§ MONEY PURCHASE OCCUPATIONAL PENSION SCHEMES
Amendment made: No. 20, in page 85, leave out lines 34 and 35 and insert
'an occupational pension scheme which, in relation to the earner's employment, is a money purchase contracted-out scheme, then, for the purposes of this section'.
No. 21, in page 86, line 17, leave out from `to' to 'scheme' in line 19 and insert
'a money purchase contracted-out'.
§ No. 22, in page 87, line 30, leave out paragraph 5.
No. 23, in page 88, line 2, leave out from 'schems)' to end of line 11 and insert—
- '(a) in subsection (2), the words "or it satisfies subsection (2A) below." shall be inserted after paragraph (b) (but not as part of it);
- (b) the following subsections shall be inserted after that subsection—
§ "(2A) An occupational pension scheme satisfies that subsection only if—
- (a) the requirements imposed by or by virtue of Schedule 1 to the Social Security Act 1986, modified under subsection (2B) below, are satisfied in its case;
- (aa) it complies with section 40(1) below; and'.
No. 24, in line 25 leave out 'and' and insert—
`(aa) that for the references in paragraph 5A to all minimum contributions there shall be substituted references to all minimum payments (within the meaning of the Social Security Pensions Act 1975) and any payments by the Secretary of State under section 7 of this Act.'.
§ No. 25, in line 33 leave out from 'the' to 'which' in line 34 and insert 'member and any rights of the member to money purchase benefits'.
No. 26, line 43, at end insert—
'(2C) A contracting-out certificate shall state whether the scheme is contracted-out by virtue of subsection (2) or subsection (2A) above; and where a scheme satisfies both of those subsections the trustees or managers, in their application for a certificate, shall specify one of the subsections as the subsection by virtue of which they desire the scheme to be contracted-out.
(2D) A scheme which has been contracted-out by virtue of one of those subsections may not become contracted-out by reason of the other, except in prescribed circumstances.'.
No. 27, line 43, at end insert—
'6A.—(1) The words "which is not a money purchase contracted-out scheme" shall be inserted after the words "occupational pension scheme" in—
(2) If section 9 above comes into force after this paragraph, the amendment to section 36(1) made by sub-paragraph (1) above shall be made in the subsection both as amended by section 9 above and as unamended.
(3) The words "or a money purchase contracted-out scheme" shall be inserted after the words "public service pension scheme" in—
No. 28, line 45 leave out from 'a' to end of line 46 and insert
'scheme which is or has been a money purchase contracted-out scheme'.
§ No. 29, in page 89, line 20 after 'under', insert 'section 52C of or'.
§ No. 30, in line 32 leave out 'Subject to subsection (8) below,'.
No. 31, in line 37 leave out from beginning to end of line 6 on page 90.
No. 32, in page 90, line 32 after 'premium', insert 'together with, if the person in respect of whom it falls to be paid gives notice to the prescribed person within the prescribed period—
No. 33, in line 47 at end insert—
'(14A) The power to make regulations conferred by subsections (7) and (11) above includes power to provide that cash equivalents are to he calculated and verified in such manner as may be approved in particular cases—
and power to provide that they shall be calculated and verified in accordance with guidance prepared by a prescribed body.'.
§ No. 34, in page 91 leave out lines 10 to 30.
No. 35, in page 91, line 46 leave out from beginning to end of line 25 on page 92 and insert—
'(a) the following paragraph shall be substituted for subsection (1)(b)—
(b) there has not been a payment—
§ (b) in subsection (2)(a) after the word "above" there shall be inserted the words "or, by virtue of subsections (2A) and (2B) of section 32 above, paragraph 9(1) of Schedule 1 to the Social Security Act 1986"; and
(c) in subsection (5), "32" shall be substituted for "33".
10. At the end of subsection (3) of section 50 (alteration of rules of contracted-out schemes) there shall be added the words "or any person has protected rights under it or is entitled to any benefit giving effect to protected rights under it".'.—[Mr. Major]
§ Mr. Major
I beg to move amendment No. 36, in page 92, line 26, at end insert—'() the following definition shall be inserted after the definition of "accrued rights"—"'average salary benefits' means benefits the rate or amount of which is calculated by reference to a member's average salary over the period of service on which the benefits are based;";'.
§ Mr. Deputy Speaker
With this it will be convenient to take Government amendments Nos. 37, 94, 96 and 104.
§ Mr. Major
The effect of amendment No. 36 and the related amendments is to alter the definition of "money purchase benefits" in all the places where it appears in the Bill and in the Pensions Act 1975 so as to ensure that it does not include "average salary benefit".
A few schemes provide what are known as "unrevalued average salary benefits", where members pay a percentage of their earnings as a contribution, and the benefits are then calculated as a straightforward multiple of those contributions. These are not "money purchase benefits" in 94 the sense we intend in the new pension arrangements provided by this Bill, because they are fixed in value and there is no element of investment return. In effect they are salary-related benefits.
These amendments make sure that they are excluded from the definition of "money pruchase benefits", so that—for example—they are not satisfactory benefits for the purpose of money purchase contracting-out, and minumum contributions cannot be channelled into this kind of benefit.
§ Amendment agreed to.
Amendments made: No. 37, in page 92, line 35, at end insert
'other than average salary benefits;'.
No. 38, in line 36 leave out from 'purchase' to end of line 38 and insert
'"contracted-out scheme" means an occupational pension scheme which is contracted-out by virtue of satisfying section 32(2A) above'.—[Mr. Major.]