevant provisions” of the Contributions and Benefits Act are—section 44(1)(a); section 48(1); section 48A(1) and (3); section 48B(1), (1A), (4) and (4A); section 48BB(1) and (3), and
in determining whether a person would have been entitled to an old state pension as mentioned in subsection (1)(e) ignore any requirement to make a claim.
A person is entitled to a state pension under this section if—
the person has reached pensionable age,
the person's spouse died while they were married or the person's civil partner died while they were civil partners of each other,
either: (i) the person was under pensionable age when the spouse or civil partner died and did not marry or form a civil partnership after the death and before reaching pensionable age, or (ii) the person was over pensionable age when the spouse or civil partner died,
the person is entitled to an inherited deferral amount under Schedule 5, and
in the case of a person entitled to a choice under section 8, the person has chosen to be paid a state pension under this section.
A state pension under this section is payable at a weekly rate equal to the inherited deferral amount.
But if at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under this section is increased (at that time) by the percentage specified in the order.
A person may be entitled to more than one state pension under this section.
There are provisions elsewhere that affect a person's entitlement to a state pension under this section or the rate at which it is payable.
The regulations may—
amend or otherwise modify this Act or any other enactment (whenever passed or made).
In this section “graduated contributions” and “insured person” have the meanings given by section 36(8) of the National Insurance Act 1965.
Transition: women who have had a reduced rate election
Section 4(1)(b) (minimum number of qualifying years for state pension at the transitional rate) does not apply to a woman if a reduced rate election was in force in respect of her at the beginning of the relevant 35-year period.
Schedule 6 modifies the rules about the transitional rate of the state pension for a woman if a reduced rate election was in force in respect of her at the beginning of the relevant 35-year period.
In this section—“reduced rate election” means an election made, or treated as having been made, under regulations under section 19(4) of the Contributions and Benefits Act;“relevant 35-year period” means the 35-year period ending with the tax year before the one in which the woman reached pensionable age.
A woman is entitled to a state pension under this section if—
she has reached pensionable age,
a reduced rate election was in force in respect of her at the beginning of the relevant 35-year period,
she does not have any pre-commencement qualifying years, and
she is entitled to a basic amount under Schedule 7.
A state pension under this section is payable at a weekly rate equal to the basic amount.
But if at any time the full rate of the state pension is increased, the rate of the woman's state pension under this section is increased (at that time) by the same percentage as the increase in the full rate.
In subsection (3) the reference to the rate of the woman's state pension is to the rate ignoring any increase under section 17.
A woman is not entitled to a state pension under this section and section 2 at the same time: she is only entitled to the one with the higher rate.
There are provisions elsewhere that affect a woman's entitlement to a state pension under this section or the rate at which it is payable.
In this section—“reduced rate election” means an election made, or treated as having been made, under regulations under section 19(4) of the Contributions and Benefits Act;“relevant 35-year period” means the 35-year period ending with the tax year before the one in which the woman reached pensionable age.
Transition: pension sharing on divorce etc
A person is entitled to a state pension under this section if—
the person has reached pensionable age, and
the person is entitled to a state scheme pension credit.
A state pension under this section is payable at the appropriate weekly rate set out in Schedule 8.
The rate of the state pension for a person under this section is to be increased from time to time in accordance with the applicable paragraph of Schedule 9.
A person may be entitled to more than one state pension under this section.
There are provisions elsewhere that affect a person's entitlement to a state pension under this section or the rate at which it is payable.
In this Part—“state scheme pension credit” means—a new state scheme pension credit, or an old state scheme pension credit;“new state scheme pension credit” means a credit under section 49A(2)(b) of the Welfare Reform and Pensions Act 1999;“old state scheme pension credit” means a credit under section 49(1)(b) of that Act.
The rate of a person's state pension under section 4 is reduced under this section if the person is subject to a state scheme pension debit.
The amount by which the rate is reduced is the amount of the appropriate weekly reduction set out in Schedule 10.
A person's state pension may be reduced more than once under this section.
In this Part—“state scheme pension debit” means—a new state scheme pension debit, or an old state scheme pension debit;“new state scheme pension debit” means a debit under section 49A(2)(a) of the Welfare Reform and Pensions Act 1999;“old state scheme pension debit” means a debit under section 49(1)(a) of that Act.
Schedule 11 contains amendments to do with pension sharing.
Postponing or suspending state pension
A person who has become entitled to a state pension under this Part may opt to suspend his or her entitlement in accordance with regulations.
A person is not entitled to any state pension under this Part for the period for which the person has opted to suspend his or her entitlement.
For other effects of a person exercising the option, see section 17.
A person may not opt to suspend his or her entitlement to a state pension under this Part on more than one occasion.
Regulations may specify other circumstances in which a person may not opt to suspend his or her entitlement to a state pension under this Part.
Regulations may allow a person who has opted to suspend his or her entitlement to a state pension under this Part to cancel the exercise of that option (in whole or in part) in relation to a past period.
If a person's entitlement to a state pension under this Part has been deferred for a period, the weekly rate of the person's state pension is increased by an amount equal to the sum of the increments to which the person is entitled.
But the weekly rate is not to be increased under subsection (1) if the increase would be less than 1% of the person's weekly rate ignoring that subsection.
A person is entitled to one increment for each whole week in the period during which the person's entitlement to a state pension was deferred.
The amount of an increment is equal to a specified percentage of the weekly rate of the state pension to which the person would have been entitled immediately before the end of that period if the person's entitlement had not been deferred.
In subsection (4) “specified” means specified in regulations.
The amount of an increase under this section is itself to be increased from time to time in accordance with any order made under section 150 of the Administration Act (annual up-rating of benefits).
For the purposes of this section and section 18 a person's entitlement to a state pension under this Part is also deferred for a period if the person is not entitled to it for that period by reason only of—
not satisfying the conditions in section 1 of the Administration Act (entitlement dependent on claim etc), or
subsection (9) below.
A person is not entitled to a state pension under this Part for any period during which his or her entitlement to any other state pension under this Part is deferred.
Regulations may—
provide for circumstances in which a part of a week is to be treated for the purposes of section 17(3) as a whole week, and
provide for circumstances in which a day does not count in determining a number of whole weeks for the purposes of section 17(3) (for example if the person is receiving other benefits).
Regulations may modify section 17(4) in cases where, at any time in the period during which a person's entitlement to a state pension is deferred, the rate for the person would have changed otherwise than because of an up-rating increase.
Regulations may modify section 17(4) in relation to a person who has been an overseas resident during any part of the period for which the person's entitlement to a state pension has been deferred.
In subsection (3) “overseas resident” means a person who is not ordinarily resident in Great Britain or any other territory specified in the regulations.
Regulations may amend the percentage specified in section 17(2).
Prisoners and overseas residents
Regulations may provide that a person is not to be paid a state pension under this Part for any period during which the person is a prisoner.
“Prisoner” means a person (in Great Britain or elsewhere) who is—
imprisoned or detained in legal custody, or
unlawfully at large.
In the case of a person remanded in custody for an offence, regulations under subsection (1) may be made so as to apply only if a sentence of a specified description is later imposed on the person for the offence.
Regulations may provide that an overseas resident who is entitled to a state pension under this Part is not entitled to up-rating increases.
In this section “overseas resident” means a person who is not ordinarily resident in Great Britain or any other territory specified in the regulations.
Regulations under this section do not affect the rate of an overseas resident's state pension for any period during which he or she is in Great Britain or a territory specified in the regulations (but once the overseas resident ceases to be in Great Britain or a specified territory the rate reverts to what it would have been had he or she not been in Great Britain or a specified territory).
Regulations under this section do not affect the rate of a person's state pension once the person stops being an overseas resident.
Definitions
In this Part “old state pension” means a Category A retirement pension or a Category B retirement pension.
A reference in this Part to the rate of an old state pension (however expressed) does not include—
graduated retirement benefit under the National Insurance Act 1965, or
any increase in the rate because of Schedule 5 to the Contributions and Benefits Act (deferral increases).
In this Part—“the Administration Act” means the Social Security Administration Act 1992;“Category A retirement pension” means a Category A retirement pension under Part 2 of the Contributions and Benefits Act;“Category B retirement pension” means a Category B retirement pension under Part 2 of the Contributions and Benefits Act;“the Contributions and Benefits Act” means the Social Security Contributions and Benefits Act 1992;“enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978;“full rate” means the rate mentioned in section 3(1);“old state pension” has the meaning given by section 21 (and references to the rate of an old state pension are to be read in accordance with that section);“pensionable age” has the meaning given by section 122(1) of the Contributions and Benefits Act; and a person is “over” pensionable age if the person has reached that age (and is otherwise “under” that age);“post-commencement qualifying year” has the meaning given by section 4(4);“pre-commencement qualifying year” is to be read in accordance with section 4(4) and (5);“qualifying earnings factor” has the meaning given by section 122(1) of the Contributions and Benefits Act;“qualifying year” has the meaning given by section 2(4);“reduced rate” means the rate mentioned in section 3(2);“regulations” means regulations made by the Secretary of State;“state scheme pension credit”, and related expressions, have the meaning given by section 13;“state scheme pension debit”, and related expressions, have the meaning given by section 14;“tax year” has the meaning given by section 122(1) of the Contributions and Benefits Act;“transitional rate” means the rate mentioned in section 5;“up-rating increase”, in relation to a state pension under this Part, means—an increase in the rate of the state pension because of an increase in the amount specified in regulations under section 3(1), ... an increase in the rate of the state pension because of section 9(3), 12(3) or 17(6) or Schedule 2, 4 or 9;, or an increase in the rate of the state pension because of regulations under section 10 which make provision corresponding or similar to section 9(3) or Schedule 4;“working life” has the meaning given by section 122(1) of the Contributions and Benefits Act.
For the purposes of any other provision of this Part two people are to be treated as if they are not married to each other in relation to times when either of them is married to a third person.
Consequential and other amendments
In Schedule 12—Part 1 contains amendments to do with state pensions under this Part; Part 2 contains key amendments to do with the old state pension system; Part 3 contains amendments to do with state pension credit; Part 4 contains other amendments to do with this Part.
Schedule 13 contains amendments to abolish contracting-out for salary related schemes.
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Subsections (2) to (7) and Schedule 14 are repealed at the end of the period of 5 years beginning with 6 April 2016.
The Secretary of State may by order amend subsection (8) to extend the period for the time being mentioned there.
Option to boost old retirement pensions
In Schedule 15—Part 1 contains amendments to allow certain people to pay additional contributions to boost their retirement pensions; Part 2 contains amendments to allow corresponding legislation to be put in place for Northern Ireland.
Pensionable age
Paragraph 1 of Schedule 4 to the Pensions Act 1995 is amended as follows.
In sub-paragraph (6) for “6th April 1968” substitute “ 6th April 1960 ”.
For sub-paragraph (7) and table 3 substitute—
In sub-paragraph (8) for “5th April 1969” substitute “ 5th March 1961 ”.
The Secretary of State must from time to time—
review whether the rules about pensionable age are appropriate, having regard to life expectancy and other factors that the Secretary of State considers relevant, and
prepare and publish a report on the outcome of the review.
The first report must be published before 7 May 2017.
Each subsequent report must be published before the end of the period of 6 years beginning with the day on which the previous report was published.
For the purposes of each review, the Secretary of State must require the Government Actuary or Deputy Government Actuary to prepare a report for the Secretary of State on—
whether the rules about pensionable age mean that, on average, a person who reaches pensionable age within a specified period can be expected to spend a specified proportion of his or her adult life in retirement, and
if not, ways in which the rules might be changed with a view to achieving that result.
The Secretary of State must, for the purposes of a review, appoint a person or persons to prepare a report for the Secretary of State on other specified factors relevant to the review.
The Secretary of State must lay before Parliament any report prepared under this section.
For the purposes of subsection (4)—
a person's adult life is the part of the person's life after he or she reaches the specified age;
the proportion of a person's adult life spent in retirement is the proportion of his or her adult life spent after reaching pensionable age.
In this section—“pensionable age” has the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995 (and “the rules about pensionable age” means those rules);“specified” means specified by the Secretary of State.
State pension credit
In section 6 of the State Pension Credit Act 2002 (duty to specify assessed income period), in subsection (1), after “subsection (3) or (4)” insert “ where the relevant decision takes effect before 6 April 2016 ”.
At the end of the heading to that section insert “ for pre-6 April 2016 awards ”.
Regulations under section 9(5) of the State Pension Credit Act 2002 may in particular be made for the purpose of phasing out, on or after 6 April 2016, any remaining assessed income period that is 5 years or shorter than 5 years.
If this section comes into force before 6 April 2014—
in section 9(6)(a) of the State Pension Credit Act 2002 (duration of assessed income period for certain transitional cases to be treated as indefinite), after “brought to an end” insert “ , on or after 6 April 2009 but before 6 April 2014, ”.
