§ '(1) If an occupational pension scheme has its main administration in the United Kingdom, the trustees or managers of the scheme must secure that the activities of the scheme are limited to retirement-benefit activities.
§ (2) Subsection (1) does not apply to a scheme if it is a prescribed scheme or a scheme of a prescribed description.
- (a) the scheme has activities that are not retirement-benefit activities, and
- (b) the trustee or manager has failed to take all reasonable steps to secure that the activities of the scheme are limited to ret rement-benefit activities.
§ (4) In this section "retirement-benefit activities" means—
- (a) operations related to retirement benefits, and
- (b) activities arising from operations related to retirement benefits.
§ (5) In subsection (4) "retirement benefits" means—
- (a) benefits paid by reference to reaching, or expecting to reach, retirement, and
- (b) benefits that are supplementary to benefits within paragraph (a) and that are provided on an ancillary basis—
- (i) in the form of payments on death, disability or termination of employment, or
- (ii) in the form of support payments or services in the case of sickness, poverty or need, or death.'.-[Mr. Pond.]
§ Brought up, and read the First time.
§ Mr. Pond
I need not detain the House too long on new clause 29, which is closely related to new clauses 25, 26, 27 and 28, which we have just discussed. It assists in the UK's transposition of European directive 2003/41/ EC. This clause will implement article 7 of the directive.
867 The article requires the UK to limit occupational pension schemes to carrying out activities that relate either to retirement benefits, or activities that arise from that activity.
Currently, pension schemes are restricted from carrying out activities that are unrelated to pensions through requirements that arise as part of the Inland Revenue's tax approval process. Through this new clause, we largely achieve the same result. It is, however, necessary for the purposes of transposing the directive to place this requirement in pensions legislation separately from the tax approval process.
Amendment No. 215 is a consequential amendment linked to new clauses 25 to 29. It will amend clause 62 of the Bill, to ensure that the pensions regulator can inspect premises to investigate a potential breach of this clause.
§ Mr. George Osborne
Like the other new clauses we have discussed, new clause 29 appears to be consequential on the proposals in the Finance Bill. Subsection (2) provides an exemption fora prescribed scheme or a scheme of a prescribed description.I wonder whether the Minister could tell us what sort of schemes are prescribed and do not offer "retirement-benefit activities", and why subsection (2) has been included. As, presumably, we are introducing the new clause so that we comply with European legislation, would not a prescribed scheme that did not offer retirement-benefit activities be illegal under European law? In that case, what is the point of subsection (2)?