If this section comes into force on or after 6 April 2014—
in section 9(6)(a) of the State Pension Credit Act 2002 (duration of assessed income period for certain transitional cases to be treated as indefinite) as restored by this section, after “brought to an end” insert “ , on or after 6 April 2009 but before 6 April 2014, ”.
Bereavement support payment
A person is entitled to a benefit called bereavement support payment if—
the person's spouse, civil partner or cohabiting partner dies,
in the case of a person whose cohabiting partner dies, the person is pregnant or entitled to child benefit in circumstances specified under subsection (4) or, where no such circumstances are specified, in such circumstances as the Secretary of State may specify by regulations,
the person is under pensionable age when the spouse, civil partner or cohabiting partner dies,
the person is ordinarily resident in Great Britain, or a specified territory, when the spouse, civil partner or cohabiting partner dies, and
the contribution condition is met (see section 31).
Only one person is entitled to bereavement support payment in respect of one death.
Where, apart from subsection (1A), more than one person would be so entitled, entitlement is to be determined in accordance with subsections (1C) and (1D).
Where only one of those persons is a member of the same household as the deceased, that person is entitled.
Where there is more than one person who is a member of the same household as the deceased and would (apart from subsection (1A)) be entitled—
if one of those persons is the deceased’s spouse or civil partner and is pregnant or entitled to child benefit in circumstances specified under subsection (1)(aa) or (4), that person is entitled;
if there is no spouse or civil partner entitled under paragraph (a), the deceased’s cohabiting partner who is pregnant or entitled to child benefit in circumstances specified under subsection (1)(aa) or (4) is entitled (but this is subject to paragraphs (c) and (d));
if there is more than one cohabiting partner within paragraph (b), the cohabiting partner who has been a member of the same household as the deceased for longest is entitled;
if there is more than one cohabiting partner within paragraph (b) and each partner has been a member of the same household as the deceased for the same length of time, the Secretary of State must determine who is entitled.
The Secretary of State must by regulations specify—
the rate of the benefit, and
the period for which it is payable.
The regulations may specify different rates for different periods.
In the case of a person who is pregnant or entitled to child benefit in specified circumstances, the regulations may—
specify a higher rate;
provide for the allowance to be payable for a longer period.
A person is not entitled to bereavement support payment for periods after the person has reached pensionable age.
A person is not entitled to bereavement support payment if the death occurred before this section came fully into force.
For the purposes of this section, the Secretary of State may by regulations specify—
circumstances in which the fact that two persons are married to each other, or are civil partners or cohabiting partners of each other, is to be disregarded;
circumstances in which two persons are to be treated as if they were married to each other or were civil partners or cohabiting partners of each other;
circumstances in which people are to be treated as being, or as not being, members of the same household.
For the purposes of this section, two persons are cohabiting partners if they are not married to, or civil partners of, each other but are living together as if they were married or civil partners.
The Secretary of State must issue a statement of the Secretary of State’s policy with respect to making determinations under subsection (1D)(d).
In this section—“pensionable age” has the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995;“specified territory” means a territory specified in regulations made by the Secretary of State.
For the purposes of section 30(1)(d) the contribution condition is that, for at least one tax year during the deceased's working life—
he or she actually paid Class 1 or Class 2 national insurance contributions, and
those contributions give rise to an earnings factor (or total earnings factors) equal to or greater than 25 times the lower earnings limit for the tax year.
For the purposes of section 30(1)(d) the contribution condition is to be treated as met if the deceased was an employed earner and died as a result of—
a personal injury of the kind mentioned in section 94(1) of the Social Security Contributions and Benefits Act 1992, or
a disease or personal injury of the kind mentioned in section 108(1) of that Act.
In this section the following expressions have the meaning given by section 122(1) of the Social Security Contributions and Benefits Act 1992—“employed earner”,“lower earnings limit”,“tax year”, and“working life”.
Schedule 16 contains amendments to do with bereavement support payment.
The Secretary of State may by regulations provide that a person is not to be paid bereavement support payment for any period during which the person is a prisoner.
“Prisoner” means a person (in Great Britain or elsewhere) who is—
imprisoned or detained in legal custody, or
unlawfully at large.
In the case of a person remanded in custody for an offence, regulations under subsection (1) may be made so as to apply only if a sentence of a specified description is later imposed on the person for the offence.
Private pensions
Transfer of pension benefits
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If no regulations have been made under section 34 by the end of the period of 7 years beginning with the day on which it comes into force, that section is repealed at the end of that period.
Section 71 of the Pension Schemes Act 1993 (basic principle as to short service benefit) is amended as follows.
In subsection (1)(a), after “service,” insert—.
After subsection (9) insert—
In section 101AA of the 1993 Act (early leavers: cash transfer sums and contribution refunds), in subsection (4)(b), after “(a)” insert “ , (aa) ”.
Automatic enrolment
The Pensions Act 2008 is amended as follows.
In section 5 (automatic re-enrolment), after subsection (3) insert—
In section 30(7) (transitional period for defined benefits and hybrid schemes), at the end insert—
In section 10 of the Pensions Act 2008 (information to be given to workers)—
in subsection (1)—
for “must” substitute “ may ”;
in paragraphs (a) and (b), omit “all”;
in subsection (2) for “must state” substitute “ may in particular make provision about ”.
In Chapter 8 of Part 1 of the Pensions Act 2008, before section 88 (and the heading “Workers” above it) insert—
In consequence of subsection (2), the following are repealed—
section 292A of the Pensions Act 2004;
section 5(4) of the Pensions Act 2008;
section 18 of the Pensions Act 2011.
The Pensions Act 2008 is amended as follows.
After section 23 insert—
In section 24 (quality requirement: UK hybrid schemes), in subsection (1)(b), for “23” substitute “ 23A ”.
In section 28 (certification that quality requirement or alternative requirement is satisfied)—
after subsection (3A) insert—;
in subsection (4), after paragraph (d) insert—
In section 29 (transitional periods for money purchase and personal pension schemes), in subsections (1) and (3) omit “for money purchase and personal pension schemes”.
Section 30 (transitional period for defined benefits and hybrid schemes) is amended as follows.
In subsection (3), at the end of the substituted subsection (2) insert—
In subsection (5), in the substituted subsection (2)—
in paragraph (a), after “defined benefits scheme” insert “ other than a scheme to which section 30(11)(a) applies ”;
in paragraph (aa) (inserted by section 40 of this Act), after “a hybrid scheme” insert “ other than a scheme to which section 30(11)(b) applies ”;
after paragraph (c) (inserted by section 40 of this Act), insert—
After subsection (10) (inserted by section 40 of this Act) insert—
Section 30 of the Pensions Act 2008 (transitional period for defined benefits and hybrid schemes) is amended as follows.
In subsection (2)(b) and (c), for “a hybrid scheme” substitute “ a defined benefits member of a hybrid scheme ”.
In subsection (3), in the substituted subsection (2)—
after “becomes” insert “ (a) ”;
for “or a hybrid scheme” substitute
In subsection (5), in the substituted subsection (2)—
in paragraph (a), for “or a hybrid scheme, or” substitute—;
after paragraph (b) insert—.
After subsection (9) insert—
Subsection (7) applies if—
an employer whose first enrolment date is before the date on which the amendments made by this section come into force (“the commencement date”) has given a jobholder notice under section 30(3) of the 2008 Act,
the conditions in section 30(2) of that Act have continued to be satisfied during the period beginning with the employer's first enrolment date and ending with the day before the commencement date, and
had the amendments made by this section come into force on 19 December 2012, the condition in section 30(2)(c) of that Act would not have been satisfied at a time during that period.
19 December 2012, or
if later, the employer's first enrolment date;
Expressions used in this section and in section 30 of the 2008 Act have the same meaning in this section as in that section.
The Pension Schemes Act 1993 is amended as follows.
In section 123 (payment by Secretary of State of unpaid scheme contributions on employer insolvency: interpretation)—
in subsection (3), for the definition of “contract of employment” and related expressions substitute—;
in subsection (3), in paragraph (b) of the definition of “holiday pay”, for “the employee's contract of employment” substitute “ the worker's contract ”;
after subsection (3) insert—
In section 124 (Secretary of State's duty to pay unpaid contributions)—
for “an employee”, in each place, substitute “ a worker ”;
for “the employee”, in each place, substitute “ the worker ”;
for “the employee's” substitute “the worker's”;
for “employees”, in each place, substitute “ workers ”.
In section 161, for “contract of employment” substitute “ worker's contract ”.
In section 165(7)—
in paragraph (a), for “contract of employment the employee” substitute “ worker's contract the worker ”;
in paragraph (b), for “employee” substitute “ worker ”.
Other
Schedule 18 permits the Secretary of State to make regulations—
restricting the charges that may be imposed on members of certain pension schemes;
imposing requirements relating to administration or governance that must be satisfied in relation to certain pension schemes.
In section 113 of the Pension Schemes Act 1993 (disclosure of information about schemes to members etc), after subsection (4) insert—
In the Financial Services and Markets Act 2000, after section 137F insert—
The Secretary of State may by regulations provide for the Pensions Act 2004, and regulations made under it, to have effect, so far as relating to the requirement to pay pension levy, as if the amendments made by the 2010 regulations had always had effect.
Regulations under this section may in particular—
modify the application of the Pensions Act 2004, or regulations made under it, in relation to amounts of pension levy required to be paid because of regulations under this section;
provide for interest to be charged at a specified rate on such amounts (including in respect of periods before the coming into force of regulations under this section).
In this section—“the 2010 regulations” means—regulations 2, 3 and 8 of the Pension Protection Fund and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2010 (S.I. 2010/196), and regulation 2 of the Occupational Pension Schemes (Levies) (Amendment) Regulations 2010 (S.I. 2010/1930);“pension levy” means—a levy under regulations made under section 117 of the Pensions Act 2004 (administration levy), a levy under regulations made under section 174 of that Act (initial levy), or a levy under section 175 of that Act (pension protection levies).
The Pensions Act 1995 is amended as follows.
After section 3 insert—
Section 4 (Pensions Regulator's power to suspend trustee of occupational pension scheme) is amended as follows.
In subsection (1)(f), after “paragraph” insert “ (aa), ”.
In subsection (2)(a), after “or (aa)” insert “ or, in a case where the Authority would have power to suspend a director or partner under paragraph (aa), by virtue of paragraph (f) ”.
Schedule 19 contains consequential amendments.
In section 16 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (grants to bodies concerned with accounting standards etc), in subsection (2), after paragraph (o) insert—.
In section 5(1) of the Pensions Act 2004, after paragraph (c) insert—.
Section 63 of the Pensions Act 2004 is amended as follows.
After subsection (3) insert—
After subsection (4) insert—
See Schedule 20 for amendments increasing the Pension Protection Fund compensation cap for people with long pensionable service.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 18 of the Public Service Pensions Act 2013 (restriction of existing pension schemes) is amended as follows.
After subsection (5) insert—
In each of subsections (6) and (8), after “(5)” insert “ or (5A) ”.
Final provisions
The Secretary of State or the Treasury may by order make consequential, incidental or supplementary provision in connection with any provision made by this Act.
An order under this section may amend, repeal, revoke or otherwise modify any enactment (whenever passed or made).
“Enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978.
Regulations and orders under this Act are to be made by statutory instrument.
A statutory instrument containing (whether alone or with other provisions)—may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
the first regulations under section 10,
an order under section 53 that amends or repeals a provision of an Act,
regulations under Schedule 17,
regulations under paragraph 2 of Schedule 18 or regulations under paragraph 7 of that Schedule that amend a provision of an Act, ...
the first regulations under paragraph 1 or 3 of that Schedule, or
the first regulations under paragraph 1 or 3 of that Schedule that make provision in relation to collective money purchase schemes within the meaning of Part 1 of the Pension Schemes Act 2021 (see section 1 of that Act).
Any other statutory instrument containing regulations or an order under this Act is subject to annulment in pursuance of a resolution of either House of Parliament.
A power to make regulations or an order under this Act may be used—
to make different provision for different purposes;
in relation to all or only some of the purposes for which it may be used.
Regulations or orders under this Act may include incidental, supplementary, consequential, transitional, transitory or saving provision.
This Act extends to England and Wales and Scotland only, subject to the following provisions of this section.
Any amendment or repeal made by this Act has the same extent as the enactment to which it relates.
This Part extends also to Northern Ireland.
This Act comes into force on such day or days as the Secretary of State may by order appoint, subject as follows.
The following come into force on the day on which this Act is passed—
section 29;
section 51;
this Part.
The following come into force at the end of the period of 2 months beginning with the day on which this Act is passed—
Part 3 ;
section 41;
paragraph 30(2) of Schedule 13.
Part 1 comes into force on 6 April 2016, so far as not brought into force earlier by an order under subsection (1).
The Secretary of State may by order—
amend subsection (4) so as to replace the reference to 6 April 2016 with a later date, and
make corresponding amendments in Part 1 or any enactment amended by it.
Section 52 comes into force on such day or days as the Treasury may by order appoint.
An order under subsection (1) or (6) may appoint different days for different purposes.
The Secretary of State may by order make transitional, transitory or saving provision in connection with the coming into force of any provision of this Act.
This Act may be cited as the Pensions Act 2014.
Transitional rate of state pension: calculating the amount
Introduction
This Schedule sets out how to calculate the amounts used to work out the transitional rate of a person's state pension.
Part 2 of the Schedule sets out how to calculate the amount for a person's pre-commencement qualifying years.
Part 3 of the Schedule sets out how to calculate the amount for a person's post-commencement qualifying years (if any).
Amount for pre-commencement qualifying years
How to calculate the amount for pre-commencement qualifying years
A person's amount for pre-commencement qualifying years is calculated as follows. Step 1 - calculate the person's pension under the old system Calculate the weekly rate based on the old state pension and graduated retirement benefit (see paragraph 3 for more about this). Step 2 - calculate a pension based on the new system Calculate the weekly rate based on the new state pension (see paragraph 4 for more about this). Step 3 - take whichever rate is higher (the foundation amount) Take whichever of the rates found under Steps 1 and 2 is higher. Step 4 - revalue to date when the person reached pensionable age Revalue the amount of that rate in accordance with paragraph 6. The amount for the person's pre-commencement qualifying years is the amount as revalued under Step 4.
Step 1: calculation of the person's pension under the old system
For the purposes of Step 1 of the calculation in paragraph 2, the weekly rate based on the old state pension and graduated retirement benefit is—
the rate of any Category A retirement pension and graduated retirement benefit to which the person would have been entitled if the person had reached pensionable age on 6 April 2016, or
the rate of any graduated retirement benefit to which the person would have been entitled under section 36(7) of the National Insurance Act 1965 (persons not entitled to retirement pension) if the person had reached pensionable age on that date.
The following rules apply for the purposes of calculating that rate.
Calculate the rate that would have had effect on 6 April 2016 (but see sub-paragraph (6)).
Ignore—
the amendments made by paragraphs 53 and 55 of Schedule 12 (which limit Category A retirement pensions and graduated retirement benefit to people who reach pensionable age before 6 April 2016);
any requirement to make a claim;
any provision suspending payment of, or disqualifying a person from receiving, any amount;
section 45B of the Contributions and Benefits Act (reduction of additional pension because of pension sharing);
section 37 of the National Insurance Act 1965 (graduated retirement benefit for widows etc).
Read the reference in section 45(4)(b) of the Contributions and Benefits Act (additional pension) to a person's working life as a reference to the period—
beginning with the tax year in which the person reached 16, and
ending with the tax year before the one in which the person actually reached pensionable age.
If an order under section 150 or 150A of the Administration Act (up-rating) is made before 6 April 2016 and it provides for an increase to come into force after that date, it is to be treated for the purposes of calculating the rate under this paragraph as having already come into force.
Where regulations under section 22(5ZA) of the Contributions and Benefits Act have the effect that a person is credited, on or after 6 April 2016, with earnings or contributions for a tax year starting before that date, the earnings or contributions are to be treated for the purposes of calculating the rate under this paragraph as having been credited before 6 April 2016.
A determination under section 48A(2) of the Pension Schemes Act 1993 (contracting-out: reinstatement in state scheme following payment of contributions equivalent premium) made on or after 6 April 2016 is to be treated for the purposes of calculating the rate under this paragraph as having been made before 6 April 2016.
Step 2: calculation of a pension based on the new system
For the purposes of Step 2 of the calculation in paragraph 2, the weekly rate based on the new state pension is as follows.
If the person has 35 or more pre-commencement qualifying years, the rate is equal to—
the full rate of the state pension on 6 April 2016, less
any amount to reflect contracting out under the old system (see paragraph 5).
If the person has fewer than 35 pre-commencement qualifying years, the rate is equal to—
the appropriate proportion of the full rate of the state pension on 6 April 2016, less
any amount to reflect contracting out under the old system (see paragraph 5).
The “appropriate proportion”, in relation to a person, is—1 35×the person's number of pre-commencement qualifying years.
In paragraph 4(2) and (3) references to an “amount to reflect contracting out under the old system” are to an amount equal to any difference between—
the amount of any additional pension included in the Category A retirement pension calculated for the purposes of Step 1 of the calculation in paragraph 2, and
the amount of any additional pension that would have been included if—
for the purposes of calculating the amounts referred to in section 45(2)(c) and (d) of the Contributions and Benefits Act any earnings paid to or for the benefit of the person in respect of contracted-out employment were treated as if they were not in respect of contracted-out employment.
“Contracted-out employment” means employment qualifying a person for a pension provided by a salary related contracted-out scheme, a money purchase contracted-out scheme or an appropriate personal pension scheme (and expressions used in this definition have the same meaning as in the Pension Schemes Act 1993).
Step 4: revaluation
This paragraph determines how the amount mentioned in Step 4 of the calculation in paragraph 2 is to be revalued for the purposes of that Step.
If the amount is equal to or less than the full rate of the state pension on 6 April 2016, the amount is to be revalued in accordance with increases in the full rate of the state pension (see sub-paragraph (4)).
If the amount is greater than the full rate of the state pension on 6 April 2016—
so much of the amount as is equal to the full rate of the state pension on 6 April 2016 is to be revalued in accordance with increases in the full rate of the state pension (see sub-paragraph (4)), and
so much of the amount as exceeds the full rate of the state pension on that date is to be revalued in accordance with increases in the general level of prices (see sub-paragraph (5)).
For the purposes of sub-paragraphs (2) and (3)(a), an amount is revalued in accordance with increases in the full rate of the state pension by increasing it by the same percentage as any increase in the full rate of the state pension in the period—
beginning with 6 April 2016, and
ending with the day on which the person reached pensionable age.
For the purposes of sub-paragraph (3)(b), an amount is revalued in accordance with increases in the general level of prices by adding—
the amount, and
the amount multiplied by the revaluing percentage specified in the last order under section 148AC(3) of the Administration Act to come into force before the person reached pensionable age.
Amount for post-commencement qualifying years
A person's amount for post-commencement qualifying years (if any) is calculated as follows.
If the person has 35 or more post-commencement qualifying years, the amount is equal to the full rate of the state pension on the day on which the person reached pensionable age.
If the person has fewer than 35 post-commencement qualifying years, the amount is equal to the following proportion of the full rate of the state pension on the day on which the person reached pensionable age—1 35×the person's number of post-commencement qualifying years.
Transitional rate of state pension: up-rating
This Schedule sets out how to up-rate the transitional rate of a person's state pension.
In this Schedule a reference to the transitional rate of a person's state pension is to the rate—
taking into account any reduction under section 14, but
ignoring any increase under section 17.
The transitional rate of a person's state pension is to be increased under this paragraph if it is equal to or less than the full rate.
If at any time the full rate of the state pension is increased, the person's transitional rate is increased (at that time) by the same percentage as the increase in the full rate.
The transitional rate of a person's state pension is to be increased under this paragraph if it exceeds the full rate.
If at any time the full rate of the state pension is increased, the person's transitional rate is increased (at that time) by the same amount as the amount by which the full rate is increased.
If at any time an order under section 151A of the Administration Act comes into force, the person's transitional rate is increased (at that time) by an amount equal to the appropriate percentage of the excess.
In sub-paragraph (3)—“the appropriate percentage” means the percentage specified in the order, and“the excess” means the amount by which the transitional rate exceeded the full rate immediately before the order came into force.
Survivor's pension under section 7: inherited amount
Introduction
This Schedule—
sets out the circumstances in which a person (the “pensioner”) is entitled to an inherited amount for the purpose of section 7, and
determines that amount.
Dead spouse or civil partner in old state pension system etc
A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—
the marriage took place or the civil partnership was formed before 6 April 2016,
the spouse or civil partner died before 6 April 2016,
the pensioner was under pensionable age when the spouse or civil partner died, and
the pensioner would, on reaching pensionable age, have been entitled to a Category B retirement pension under section 48B(4) or (4A) or 48BB of the Contributions and Benefits Act if the words “before 6 April 2016” were omitted.
The inherited amount is equal to the weekly rate at which that Category B retirement pension would have been payable on the day on which the pensioner reached pensionable age if any element of the rate attributable to the basic pension were ignored.
A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—
the marriage took place or the civil partnership was formed before 6 April 2016,
the spouse or civil partner reached pensionable age before 6 April 2016 but died on or after that date,
the pensioner was under pensionable age when the spouse or civil partner died, and
the pensioner would, on reaching pensionable age, have been entitled to a Category B retirement pension under section 48BB of the Contributions and Benefits Act if in subsection (3) of that section: (i) the words “before 6 April 2016” were omitted, and (ii) the reference to a bereavement allowance were a reference to bereavement support payment under section 30 of this Act.
The inherited amount is equal to the weekly rate at which that Category B retirement pension would have been payable on the day on which the pensioner reached pensionable age if section 48BB(8) and (9) of the Contributions and Benefits Act were ignored.
A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—
the marriage took place or the civil partnership was formed before 6 April 2016,
the spouse or civil partner reached pensionable age before 6 April 2016 but died on or after that date,
the pensioner was over pensionable age when the spouse or civil partner died, and
the pensioner would, when the spouse or civil partner died, have been entitled to a Category B retirement pension under section 48B(1) or (1A) of the Contributions and Benefits Act if the words “before 6 April 2016” were omitted.
The inherited amount is equal to the weekly rate at which that Category B retirement pension would have been payable on the day on which the spouse or civil partner died if any element of the rate attributable to the basic pension were ignored.
Dead spouse or civil partner in new state pension system
A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—
the marriage took place or the civil partnership was formed before 6 April 2016,
the pensioner was over pensionable age when the spouse or civil partner died,
the spouse or civil partner was, immediately before his or her death, entitled to a state pension payable at the transitional rate, and
that transitional rate exceeded the full rate of the state pension.
The inherited amount is half of the amount by which the transitional rate of the state pension for the spouse or civil partner exceeded the full rate of the state pension immediately before the death.
A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—
the marriage took place or the civil partnership was formed before 6 April 2016,
the pensioner was under pensionable age when the spouse or civil partner died,
the spouse or civil partner was, immediately before his or her death, entitled to a state pension payable at the transitional rate,
that transitional rate exceeded the full rate of the state pension, and
the pensioner did not marry or form a civil partnership after the death and before reaching pensionable age.
The inherited amount is half of the amount by which the transitional rate of the state pension for the spouse or civil partner would have exceeded the full rate of the state pension if he or she had been alive on the day on which the pensioner reached pensionable age.
A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—
the marriage took place or the civil partnership was formed before 6 April 2016,
the pensioner was over pensionable age when the spouse or civil partner died,
the spouse or civil partner was under pensionable age when he or she died but would have been entitled to a state pension payable at the transitional rate if he or she had reached pensionable age on the day of the death, and
that transitional rate would have exceeded the full rate of the state pension.
The inherited amount is half of the amount by which the transitional rate of the state pension for the spouse or civil partner would have exceeded the full rate of the state pension if he or she had reached pensionable age on the day of the death.
A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—
the marriage took place or the civil partnership was formed before 6 April 2016,
the pensioner was under pensionable age when the spouse or civil partner died,
the spouse or civil partner died on or after 6 April 2016,
the spouse or civil partner was under pensionable age when he or she died,
the spouse or civil partner would have been entitled to a state pension payable at the transitional rate if he or she had reached pensionable age on the same day as the pensioner,
that transitional rate would have exceeded the full rate of the state pension, and
the pensioner did not marry or form a civil partnership after the death and before reaching pensionable age.
The inherited amount is half of the amount by which the transitional rate of the state pension for the spouse or civil partner would have exceeded the full rate of the state pension if he or she had reached pensionable age on the same day as the pensioner.
Supplementary
When determining entitlement to, or calculating, an inherited amount under this Schedule based on entitlement to an old state pension or a state pension under this Part of this Act ignore—
any requirement to make a claim for that pension;
any provision suspending payment of, or disqualifying a person from receiving, any amount of that pension.
Survivor's pension under section 7: up-rating
Introduction
This Schedule sets out how to up-rate the rate of a person's state pension under section 7.
In this Schedule a reference to the rate of a person's state pension is to the rate—
ignoring any increase under section 17.
Rate of section 7 pension, when added to any priority pension, is less than the full rate
The rate of the person's state pension under section 7 is to be increased under this paragraph if, when added to the amount of any state pension that has priority, it is equal to or less than the full rate of the state pension.
If at any time the full rate is increased, the rate of the person's state pension under section 7 is increased (at that time) by the same percentage as the increase in the full rate.
Rate of section 7 pension, when added to any priority pension, straddles the full rate
The rate of the person's state pension under section 7 is to be increased under this paragraph if—
the amount of any state pension that has priority is less than the full rate of the state pension, but
the rate of the state pension under section 7, when added to the amount of any state pension that has priority, exceeds the full rate.
If at any time the full rate of the state pension is increased, the rate of the person's state pension under section 7 is increased (at that time) by an amount equal to the appropriate percentage of the shortfall immediately before that time.
If at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under section 7 is increased (at that time) by an amount equal to the appropriate percentage of the excess immediately before the order comes into force.
In this paragraph—“the appropriate percentage”—in sub-paragraph (2), means the percentage by which the full rate is increased; in sub-paragraph (3), means the percentage specified in the order;“the excess” means the amount by which the rate of the state pension under section 7, when added to the amount of any state pension that has priority, exceeds the full rate;“the shortfall” means the amount by which the amount of any state pension that has priority is less than the full rate.
Priority pension alone is equal to or higher than the full rate
The rate of the person's state pension under section 7 is to be increased under this paragraph if the amount of any state pension that has priority is equal to or higher than the full rate of the state pension.
If at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under section 7 is increased (at that time) by the percentage specified in the order.
Survivor's pension under section 9: inherited deferral amount
Introduction
This Schedule—
sets out the circumstances in which a person (the “pensioner”) is entitled to an inherited deferral amount for the purpose of section 9, and
determines that amount.
Dead spouse or civil partner entitled to old state pension with deferral increase
A pensioner whose spouse or civil partner has died is entitled to an inherited deferral amount under this paragraph if—
the spouse or civil partner was entitled to an old state pension with an increase under paragraph 1 or 2A of Schedule 5 to the Contributions and Benefits Act, and
the pensioner would, on reaching pensionable age or on the death of the spouse or civil partner, have been entitled to an old state pension if in the relevant provisions of the Contributions and Benefits Act: (i) the words “before 6 April 2016” were omitted, and (ii) any reference to a bereavement allowance included a reference to bereavement support payment under section 30 of this Act.
The inherited deferral amount is equal to the amount by which the weekly rate of the old state pension for the pensioner would have been increased under paragraph 4 of Schedule 5 to the Contributions and Benefits Act on the day on which the pensioner became entitled to the inherited deferral amount.
For the purposes of calculating the amount of that increase, paragraph 4(1A) of Schedule 5 to the Contributions and Benefits Act has effect as if after the words “apart from” (in each place) there were inserted “ this paragraph and ”.
Dead spouse or civil partner's entitlement to old state pension deferred at time of death
A pensioner whose spouse or civil partner has died is entitled to an inherited deferral amount under this paragraph if—
the spouse or civil partner's entitlement to an old state pension was deferred when he or she died, and
the pensioner would, on reaching pensionable age or on the death of the spouse or civil partner, have been entitled to an old state pension if in the relevant provisions of the Contributions and Benefits Act: (i) the words “before 6 April 2016” were omitted, and (ii) any reference to a bereavement allowance included a reference to bereavement support payment under section 30 of this Act.
The inherited deferral amount is equal to the amount by which the weekly rate of the old state pension for the pensioner would have been increased under paragraph 4 of Schedule 5 to the Contributions and Benefits Act on the day on which the pensioner became entitled to the inherited deferral amount.
For the purposes of calculating the amount of that increase—
a pensioner who is not entitled to a choice under section 8 is to be treated as having met the condition in paragraph 4(1)(c) of Schedule 5 to the Contributions and Benefits Act,
paragraph 4(1A) of Schedule 5 to the Contributions and Benefits Act has effect as if after the words “apart from” (in each place) there were inserted “ this paragraph and ”.
In this paragraph “deferred” has the meaning given by section 55(3) of the Contributions and Benefits Act.
“The relevant provisions” of the Contributions and Benefits Act
For the purposes of this Schedule “the relevant provisions” of the Contributions and Benefits Act are those mentioned in section 8(9)(b).
Supplementary
When determining entitlement to, or calculating, an inherited deferral amount under this Schedule based on entitlement to an old state pension ignore—
any requirement to make a claim for that pension;
any provision suspending payment of, or disqualifying a person from receiving, any amount of that pension.
Reduced rate elections: effect on rate of section 4 pension
Introduction
This Schedule modifies the rules about the transitional rate of the state pension for a woman if a reduced rate election was in force in respect of her at the beginning of the relevant 35-year period (and expressions used in this paragraph have the same meaning as in section 11).
Increased transitional rate for woman married to person over pensionable age etc
This paragraph applies to the woman if on reaching pensionable age—
she is married to a person who has reached pensionable age, or
she is in a civil partnership with a person who has reached that age.
The transitional rate of the state pension for the woman is—
the rate determined for her under section 5, or
if higher, a weekly rate equal to the modified amount for her pre-commencement qualifying years alone.
The modified amount for the woman's pre-commencement qualifying years alone is the amount that would be calculated under Schedule 1 for her pre-commencement qualifying years alone if the basic pension in any Category A retirement pension calculated for her for the purposes of paragraph 3 of that Schedule were equal to the basic Category B amount.
“The basic Category B amount” is the amount specified in paragraph 5 of Part 1 of Schedule 4 to the Contributions and Benefits Act on 6 April 2016.
To find out what happens if the marriage or civil partnership comes to an end, see paragraph 4.
Increased transitional rate for widows or divorcees etc
This paragraph applies to the woman if on reaching pensionable age she is not married or in a civil partnership but she has been married or in a civil partnership before.
The transitional rate of the state pension for the woman is—
the rate determined for her under section 5, or
if higher, a weekly rate equal to the modified amount for her pre-commencement qualifying years alone.
The modified amount for the woman's pre-commencement qualifying years alone is the amount that would be calculated under Schedule 1 for her pre-commencement qualifying years alone if the basic pension in any Category A retirement pension calculated for her for the purposes of paragraph 3 of that Schedule were equal to the full amount of the basic pension.
“The full amount of the basic pension” is the amount of the basic pension specified in section 44(4) of the Contributions and Benefits Act on 6 April 2016.
Recalculation of transitional rate where circumstances change
If the woman is married or in a civil partnership on reaching pensionable age but the marriage or civil partnership comes to an end (because of the death of her spouse or civil partner or otherwise)—
her transitional rate is to be recalculated applying paragraph 3(2), and
Schedule 2 (up-rating) applies as if the recalculated rate had been the woman's transitional rate on the day on which she reached pensionable age.
For the purposes of this paragraph—
a civil partnership is not to be treated as having come to an end by reason of its having been converted into a marriage under Part 3 of the Marriage and Civil Partnership (Northern Ireland) (No. 2) Regulations 2020;
a civil partnership is not to be treated as having come to an end by reason of its having been converted into a marriage under Part 3 or 4 of the Marriage of Same Sex Couples (Conversion of Civil Partnership) Regulations 2014 where it is a convertible Northern Ireland civil partnership as defined by regulation 2 of those Regulations.
For the purposes of this paragraph, a marriage is not to be treated as having come to an end by reason of its having been converted into a civil partnership under Part 3, 4 or 5 of the Marriage and Civil Partnership (Northern Ireland) (No. 2) Regulations 2020.
If neither of paragraphs 2 and 3 apply to the woman but she subsequently comes within paragraph (a) or (b) of paragraph 2(1)—
her transitional rate is to be recalculated applying paragraph 2(2), and
Schedule 2 (up-rating) applies as if the recalculated rate had been the woman's transitional rate on the day on which she reached pensionable age.
But the woman's rate is not to be recalculated under sub-paragraph (1) if it has already been recalculated under paragraph 4.
Nothing in paragraph 4 or 5 affects—
the amount of state pension to which a woman is entitled for periods before that paragraph applies to her, or
the amount of any increase under section 17 in a case where the period for which the woman's state pension is deferred has ended before that paragraph applies to her.
Reduced rate elections: basic amount of state pension under section 12
This Schedule—
sets out the circumstances in which a woman is entitled to a basic amount for the purpose of section 12, and
determines that basic amount.
A woman is entitled to a basic amount under this paragraph if she has reached pensionable age and—
she is married to a person who has reached pensionable age, or
she is in a civil partnership with a person who has reached that age.
The basic amount is the amount specified in paragraph 5 of Part 1 of Schedule 4 to the Contributions and Benefits Act on the day on which the woman became entitled under this paragraph.
A woman is entitled to a basic amount under this paragraph if—
on reaching pensionable age she is not married or in a civil partnership but she has been married or in a civil partnership before, or
on reaching pensionable age she was married or in a civil partnership and the marriage or civil partnership has come to an end (because of the death of her spouse or civil partner or otherwise).
The basic amount is the amount of the basic pension specified in section 44(4) of the Contributions and Benefits Act on the day on which the woman became entitled under this paragraph.
A woman who is entitled to a basic amount under paragraph 3 is not entitled to a basic amount under paragraph 2.
Pension sharing: appropriate weekly rate under section 13
Introduction
This Schedule sets out the appropriate weekly rate of a person's state pension under section 13.
Appropriate weekly rate for pensioner with old state scheme pension credit
This paragraph sets out the appropriate weekly rate if the person is entitled to a state pension under section 13 because of an old state scheme pension credit.
If the person became entitled to the old state scheme pension credit in or after the final relevant year, the appropriate weekly rate is a weekly rate equal to the person's notional rate.
If the person became entitled to the old state scheme pension credit before the final relevant year, the appropriate weekly rate is a weekly rate equal to the person's notional rate multiplied by the appropriate revaluation percentage.
For the purposes of sub-paragraphs (2) and (3), a person's “notional rate” is the weekly rate of a notional pension under section 13 the cash equivalent of which would, on the valuation day, have been equal to the amount of the old state scheme pension credit.
For the purposes of sub-paragraph (4) assume that the notional pension becomes payable on the later of—
the day on which the person reaches pensionable age, and
the valuation day.
The “appropriate revaluation percentage” is the percentage specified, in relation to earnings factors for the tax year in which the person became entitled to the old state scheme pension credit, by the last order under section 148 of the Administration Act to come into force before the end of the final relevant year.
In this paragraph—“final relevant year” means the tax year immediately before that in which the person reaches pensionable age;“valuation day” means the day on which the person became entitled to the old state scheme pension credit.
Appropriate weekly rate for pensioner with new state scheme pension credit
This paragraph sets out the appropriate weekly rate if the person is entitled to a state pension under section 13 because of a new state scheme pension credit.
If the person was over pensionable age when he or she became entitled to the new state scheme pension credit, the appropriate weekly rate is a weekly rate equal to the amount of the credit.
If the person was under pensionable age when he or she became entitled to the new state scheme pension credit, the appropriate weekly rate is a weekly rate equal to the amount of the credit multiplied by the appropriate revaluation percentage.
The “appropriate revaluation percentage” is the percentage specified, in relation to the tax year in which the person became entitled to the new state scheme pension credit, by the last order under section 148AD of the Administration Act to come into force before the person reached pensionable age.
Supplementary
Regulations may make provision about the calculation and verification of notional rates under paragraph 2.
The regulations may, in particular, provide—
for calculation or verification in such manner as may be approved by or on behalf of the Government Actuary, or
for things done under the regulations to be required to be done in accordance with guidance from time to time prepared by a person specified in the regulations.
Pension sharing: up-rating state pension under section 13
Introduction
This Schedule sets out how to up-rate the rate of a person's state pension under section 13.
In this Schedule a reference to the rate of a person's state pension is to the rate—
ignoring any increase under section 17.
In this Schedule “the total amount of any state pension that has priority”, in relation to a person's state pension under section 13, means the sum of—
the rate of any state pension to which the person is entitled under section 7, ...
the rate of any earlier state pension to which the person is entitled under section 13 (see sub-paragraph (2)).
Where a person is entitled to two or more state pensions under section 13 because he or she has become entitled to two or more state scheme pension credits, a pension arising because of an earlier credit is an “earlier” state pension for the purposes of sub-paragraph (1)(c).
Rate of section 13 pension, when added to any priority pension, is less than the full rate
The rate of the person's state pension under section 13 is to be increased under this paragraph if, when added to the total amount of any state pension that has priority, it is equal to or less than the full rate of the state pension.
If at any time the full rate is increased, the rate of the person's state pension under section 13 is increased (at that time) by the same percentage as the increase in the full rate.
Rate of section 13 pension, when added to any priority pension, straddles the full rate
The rate of the person's state pension under section 13 is to be increased under this paragraph if—
the total amount of any state pension that has priority is less than the full rate of the state pension, but
the rate of the state pension under section 13, when added to the total amount of any state pension that has priority, exceeds the full rate.
If at any time the full rate of the state pension is increased, the rate of the person's state pension under section 13 is increased (at that time) by an amount equal to the appropriate percentage of the shortfall immediately before that time.
If at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under section 13 is increased (at that time) by an amount equal to the appropriate percentage of the excess immediately before the order comes into force.
In this paragraph—“the appropriate percentage”—in sub-paragraph (2), means the percentage by which the full rate is increased; in sub-paragraph (3), means the percentage specified in the order;“the excess” means the amount by which the rate of the state pension under section 13, when added to the total amount of any state pension that has priority, exceeds the full rate;“the shortfall” means the amount by which the total amount of any state pension that has priority is less than the full rate.
Priority pension alone is equal to or higher than the full rate
The rate of the person's state pension under section 13 is to be increased under this paragraph if the total amount of any state pension that has priority is equal to or higher than the full rate of the state pension.
If at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under section 13 is increased (at that time) by the percentage specified in the order.
Pension sharing: appropriate weekly reduction under section 14
Introduction
This Schedule sets out the appropriate weekly reduction in the rate of a person's state pension for the purposes of section 14.
Appropriate weekly reduction for person subject to old state scheme pension debit
This paragraph sets out the appropriate weekly reduction if the person is subject to an old state scheme pension debit.
If the person became subject to the old state scheme pension debit in or after the final relevant year, the appropriate weekly reduction is an amount equal to the person's notional rate.
If the person became subject to the old state scheme pension debit before the final relevant year, the appropriate weekly reduction is an amount equal to the person's notional rate multiplied by the appropriate revaluation percentage.
For the purposes of sub-paragraphs (2) and (3), a person's “notional rate” is the weekly rate of a notional pension under section 4 the cash equivalent of which would, on the valuation day, have been equal to the amount of the old state scheme pension debit.
For the purposes of sub-paragraph (4) assume that the notional pension becomes payable on the later of—
the day on which the person reaches pensionable age, and
the valuation day.
The “appropriate revaluation percentage” is the percentage specified, in relation to earnings factors for the tax year in which the person became subject to the old state scheme pension debit, by the last order under section 148 of the Administration Act to come into force before the end of the final relevant year.
In this paragraph—“final relevant year” means the tax year immediately before that in which the person reaches pensionable age;“valuation day” means the day on which the person became subject to the old state scheme pension debit.
Appropriate weekly reduction for person subject to new state scheme pension debit
This paragraph sets out the appropriate weekly reduction if the person is subject to a new state scheme pension debit.
If the person was over pensionable age when he or she became subject to the new state scheme pension debit, the appropriate weekly reduction is an amount equal to the amount of the debit.
If the person was under pensionable age when he or she became subject to the new state scheme pension debit, the appropriate weekly reduction is an amount equal to the amount of the debit multiplied by the appropriate revaluation percentage.
The “appropriate revaluation percentage” is the percentage specified, in relation to the tax year in which the person became subject to the new state scheme pension debit, by the last order under section 148AD of the Administration Act to come into force before the person reached pensionable age.
Supplementary
Regulations may make provision about the calculation and verification of notional rates under paragraph 2.
The regulations may, in particular, provide—
for calculation or verification in such manner as may be approved by or on behalf of the Government Actuary, or
for things done under the regulations to be required to be done in accordance with guidance from time to time prepared by a person specified in the regulations.
Pension sharing: amendments
Family Law (Scotland) Act 1985 (c. 37)
In section 27 of the Family Law (Scotland) Act 1985 (interpretation), in subsection (1), in the definition of “relevant state scheme rights”—
before paragraph (a) insert—;
in paragraph (b) after “55A” insert “ or 55AA ”.
Social Security Contributions and Benefits Act 1992 (c. 4)
The Contributions and Benefits Act is amended as follows.
In section 21 (contribution conditions), in subsection (1), after “section 55A” insert “ or 55AA ”.
In section 43 (persons entitled to more than one retirement pension), in subsection (6), after “section 55A” insert “ or 55AA ”.
Section 55A (shared additional pension) is amended as follows.
For subsection (1) substitute—
In subsections (2) and (3), after “shared additional pension” insert “ under this section ”.
In subsections (3), (4), (5) and (7) before “state scheme pension credit” (in each place) insert “ old ”.
At the end of the heading insert “ because of an old state scheme pension credit ”.
After section 55A insert—
Section 55B (reduction of additional pension in Category A retirement pension: pension sharing) is amended as follows.
In subsection (1)(a), for “a” substitute “ an old ”.
In subsection (5), for “55A above” substitute “ 55A or 55AA (as the case may be) ”.
In subsection (8), in the definition of “state scheme pension debit”, before “state” insert “ old ”.
Social Security Administration Act 1992 (c. 5)
In the Administration Act, after section 148AC (inserted by Schedule 12 to this Act) insert—
Welfare Reform and Pensions Act 1999 (c. 30)
The Welfare Reform and Pensions Act 1999 is amended as follows.
Section 47 (shareable state scheme rights) is amended as follows.
After subsection (1) insert—
In subsection (2)—
after “shareable” insert “ old ”;
in paragraph (b), after “55A” insert “ or 55AA ”.
After subsection (2) insert—
Section 49 (creation of state scheme pension debits and credits) is amended as follows.
For subsection (1) substitute—
In subsection (2), after “shareable” insert “ old ”.
In subsection (3)(b), for “relevant” substitute “ shareable old ”.
After subsection (5) insert—
In subsection (6), at the appropriate place insert—
At the end of the heading insert “ : transferor in old state pension system or pension sharing activated before 6 April 2016 ”.
After section 49 insert—
Section 51 (interpretation) is amended as follows.
The current text becomes subsection (1).
In that subsection for the definition of “shareable state scheme rights” substitute—.
After that subsection insert—
State Pension Credit Act 2002 (c. 16)
In section 16 of the State Pension Credit Act 2002 (meaning of “retirement pension income”), in subsection (1), for paragraph (b) substitute—.
Gender Recognition Act 2004 (c. 7)
In Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions), in paragraph 9(1)(a) and (3), after “section 55A” insert “ or 55AA ”.
State pension: amendments
Amendments to do with new state pension system
Forfeiture Act 1982 (c. 34)
In section 4 of the Forfeiture Act 1982 (Upper Tribunal to decide whether forfeiture rule applies to social security benefits), in the definition of “relevant enactment” in subsection (5), after the entry relating to the Pension Schemes Act 1993 insert— “ Part 1 of the Pensions Act 2014, ”.
Social Security Contributions and Benefits Act 1992 (c. 4)
The Contributions and Benefits Act is amended as follows.
In section 1 (outline of contributory system), in subsection (1)(a), after “this Act” insert “ or any other Act ”.
In section 13 (Class 3 contributions), in subsection (2), omit “contribution”.
After section 19A insert—
Section 22 (earnings factors) is amended as follows.
In subsection (2)—
in paragraph (a), omit the final “and”;
after paragraph (b) insert
After subsection (5) insert—
In section 122(1) (interpretation), in the definition of “benefit”, after paragraph (c) insert— “ (For the meaning of “benefit” in Part 1, see also section 19B) ”.
Social Security Administration Act 1992 (c. 5)
The Administration Act is amended as follows.
In section 1 (entitlement to benefit dependent on claim), in subsection (4), after paragraph (za) insert—.
In section 5 (regulations about claims for and payments of benefits), in subsection (2), after paragraph (za) insert—.
In section 71 (overpayments - general), in subsection (11), before paragraph (a) insert—.
In section 73 (overlapping benefits - general)—
in subsection (1), after “adjusting” insert “ state pension under Part 1 of the Pensions Act 2014 or ”;
in subsection (4), before paragraph (a) insert—.
In section 121DA (interpretation of Part 6), in subsection (1), after paragraph (hk) insert—.
In section 122B (supply of other government information for fraud prevention and verification), in subsection (3)(b), after “Part 4 of that Act” insert “ , Part 1 of the Pensions Act 2014 ”.
In section 124 (age, death and marriage), in subsection (1), after paragraph (ae) insert—.
In section 125 (regulations as to notification of deaths), in subsection (1), after “Part 4 of that Act” insert “ , Part 1 of the Pensions Act 2014 ”.
After section 148AB insert—
In section 150 (annual up-rating of benefits), in subsection (1), after paragraph (o) insert—.
In section 150A (annual up-rating), in subsection (1), before paragraph (a) insert—.
In section 151 (up-rating: supplementary), in subsection (2)—
for “(dza) or (e)” substitute “ (dza), (e) or (p) ”;
after “order and” insert;
at the end insert
After section 151 insert—
Section 155A (power to anticipate pensions up-rating order) is amended as follows.
In subsection (1)(a)—
for “150 or 150A” substitute “ 150, 150A or 151A ”;
in sub-paragraph (i), after “by way of” insert “ state pension under the Pensions Act 2014, ”.
In subsection (2), after “an award is made of” insert “ a state pension, ”.
Section 163 (general financial arrangements) is amended as follows.
In subsection (1), before paragraph (a) insert—.
In subsection (2)(a), after “Contributions and Benefits Act” insert “ , Part 1 of the Pensions Act 2014 ”.
In subsection (3)(b), after “that Act” insert “ or Part 1 of the Pensions Act 2014 ”.
In section 170 (Social Security Advisory Committee), in subsection (5)—
in the definition of “the relevant enactments”, after paragraph (al) insert—;
in the definition of “the relevant Northern Ireland enactments”, after paragraph (al) insert—.
Section 179 (reciprocal agreements) is amended as follows.
In subsection (3)(a), after “Part 4 of that Act” insert “ , Part 1 of the Pensions Act 2014 ”.
In subsection (4), after paragraph (ah) insert—.
In subsection (5)—
after “Act 2007” insert “ or Part 1 of the Pensions Act 2014 ”;
after paragraph (ac) insert—.
In section 187 (inalienability), in subsection (1), after paragraph (za) insert—.
In section 190 (parliamentary control of orders and regulations), in subsection (1)(a) after “150A,” insert “ 151A, ”.
In section 191 (interpretation), in the definition of “benefit”, after “universal credit,” insert “ state pension under Part 1 of the Pensions Act 2014, ”.
Social Security Act 1993 (c. 3)
In section 2 of the Social Security Act 1993 (payments into National Insurance Fund out of money provided by Parliament), in subsection (4)(a), after “paragraphs” insert “ (za), ”.
Pensions Act 1995 (c. 26)
In Schedule 4 to the Pensions Act 1995 (pensionable age), in paragraph 1, for “and Part 1 of the Welfare Reform Act 2007” substitute “ , Part 1 of the Welfare Reform Act 2007 and the Pensions Act 2014 ”.
Social Security Act 1998 (c. 14)
The Social Security Act 1998 is amended as follows.
In section 2 (use of computers), in subsection (2)—
in paragraph (k), omit the final “or”;
after paragraph (l) insert—.
In section 8 (decisions by Secretary of State)—
in subsection (3), after paragraph (aa) insert—;
in subsection (4), for “or Part 4 of that Act” substitute “ , Part 4 of that Act or Part 1 of the Pensions Act 2014 ”.
In section 11 (regulations with respect to decisions), in subsection (3), in the definition of “the current legislation”, for “and Part 4 of that Act” substitute “ , Part 4 of that Act and Part 1 of the Pensions Act 2014 ”.
In section 27 (restrictions on entitlement to benefit in certain cases of error), in subsection (7), in the definition of “benefit”, after paragraph (f) insert—
In section 28 (correction of errors in decisions etc), in subsection (3)—
in paragraph (h), omit the final “or”;
after paragraph (i) insert
In Schedule 3 (decisions against which an appeal lies), after paragraph 6B insert—
Child Support, Pensions and Social Security Act 2000 (c. 19)
Section 42 of the Child Support, Pensions and Social Security Act 2000 (disclosure of state pension information) is amended as follows.
In subsection (7), after paragraph (a) insert—.
In subsection (11), in the definition of “lump sum”, after “under” insert “ section 8 of the Pensions Act 2014 or ”.
Social Security Fraud Act 2001 (c. 11)
The Social Security Fraud Act 2001 is amended as follows.
In section 6A (definitions), in subsection (1)—
in the definition of “disqualifying benefit”, after paragraph (za) insert—;
in the definition of “sanctionable benefit”, before paragraph (b) insert—.
In section 10 (power to supplement and mitigate loss of benefit provisions), in subsection (3), after paragraph (be) insert—.
State Pension Credit Act 2002 (c. 16)
The State Pension Credit Act 2002 is amended as follows.
In section 7 (fixing of claimant's retirement provision for assessed income period), in subsection (6)(a), after “benefit under” insert “ Part 1 of the Pensions Act 2014 or ”.
In section 16 (meaning of “retirement pension income”), in subsection (1), before paragraph (a) insert—.
Income Tax (Earnings and Pensions) Act 2003 (c. 1)
In section 577 of the Income Tax (Earnings and Pensions) Act 2003 (United Kingdom social security pensions), in the definition of “state pension” in subsection (2), before paragraph (a) insert—.
Gender Recognition Act 2004 (c. 7)
The Gender Recognition Act 2004 is amended as follows.
Schedule 5 (benefits and pensions) is amended as follows.
After paragraph 6 insert—
In paragraph 7, in sub-paragraph (1), at the end insert “ (but this is subject to sub-paragraph (3)) ”.
In paragraph 10, in sub-paragraph (1), before paragraph (a) insert—.
Finance (No. 2) Act 2005 (c. 22)
The Finance (No. 2) Act 2005 is amended as follows.
In subsection (3), for “subsection (4)” substitute “ subsections (4) and (4A) ”.
After subsection (4) insert—
In section 9 (interpretation), in the definition of “state pension lump sum” in subsection (2), before paragraph (a) insert—.
Welfare Reform Act 2012 (c. 5)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amendments to do with old state pension system
Graduated retirement benefit
Section 36 of the National Insurance Act 1965 (graduated retirement benefit), so far as continuing in force, is amended as follows.
In subsection (7), for “has attained pensionable age” substitute “ attained pensionable age before 6 April 2016 ”.
In subsection (8), in the definition of “retirement pension”, after “any category” insert “ under the Social Security Contributions and Benefits Act 1992 ”.
Category A retirement pensions
The Contributions and Benefits Act is amended as follows.
In section 44(1) (Category A retirement pensions), for paragraph (a) substitute—.
Section 48 (use of former spouse's contributions) is amended as follows.
In subsection (1), after “person” insert “ who attained pensionable age before 6 April 2016 ”.
After subsection (2) insert—
Category B retirement pensions
The Contributions and Benefits Act is amended as follows.
In section 23A (contributions credits for relevant parents and carers), in subsection (1)(b), after “section 48A” insert “ or 48AA ”.
For section 48A substitute—
Section 48B (Category B retirement pension for widows and widowers) is amended as follows.
For subsections (1) to (1A) substitute—
After subsection (3) insert—
For subsection (4) substitute—
In subsection (6), after “subsection (4)” insert “ or (4A) ”.
In subsection (7), for “(4)” substitute “ (4A) ”.
After subsection (8) insert—
Section 48BB (Category B retirement pension: entitlement by reference to widowed parent's allowance or bereavement allowance where no dependent children) is amended as follows.
In subsection (1), for “who has attained pensionable age” substitute “ who attained pensionable age before 6 April 2016 ”.
In subsection (3), for “who has attained pensionable age” substitute “ who attained pensionable age before 6 April 2016 ”.
Section 48C (Category B retirement pension: general) is amended as follows.
In subsection (3), for “sections 48A(4)(b) and” substitute “ section ”.
In subsection (4), omit “48A(4),”.
For section 51 substitute—
After section 51 insert—
In section 52(3) (special provision for surviving spouses) for “prescribed maximum” substitute “ maximum amount specified in regulations ”.
Schedule 3 (contribution conditions for entitlement to benefit) is amended as follows.
In paragraph 5, for sub-paragraph (1) substitute—
In paragraph 5A(1), for paragraphs (b) and (c) substitute—
In Part 1 of Schedule 4 (rates of certain benefits), in paragraph 5, for “section 48A(3)” substitute “ section 48A(4) or 48AA(4) ”.
In Schedule 4A (additional pension: accrual rates for purposes of section 45(2)(c)), in paragraph 1(2), omit “, 48A(4)” (in both places).
In section 150 of the Administration Act (annual up-rating of benefits), in subsection (1), after paragraph (ab) insert—.
In section 46 of the Pension Schemes Act 1993 (effect of entitlement to guaranteed minimum pensions on payment of social security benefits), in subsection (6)(b)(iii), omit “48A,”.
In section 128 of the Pensions Act 1995 (additional pension: calculation of surpluses), in subsection (6), omit “48A,”.
In Schedule 4 to the Pensions Act 1995 (equalisation of, and increase in, pensionable age for men and women), omit paragraph 3(2) and (3).
In section 577 of the Income Tax (Earnings and Pensions) Act 2003 (United Kingdom social security pensions), in the definition of “state pension” in subsection (2)—
in paragraph (a), after “48A,” insert “ 48AA, ”;
in paragraph (b), after “1992” insert “ or any provision under the law of Northern Ireland that corresponds to section 48AA of SSCBA 1992 ”.
In Schedule 24 to the Civil Partnership Act 2004, omit paragraphs 25(6) and 28(6).
In Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions), in paragraph 8(1)(a) and (3), after “48A,” insert “ 48AA, ”.
In Schedule 4 to the Marriage (Same Sex Couples) Act 2013, omit paragraphs 11, 12, 13 and 16.
Category C retirement pensions: repeal of spent provisions
The Contributions and Benefits Act is amended as follows.
In section 63(f)(i) (descriptions of non-contributory benefits), for the words from “payable” to “widows” substitute “ payable in certain cases to a widow whose husband was over pensionable age on 5 July 1948 or to a woman whose marriage to a husband who was over pensionable age on that date was terminated otherwise than by his death ”.
Section 78 (Category C retirement pensions etc) is amended as follows.
Omit subsections (1), (2) and (5).
In subsections (7) and (8), omit “Category C or”.
In Part 3 of Schedule 4 —
omit paragraph 6 (rate of Category C retirement pension);
in paragraph 7 (rate of Category D retirement pension), for the text in the second column substitute the amount specified in paragraph 6 as the higher rate for a Category C retirement pension immediately before 6 April 2016.
In section 150A of the Administration Act (annual up-rating), in subsection (10), in the definition of “the specified amounts in the case of Category B, C or D retirement pensions”—
in paragraph (a), omit the final “and”;
in paragraph (b), for “amounts specified in paragraphs 6 and 7” substitute “ amount specified in paragraph 7 ”;
at the end of paragraph (b) insert.
In Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions) omit paragraph 11 and the heading above it.
Category D retirement pensions
In section 78(3) of the Contributions and Benefits Act (entitlement to a Category D retirement pension), for “and satisfies” substitute “ , who reached pensionable age before 6 April 2016 and who satisfies ”.
Age addition
In sections 63(g) and 79(1) of the Contributions and Benefits Act (age addition), after “retirement pension of any category” insert “ under this Act ”.
Christmas bonus
In section 150(2) of the Contributions and Benefits Act (Christmas bonus: interpretation), for the definition of “retirement pension” substitute—
Transition: same sex marriages
If marriage of same sex couples is not lawful under the law of Scotland when the amendments made by this Part of this Schedule come into force then, under the law of Scotland, references in the amendments to a married person do not include a person married to someone of the same sex; and related expressions (such as “spouse”) are to be read accordingly.
See also Part 1 of Schedule 2 to the Marriage (Same Sex Couples) Act 2013 (power to provide for English and Welsh marriages of same sex couples to be treated in Scotland as civil partnerships).
Amendments to do with state pension credit
The State Pension Credit Act 2002 is amended as follows.
In section 3 (savings credit), for subsection (1) substitute—
After that section insert—
In Schedule 1 to the Pensions Act 2007, omit paragraph 44.
Other amendments to do with Part 1
Social Security Contributions and Benefits Act 1992 (c. 4)
The Contributions and Benefits Act is amended as follows.
Section 39C (rate of widowed parent's allowance and bereavement allowance) is amended as follows.
In subsection (1), for the words from “45AA” to “as they apply” substitute “ 45AA and Schedules 4A and 4B below as they apply ”.
In subsection (3), for the words from “45AA” to “by virtue of subsection (1) above” substitute “ 45AA and Schedules 4A and 4B below by virtue of subsection (1) above ”.
In subsection (4), for the words from “45AA” to “below” substitute “ 45AA and Schedules 4A and 4B below ”.
Schedule 5 (pension increase or lump sum where entitlement to retirement pension is deferred) is amended as follows.
In the following provisions omit “(as those provisions have effect by virtue of section 2(7) of the Pensions Act 2011)”—paragraph 4(1A)(a), (b) and (c); paragraph 7B(5)(b)(i).
After paragraph 7 insert—
Pension Schemes Act 1993 (c. 48)
Section 46A of the Pension Schemes Act 1993 (retirement in tax year after 5 April 2020) is repealed.
Pensions Act 2008 (c. 30)
In the Pensions Act 2008, the following are repealed—
sections 102 and 103 (consolidation of additional pension);
Schedule 3 (consolidation of additional pension);
in Schedule 4 (minor and consequential amendments)—paragraph 4(2)(b) and (3)(b); paragraph 6(3); paragraph 7(a); paragraph 8(a); paragraph 9(2)(c); paragraph 10; paragraphs 13 to 22.
Pensions Act 2011 (c. 19)
In the Pensions Act 2011, the following are repealed—
Abolition of contracting-out for salary related schemes
Pension Schemes Act 1993: amendments
The Pension Schemes Act 1993 is amended as follows.
For “the abolition date” (in each place) substitute “ the first abolition date ”.
In the heading for Part 3 of the Act—
for “Certification of pension schemes” substitute “ Schemes that were contracted-out etc ”;
omit “and duties”.
For the heading to Chapter 1 of Part 3 substitute “ Schemes that were contracted-out: guaranteed minimum pensions and alteration of scheme rules etc ”.
Section 7 (issue of contracting-out certificates) is repealed (and accordingly, any certificates in force under that section immediately before this paragraph comes into force cease to have effect).
After section 7 insert—
Section 8 (meaning of “contracted-out employment”, “guaranteed minimum pension” and “minimum payment”) is amended as follows.
For subsection (1) substitute—
After subsection (1A) insert—
In subsection (2), in the definition of “guaranteed minimum pension”, for “by an occupational pension scheme” substitute “ , by a scheme that was a salary related contracted-out scheme, ”.
For subsection (4) substitute—
The italic heading above section 9 is repealed.
The italic heading above section 12A is repealed.
Sections 12A to 12D (requirements for certification applying to employment from 6 April 1997) are repealed.
For the italic heading above section 13 substitute “ Guaranteed minimum pensions ”.
Before section 13 insert—
For the purposes of section 12E it does not matter whether the scheme ceased to be contracted-out when the amendment made by paragraph 5 of this Schedule came into force or before that time.
But section 12E does not treat a scheme as having included any provision before this paragraph comes into force.
In section 13 (minimum pensions for earners), in subsection (2)—
for “is a married woman or widow who is liable” substitute “ was a married woman or widow who was liable ”;
after “Act 1992” insert “ at a time during a relevant year when she was in contracted-out employment by reference to the scheme ”;
at the end of that subsection insert—
Section 14 (earner's guaranteed minimum) is amended as follows.
For subsection (1) substitute—
In subsection (2), for “earnings such as are mentioned in subsection (1)” substitute “ excess earnings mentioned in subsection (1)(b) ”.
Section 17 (minimum pensions for widows, widowers and surviving civil partners) is amended as follows.
In subsection (4A), after paragraph (a) insert—.
After subsection (9) insert—
In section 20 (transfer of accrued rights), in subsection (1)(a)—
in sub-paragraph (i), after “under a” insert “ scheme that was a ”;
in sub-paragraph (ii)—
omit “which is not contracted-out,”;
after “under a” insert “ scheme that was a ”.
In section 23 (securing of benefits), in subsection (2), omit paragraph (d).
In section 24A—
the existing text becomes subsection (1), and
after that subsection insert—
In section 25 (power for HMRC to impose conditions as to investments and resources), in subsection (2), after “A” insert “ scheme that was a ”.
In the italic heading above section 37, for “scheme rules after certification” substitute “ rules by former salary related contracted-out schemes ”.
In section 37 (alteration of rules of contracted-out schemes) for subsections (1) to (3) substitute—
After section 37 insert—
For the heading to Chapter 2 of Part 3 substitute “ Reduction in social security benefits for members of schemes that were contracted-out ”.
In section 40 (scope of Chapter 2)—
omit paragraph (a);
in paragraph (c) for “such schemes” substitute “ schemes that were contracted-out pension schemes ”.
The italic heading above section 41 is repealed.
Section 41 (reduced rates of Class 1 contributions) is repealed.
Section 42 (review and alteration of reduced rates of Class 1 contributions) is repealed.
There is no duty, before the repeal of section 42 comes into force, to lay before Parliament any reports under that section.
In section 48A (additional pension and other benefits), in subsection (1), for the words from the beginning to the end of paragraph (b) substitute.
Section 49 (women, married women and widows) is repealed.
Section 50 (powers of HMRC to approve arrangements for scheme ceasing to be certified) is repealed.
In section 51 (calculation of guaranteed minimum pensions under approved arrangements), in subsection (1)(b), for “ceases” substitute “ ceased ”.
For section 52 substitute—
In section 53 (supervision: former contracted-out schemes), omit subsection (3).
Sections 55 to 68 (state scheme premiums) are repealed.
In section 87 (general protection principle), in subsection (1)(a), for sub-paragraph (i) substitute—.
In section 96 (further provisions concerning exercise of option to take cash equivalent in a particular way), in subsection (2), in paragraph (a)(i) omit “which is not a contracted-out scheme”.
In section 109 (annual increase of guaranteed minimum pensions), in subsection (3A)(b), omit “for the purposes of Part 3 of the Pensions Act 1995”.
In section 171 (questions arising in proceedings), in subsection (1), omit paragraph (b) and the “or” before it.
In section 178 (trustees and managers of schemes), in paragraph (a)—
after “1985” insert “ or ”;
omit “or Part II of Schedule 5 to the Child Support, Pensions and Social Security Act 2000”.
Section 181(1) (general interpretation) is amended as follows.
In the appropriate places insert—
Omit the definition of “abolition date”.
In the definition of “appropriate scheme” and “appropriate scheme certificate”, for “section 181A” substitute “ section 7B ”.
In the definition of “contracting-out certificate”, for “section 7 and section 181A” substitute “ section 7B ”.
In the definition of “contributions equivalent premium”, for “has the meaning given in” substitute “ means a premium that was paid under ”.
In the definition of “earner” and “earnings”, after “in accordance with” insert “ section 8(1B) of this Act and ”.
In the definition of “money purchase contracted-out scheme”, for “section 181A” substitute “ section 7B ”.
Section 181A (interpretation of references to money purchase contracted-out schemes or appropriate schemes after first abolition date) is repealed.
In section 185 (consultation about other regulations), omit subsection (9).
Schedule 2 (certification regulations) is amended as follows.
Omit paragraphs 1 to 4.
In paragraph 5(3A), for “a contracted-out occupational pension scheme which is being wound up,” substitute “ a scheme which was a contracted-out occupational pension scheme and which was being wound up before the second abolition date ”.
Omit paragraphs 6 to 8.
Schedule 4 (priority in bankruptcy) is amended as follows.
In paragraph 2—
in sub-paragraph (1), after “contributions to a” insert “ Northern Ireland ”;
in sub-paragraph (5), at the appropriate place insert—.
In paragraph 3—
in sub-paragraph (1), after “on account of a” insert “ Northern Ireland ”;
after sub-paragraph (5) insert—
Omit paragraph 4(2).
Other Acts: amendments
Social Security Contributions and Benefits Act 1992 (c. 4)
The Contributions and Benefits Act is amended as follows.
In section 1 (outline of contributory system), in subsection (3), omit the words after paragraph (b).
In section 4C (power to make provision in consequence of provision made by virtue of section 4B(2) etc), in subsection (5), in each of paragraphs (a) and (b) omit the words from “, including” to the end.
In section 8 (calculation of primary Class 1 contributions), in subsection (3), omit paragraph (c) and the “and” before it.
In section 9 (calculation of secondary Class 1 contributions), in subsection (3), omit paragraph (c) and the “and” before it.
In section 20 (descriptions of contributory benefits), in subsection (3), for “(reduction in state scheme contributions and benefits for members of certified schemes)” substitute “ (reduction in benefits for members of schemes that were contracted-out) ”.
In Schedule 1 (supplementary provisions relating to national insurance contributions), in paragraph 1, omit sub-paragraphs (2), (3), (6) and (9) to (11).
Social Security Administration Act 1992 (c. 5)
The Administration Act is amended as follows.
In section 150 (annual up-rating of benefits), in subsection (10A), for “the abolition date, as defined by section 181(1) of the Pensions Act,” substitute “ 6 April 2012 (the date appointed for the commencement of section 15(1) of the Pensions Act 2007) ”.
In section 191 (interpretation - general)—
in the definition of “money purchase contracted-out scheme”, for “section 181A” substitute “ section 7B ”;
in the definition of “personal pension scheme” etc, for “section 181A(6)” substitute “ section 7B(6) ”.
Pensions Act 1995 (c. 26)
The Pensions Act 1995 is amended as follows.
Section 51 (annual increase in rate of pension) is amended as follows.
For “the appointed day” (in each place) substitute “ 6 April 1997 ”.
For subsection (8) substitute—
For section 69 substitute—
In section 70 (section 69: supplementary), omit subsection (3).
In section 71 (effect of orders under section 69), in subsection (1)—
for “paragraph (a)” substitute “ paragraph (b) ”;
for “paragraph (b)” substitute “ paragraph (a) ”.
In section 72 (modification of public service pension schemes), in subsection (1), for “section 69(1)(b)” substitute “ section 69(1)(a) ”.
Sections 136(1), (3) and (5), 137(3) and (4) and 148 (amendments to do with contracting-out) are repealed.
Employment Rights Act 1996 (c. 18)
The Employment Rights Act 1996 is amended as follows.
In section 3 (note to be included in statement of initial employment particulars), omit subsection (5).
In section 11 (references to employment tribunals), in subsection (3), omit paragraph (a) (including the “and” at the end of it).
Child Support, Pensions and Social Security Act 2000 (c. 19)
The Child Support, Pensions and Social Security Act 2000 is amended as follows.
Section 42 (disclosure of state pension information) is amended as follows.
In subsection (3)(d), omit “which is not contracted-out employment”.
In subsection (11), omit the definition of “contracted-out employment”.
Part 2 of Schedule 5 (alternative to anti-franking rules) is repealed.
Employment Act 2002 (c. 22)
In section 15 of the Employment Act 2002 (use of information by HMRC), in subsection (2)(c), for “(certification of pension schemes etc)” substitute “ (schemes that were contracted-out etc) ”.
Pensions Act 2004 (c. 35)
In section 258 of the Pensions Act 2004 (pension protection on transfer of employment), in subsection (2)(c), for sub-paragraphs (i) and (ii) substitute “ complies with prescribed requirements ”.
Companies Act 2006 (c. 46)
The Companies Act 2006 is amended as follows.
In section 140 (interests to be disregarded: employer's rights of recovery under pension scheme or employee's share scheme), in subsection (2), omit “section 61 of the Pension Schemes Act 1993 or”.
In section 673 (interests to be disregarded in determining whether company has beneficial interest: employer's charges and other rights of recovery), in subsection (1)(b), omit sub-paragraph (i).
Pensions Act 2007 (c. 22)
The Pensions Act 2007 is amended as follows.
Section 15 (abolition of contracting-out for defined contribution pension schemes) is amended as follows.
In subsection (1), for “the abolition date” substitute “ 6 April 2012 ”.
In subsection (2), omit the definition of “the abolition date”.
In subsection (4), for “the abolition date” (in each place) substitute “ 6 April 2012 ”.
Schedule 4 (abolition of contracting-out for defined contribution pension schemes) is amended as follows.
In paragraphs 61, 62(1), (2)(a) and (b)(i) and (3), 65 and 66(2) for “the abolition date” (in each place) substitute “ 6 April 2012 ”.
In paragraph 67(1) omit the definition of “the abolition date”.
Pensions Act 2008 (c. 30)
The Pensions Act 2008 is amended as follows.
For section 21 substitute—
In section 22 (test scheme standard), for subsection (2) substitute—
Power to amend schemes to reflect abolition of contracting-out
Introduction
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What can the power be used to do?
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Creation of exceptions
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Requirement for actuary's certificate
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When can the power be used?
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Can the power be used more than once?
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Modifications for multi-employer or sectionalised schemes
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The power overrides other legislation
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Procedural requirements and supplementary matters
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Information
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Definitions
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Option to boost old retirement pensions
Great Britain
Social Security Contributions and Benefits Act 1992 (c. 4)
The Social Security Contributions and Benefits Act 1992 is amended as follows.
Section 1 (outline of contributory system) is amended as follows.
In subsection (2)—
omit “six”;
in paragraph (d), after “making up entitlement;” insert—.
In subsection (4)(a), for “and 3” substitute “ , 3 and 3A ”.
After section 14 insert—
If paragraph 3 comes into force before the day mentioned in section 56(4) of this Act, section 14A(2) as inserted by that paragraph has effect as if the reference to entitlement included the prospective entitlement of a person who—
has not yet reached pensionable age, but
will reach pensionable age before that day (assuming that the person lives until pensionable age).
In section 43 (persons entitled to more than one retirement pension), in subsection (1), after “subsection (2) below” insert “ and section 61ZC below (which deals with unusual cases involving units of additional pension) ”.
In section 44 (Category A retirement pension), in subsection (3)—
in paragraph (b), at the end insert “ or where the pensioner has one or more units of additional pension ”;
after paragraph (b) insert—
Section 45 (rate of additional pension in a Category A retirement pension) is amended as follows.
In subsection (1)—
after “shall be” insert;
at the end insert
In subsection (2), at the end of paragraph (d) insert
After subsection (2) insert—
In section 52 (special provision for surviving spouses), after subsection (3) insert—
After section 61 insert—
In section 122 (interpretation), in subsection (1), at the appropriate place insert—.
In section 176 (parliamentary control), in subsection (1)(a), at the appropriate places insert— “ section 14A; ” “ section 45(2A); ”.
In the heading to Schedule 1, for “and 3” substitute “ , 3 and 3A ”.
Social Security Administration Act 1992 (c. 5)
Section 162 of the Social Security Administration Act 1992 (destination of contributions) is amended as follows.
In subsection (5)(e), after “those contributions;” insert—.
In subsection (8)(c), for “or (e)” substitute “ , (e) or (ea) ”.
Welfare Reform and Pensions Act 1999 (c. 30)
In section 47 of the Welfare Reform and Pensions Act 1999 (shareable state scheme rights), in subsection (2)(a), omit “earnings-related”.
Northern Ireland
Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)
The Social Security Contributions and Benefits (Northern Ireland) Act 1992 is amended as follows.
Section 1 (outline of contributory system) is amended as follows.
In subsection (2)—
omit “six”;
in paragraph (d), after “making up entitlement;” insert—.
In subsection (4)(a), for “and 3” substitute “ , 3 and 3A ”.
After section 14 insert—
If paragraph 17 comes into force before the new state pension commencement date for Northern Ireland, section 14A(2) as inserted by that paragraph has effect as if the reference to entitlement included the prospective entitlement of a person who—
has not yet reached pensionable age, but
will reach pensionable age before that day (assuming that the person lives until pensionable age).
In this paragraph “the new state pension commencement date for Northern Ireland” means the date on which legislation in Northern Ireland corresponding to section 2 of this Act comes fully into force.
In section 121 (interpretation), in subsection (1), at the appropriate place insert—.
In section 172 (procedure for regulations etc), in subsection (11A), after “11(3)” insert “ , 14A ”.
In the heading to Schedule 1, for “and 3” substitute “ , 3 and 3A ”.
Social Security Administration (Northern Ireland) Act 1992 (c. 8)
Section 142 of the Social Security Administration (Northern Ireland) Act 1992 (destination of contributions) is amended as follows.
In subsection (5)(e), after “those contributions;” insert—.
In subsection (8)(c), for “or (e)” substitute “ , (e) or (ea) ”.
Bereavement support payment: amendments
Forfeiture Act 1982 (c. 34)
In section 4 of the Forfeiture Act 1982 (Upper Tribunal to decide whether forfeiture rule applies to social security benefits), in the definition of “relevant enactment” in subsection (5), after the entry relating to Part 1 of this Act (inserted by Schedule 12 to this Act) insert— “ section 30 of that Act, ”.
Social Security Contributions and Benefits Act 1992 (c. 4)
The Social Security Contributions and Benefits Act 1992 is amended as follows.
Section 20 (descriptions of contributory benefits) is amended as follows.
In subsection (1), for paragraph (ea) substitute—.
In subsection (2), in the definition of “long-term benefit” omit paragraph (bb).
Section 21 (contribution conditions) is amended as follows.
In the table in subsection (2) omit the entries for bereavement payment and bereavement allowance.
Omit subsection (4).
Section 23A (contributions credits for relevant parents and carers) is amended as follows.
In subsection (1) omit paragraph (e).
In subsection (6)(b) omit “or (e)”.
Section 36 (bereavement payment) is repealed.
Section 37 (widowed mother's allowance) is amended as follows.
Before subsection (1) insert—
At the end of the heading insert “ : deaths before 9 April 2001 ”.
Section 38 (widow's pension) is amended as follows.
Before subsection (1) insert—
At the end of the heading insert “ : deaths before 9 April 2001 ”.
In section 39A (widowed parent's allowance), for subsection (1) substitute—
Section 39B (bereavement allowance where no dependent children) is repealed.
Section 39C (rate of widowed parent's allowance and bereavement allowance) is amended as follows.
Omit subsection (2).
Omit subsection (5).
In the heading omit “and bereavement allowance”.
In section 48B (Category B retirement pension for widows and widowers), in subsection (8), for “the appointed day (as defined by section 36A(3))” substitute “ 9 April 2001 ”.
In section 48BB (Category B retirement pension: entitlement by reference to benefits under section 39A or 39B), in subsection (3)(a)(i), after “bereavement allowance” insert “ under section 39B (before that section was repealed) ”.
Section 60 (complete or partial failure to satisfy contribution condition) is amended as follows.
In subsection (1) omit paragraph (ab).
In subsection (3) omit paragraphs (a) and (bb).
Schedule 3 (contribution conditions for entitlement to benefit) is amended as follows.
Omit paragraph 4 and the italic heading above it.
Omit paragraphs 7 and 9.
In Schedule 4 (rates of benefits etc) omit Part 2.
Social Security Administration Act 1992 (c. 5)
The Social Security Administration Act 1992 is amended as follows.
Section 1 (entitlement to benefit dependent on claim) is amended as follows.
For subsection (2) substitute—
In subsection (4), after paragraph (zb) (inserted by Schedule 12 to this Act) insert—.
In section 2A (claim or full entitlement to certain benefits conditional on work-focused interview), in subsection (2)(d), omit “(other than a bereavement payment)”.
Section 3 (late claims for bereavement benefit where death is difficult to establish) is amended as follows.
Subsection (3) is repealed.
After subsection (4) insert—
In section 71 (overpayments - general), in subsection (11), after paragraph (ad) insert—.
In section 121DA (interpretation of Part 6), in subsection (1), after paragraph (hl) (inserted by Schedule 12 to this Act) insert—.
In section 124 (age, death and marriage), in subsection (1), after paragraph (af) (inserted by Schedule 12 to this Act) insert—.
In section 150 (annual up-rating of benefits), in subsection (1), after paragraph (p) (inserted by Schedule 12 to this Act) insert—
Section 163 (general financial arrangements) is amended as follows.
In subsection (1), after paragraph (za) (inserted by Schedule 12 to this Act) insert—.
In section 170 (Social Security Advisory Committee), in subsection (5)—
in the definition of “the relevant enactments”, after paragraph (am) (inserted by Schedule 12 to this Act) insert—;
in the definition of “the relevant Northern Ireland enactments”, after paragraph (am) (inserted by Schedule 12 to this Act) insert—.
Section 179 (reciprocal agreements) is amended as follows.
In subsection (3)(a), after “Pensions Act 2014” (inserted by Schedule 12 to this Act) insert “ , Part 5 of that Act ”.
In subsection (4), after paragraph (ai) (inserted by Schedule 12 to this Act) insert—.
In subsection (5)—
after paragraph (ad) (inserted by Schedule 12 to this Act) insert—.
In section 187 (inalienability), in subsection (1), after paragraph (ad) insert—.
In section 191 (interpretation), in the definition of “benefit”, for “and personal independence payment” substitute “ , personal independence payment and bereavement support payment under section 30 of the Pensions Act 2014 ”.
Social Security Act 1993 (c. 3)
Social Security Act 1998 (c. 14)
The Social Security Act 1998 is amended as follows.
Section 8 (decisions by Secretary of State) is amended as follows.
In subsection (3), after paragraph (ab) (inserted by Schedule 12 to this Act) insert—.
In section 27 (restriction on entitlement in cases of error), in subsection (7), in the definition of “benefit”—
after paragraph (df) insert—;
in paragraph (e), for “to (df)” substitute “ to (dg) ”.
Social Security Fraud Act 2001 (c. 11)
The Social Security Fraud Act 2001 is amended as follows.
In section 6A (definitions), in subsection (1), in the definition of “disqualifying benefit”, after paragraph (ca) insert—.
Income Tax (Earnings and Pensions) Act 2003 (c. 1)
The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.
In section 660 (taxable benefits: UK benefits - Table A), in the table in subsection (1), in the entry relating to bereavement allowance, omit the words “SSCBA 1992 Section 39B” (in the second column).
In section 677 (UK social security benefits wholly exempt from tax), in Part 1 of Table B in subsection (1), in the entry relating to bereavement payments, omit the words “SSCBA 1992 Section 36” (in the second column).
Automatic transfer of pension benefits etc
Automatic transfer of pension benefits
Regulations providing for transfer of cash equivalent of transferable benefits
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Automatic transfer scheme to find out whether members have transferable benefits
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Automatic transfer scheme to request transfer of cash equivalent
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Right to opt out of automatic transfer
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Information to be given to qualifying members of automatic transfer schemes
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Transferable benefits scheme to comply with request
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Automatic transfer scheme to use cash equivalent to provide rights under the scheme
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Cash equivalents: calculation and verification
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Disclosure of information and establishment of database
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Compliance
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Record keeping
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Further provision about the regulations
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Review of limit on value of cash equivalent
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Merger of pension accounts
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Interpretation etc
Interpretation etc
In this Schedule—“active member”—in relation to an occupational pension scheme, has the meaning given by section 124(1) of the Pensions Act 1995, and in relation to a personal pension scheme, means a member of the scheme in respect of whom contributions are being paid into the scheme;“automatic transfer scheme” has the meaning given by paragraph 1(2);“managers”, in relation to a pension scheme (other than a scheme established under a trust), means the persons responsible for the management of the scheme;“money purchase benefits” has the meaning given by section 181(1) of the Pension Schemes Act 1993;“money purchase scheme” has the meaning given by section 181(1) of the Pension Schemes Act 1993;“occupational pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993;“pension scheme” means—an occupational pension scheme, or a personal pension scheme;“personal pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993;“prescribed” means prescribed by regulations made by the Secretary of State;“qualifying member” has the meaning given by paragraph 1(3);“the Regulator” means the Pensions Regulator;“transferable benefits”, and references to a person having transferable benefits, are to be read in accordance with paragraph 1(4);“transferable benefits scheme” has the meaning given by paragraph 1(5);“transfer notice” means a notice given under regulations made because of paragraph 3;“work-based pension scheme” means—an occupational pension scheme, a personal pension scheme where direct payment arrangements (within the meaning of section 111A of the Pension Schemes Act 1993) exist in respect of one or more members of the scheme who are workers, or a personal pension scheme which is or has been registered under section 2 of the Welfare Reform and Pensions Act 1999 (stakeholder pension schemes);“worker” means a person—who is a worker for the purposes of Part 1 of the Pensions Act 2008, or to whom a provision of Part 1 of that Act applies as if the person were a worker because of a provision of Chapter 8 of that Part; but for the purposes of paragraph (b), ignore section 92 of that Act.
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Crown application
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Overriding provision
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Other provision relating to regulations under this Schedule
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Amendments
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Power to restrict charges or impose requirements in relation to schemes
Power to restrict charges
The Secretary of State may by regulations make provision—“Specified” means specified in the regulations.
prohibiting administration charges which are of a specified class or description, or which exceed specified limits, from being imposed on members of a relevant scheme;
prohibiting a relevant scheme from containing provision under which administration charges which are of a specified class or description, or which exceed specified limits, will or may be imposed on members of the scheme.
The regulations—
may make provision for the manner of, and criteria for, determining whether an administration charge is of a specified class or description or exceeds specified limits;
may provide for the determination to be made in accordance with guidance issued from time to time by the Secretary of State.
The regulations may impose duties on the trustees or managers of a relevant scheme or others.
The regulations may provide that a scheme is not a qualifying scheme in relation to a jobholder for the purposes of Part 1 of the Pensions Act 2008 if a provision of the regulations—
is contravened, or
is contravened in a way specified in the regulations.
In this paragraph—“administration charge”, in relation to a member of a pension scheme, means any of the following to the extent that they may be used to meet the administrative expenses of the scheme, to pay commission or in any other way that does not constitute the provision of pension benefits for or in respect of members or the making of transfer payments with a view to acquiring rights or entitlements to pension benefits under different pension schemes—any payments made to the scheme by, or on behalf or in respect of, the member, any income or capital gain arising from the investment of such payments, or the value of the member's rights under the scheme;“relevant scheme” means a pension scheme of a description specified in the regulations.
Power to impose requirements relating to administration or governance
The Secretary of State may by regulations impose requirements relating to the administration or governance of a relevant scheme that must be satisfied in relation to the scheme.
The regulations—
may make provision for the manner of, and criteria for, determining whether a requirement is satisfied;
may provide for the determination to be made in accordance with guidance issued from time to time by the Secretary of State.
The regulations may impose duties on the trustees or managers of a relevant scheme or others.
The regulations may provide that a scheme is not a qualifying scheme in relation to a jobholder for the purposes of Part 1 of the Pensions Act 2008 if a provision of the regulations—
is contravened, or
is contravened in a way specified in the regulations.
In this paragraph “relevant scheme” means a pension scheme of a description specified in the regulations.
Compliance
The Secretary of State may by regulations make provision with a view to ensuring compliance with a provision of regulations under paragraph 1 or 2.
The regulations may in particular—
provide for the Regulator to issue a notice (a “compliance notice”) to a person with a view to ensuring the person's compliance with a provision of regulations under paragraph 1 or 2;
provide for the Regulator to issue a notice (a “third party compliance notice”) to a person with a view to ensuring another person's compliance with a provision of regulations under paragraph 1 or 2;
provide for the Regulator to issue a notice (a “penalty notice”) imposing a penalty on a person where the Regulator is of the opinion that the person has failed to comply with a compliance notice or third party compliance notice or has contravened a provision of regulations under paragraph 1 or 2;
provide for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty;
confer other functions on the Regulator.
The regulations may make provision for determining the amount, or the maximum amount, of a penalty in respect of a failure or contravention.
But the amount of a penalty imposed under the regulations in respect of a failure or contravention must not exceed—
£5,000, in the case of an individual, and
£50,000, in any other case.
Interpretation
The definitions in paragraph 15(1) of Schedule 17 apply for the purposes of this Schedule.
In this Schedule “relevant scheme” is to be construed in accordance with paragraphs 1(5) and 2(5).
Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 1 of the Pension Schemes Act 2021 (see section 1(2)(b) of that Act) is to be treated for the purposes of this Schedule as a separate scheme.
Crown application
This Schedule applies to a pension scheme managed by or on behalf of the Crown as it applies to other pension schemes.
Accordingly, a reference in this Schedule to a person in the person's capacity as a trustee or manager of a pension scheme include the Crown, or a person acting on behalf of the Crown, in that capacity.
This Schedule applies to persons employed by or under the Crown as it applies to persons employed by a private person.
Overriding provision
The Secretary of State may by regulations provide that specified provisions override any provision of a relevant scheme to the extent that it conflicts with them.
The Secretary of State may by regulations provide that specified provisions override any term of a relevant contract to the extent that it conflicts with them.
A “specified provision” is a provision of regulations under this Schedule specified in regulations made under sub-paragraph (1) or (1A) .
“Relevant contract” means a contract between the trustees or managers of a relevant scheme and a person providing services in relation to the scheme.
Other provision relating to regulations under this Schedule
The Secretary of State may by regulations amend or otherwise modify any enactment (whenever passed or made) in connection with any provision made by regulations under the preceding provisions of this Schedule.
In this paragraph “enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978.
Before making any regulations under this Schedule, the Secretary of State must consult such persons as the Secretary of State considers appropriate.
Amendments
The Pension Schemes Act 1993 is amended as follows.
In section 94(2A) (right to cash equivalent)—
in paragraph (a), after sub-paragraph (viii) (inserted by Schedule 17 to this Act) insert—;
in paragraph (b), after sub-paragraph (vi) (inserted by Schedule 17 to this Act) insert—
In section 101AI(8) (rights to cash transfer sum and contribution refund: further provisions)—
in paragraph (a), after sub-paragraph (viii) (inserted by Schedule 17 to this Act) insert—;
in paragraph (b), after sub-paragraph (vi) (inserted by Schedule 17 to this Act) insert—
Section 16 of the Pensions Act 2008 (automatic enrolment: qualifying schemes) is amended as follows.
In subsection (3), omit paragraphs (a), (aa) and (ab).
After subsection (3) insert—
Omit subsections (4) and (5).
In consequence of the amendments made by paragraph 11, section 10 of the Pensions Act 2011 (qualifying schemes: administration charges) is repealed.
Prohibition orders: consequential amendments
Pensions Act 1995 (c. 26)
The Pensions Act 1995 is amended as follows.
In section 6 (removal or suspension of trustees: consequences)—
in subsections (1) and (3), after “section 3” insert “ or 3A ”;
in subsection (4), after “section 3” insert “ , 3A ”.
In section 9 (removal and appointment of trustees: property), after “a trustee” insert “ or a trustee is removed under section 3A ”.
Pensions Act 2004 (c. 35)
The Pensions Act 2004 is amended as follows.
In section 10 (functions exercisable by the Determinations Panel), in subsection (6), after paragraph (e) insert—.
In section 66 (register of prohibited trustees), in subsection (1), for the words from “of all” to the end substitute “(“the prohibition register”) of—
In section 96 (Pensions Regulator's regulatory functions: standard procedure), in subsection (6), after paragraph (i) insert—.
In section 97 (Pensions Regulator's regulatory functions: special procedure), in subsection (5), after paragraph (j) insert—.
Schedule 2 (Pensions Regulator's reserved regulatory functions) is amended as follows.
After paragraph 5 insert—
In paragraph 9(a), after “orders)” insert “ or by section 3A ”.
Pension Protection Fund: increased compensation cap for long service
The new compensation cap
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Consequential amendments
The Pensions Act 2004 is amended as follows.
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Schedule 7 is amended as follows.
In paragraph 24(2), at the end insert “ of the periodic compensation at that time ”.
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Effect of change in transitional cases
Recalculation of periodic compensation going forwards
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New cap does not generally affect old payments
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Survivors' compensation
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Cases involving early payment or postponement of compensation
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Recalculation of terminal illness lump sums given in the past year
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Meaning of “the pension compensation provisions” in Part 2 of the Pensions Act 2004
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Schemes undergoing assessment or winding up on the commencement date
Schemes undergoing assessment on the commencement date
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Schemes that begin winding up before the commencement date
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Meaning of “undergoing assessment”
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Meaning of “eligible scheme”
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Interpretation and power to make further transitional provision
Interpretation
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Further transitional provision
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