Social Security Act 1973

Establishment of the scheme under the Reserve Pension Board

73 The Reserve Pension Board.

(1) There shall be a body corporate known as "the Reserve Pension Board ", with responsibility for administering the reserve pension scheme established by this Part of this Act.

(2) The Board shall have such other functions as are conferred on them by or under this Act, and in particular they shall be responsible for advising the Secretary of State from time to time on such matters relating to the reserve pension scheme as he may refer to them for their opinion.

(3) The Board shall make such arrangements with the Secretary of State and the Northern Ireland Ministry as appear expedient for associating the administration of the reserve pension scheme with that of—

(a) the basic scheme as it operates in Great Britain and Northern Ireland respectively ; and

(b) the Industrial Injuries Acts and the corresponding Northern Ireland legislation,

and for the exchange of information in that behalf.

(4) The Board shall consist of a chairman, a deputy chairman and not less than 6 nor more than 12 other members all appointed by the Secretary of State; and of the members other than the chairman and deputy chairman one shall be appointed after consultation with organisations representative of employers, and one shall be appointed after consultation with organisations representative of employed earners (being in either case such organisations as the Secretary of State thinks it appropriate to consult).

(5) In Part II of Schedule 1 to the [1957 c. 20.] House of Commons Disqualification Act 1957 (bodies of which all members are disqualified) there shall be inserted at the appropriate place in alphabetical order—

• “The Reserve Pension Board”;

and the same words shall also be inserted at the appropriate place in alphabetical order in the Part substituted for Part II by Schedule 3 to that Act in relation to the Senate and House of Commons of Northern Ireland.

(6) Part I of Schedule 18 to this Act shall have effect with respect to the Board and their affairs.

74 The Reserve Pension Fund.

(1) There shall be established under the control and management of the Reserve Pension Board a fund to be known as " the Reserve Pension Fund ".

(2) There shall be paid into the Reserve Pension Fund—

(a) by the Secretary of State and the Northern Ireland Ministry respectively all contributions and premiums paid to them under this Part of this Act, after deduction of the relevant administrative expenses; and

(b) by the Board, all money received by them, whether in the nature of income or capital (including any money which they borrow).

(3) The reference in subsection (2)(a) above to the relevant administrative expenses—

(a) as regards the Secretary of State, is to such sums as he may estimate to be the expenses falling on him or any other government department in Great Britain, in collecting reserve scheme contributions and premiums and paying them into the Reserve Pension Fund ; and

(b) as regards the Northern Ireland Ministry, is to such sums as that Ministry may estimate to be the expenses so falling on it or any other department of the Government of Northern Ireland;

and any estimate for the purposes of paragraph (a) or (b) above shall be arrived at in accordance with any directions of the Treasury or, in Northern Ireland, the Ministry of Finance.

(4) There shall be paid out of the Reserve Pension Fund—

(a) the reserve scheme pensions provided for by sections 80 and 81 of this Act;

(b) any expenditure of the Reserve Pension Board in the exercise of their functions (including expenditure on administration and the repayment of money borrowed by the Board and the payment of any interest on money so borrowed); and

(c) any sums which are payable by the Board to the Secretary of State or the Northern Ireland Ministry in respect of administrative services provided in pursuance of arrangements made for the purposes of section 73(3) of this Act.

(5) There shall be paid out of the Reserve Pension Fund—

(a) into the Consolidated Fund, sums representing expenses falling on any government department in Great Britain and attributable to this Part of this Act, being expenses in respect of the functions—

(i) under section 75(6) of this Act, of the Government Actuary, and

(ii) under section 85 of this Act (as it applies to Great Britain) of the Secretary of State, insurance officers, local tribunals and National Insurance Commissioners;

(b) into the Exchequer of Northern Ireland, sums representing expenses falling on any department of the Government of Northern Ireland and so attributable, being expenses in respect of functions under section 85 of this Act (as it applies to Northern Ireland) of the Northern Ireland Ministry, insurance officers, local tribunals and National Insurance Commissioners;

and payments under this subsection shall be made at such times and in such manner, and the amount of any expenses referred to in paragraph (a) or paragraph (b) shall be estimated in such manner, as the Treasury or, in Northern Ireland, the Ministry of Finance may direct.

(6) The Secretary of State and the Northern Ireland Ministry respectively shall in respect of each financial year prepare accounts showing—

(a) the sums received by them in that year and paid into the Reserve Pension Fund as contributions and premiums under this Part of this Act;

(b) any sums paid by them in that year on behalf of the Reserve Pension Board as reserve scheme pensions (in pursuance of arrangements made for the purposes of section 73(3) of this Act);

(c) the relevant administrative expenses for the purposes of subsection (2)(a) above ; and

(d) any receipts by them under subsection (4)(c);

and these accounts shall be prepared in such form, and in such manner and at such times, as the Treasury or, in Northern Ireland, the Ministry of Finance, may direct; and the Comptroller and Auditor General shall examine the Secretary of State's accounts and lay copies thereof, together with his report thereon, before Parliament; and the Comptroller and Auditor General for Northern Ireland shall examine the accounts of the Northern Ireland Ministry and lay copies thereof, together with his report thereon, before the Parliament of Northern Ireland.

(7) Where payments fall to be made by way of adjustment—

(a) out of the Reserve Pension Fund either to the Secretary of State or another government department in Great Britain, or into the National Insurance Fund or the Consolidated Fund; or

(b) into the Reserve Pension Fund out of the National Insurance Fund or out of money provided by Parliament,

then in such cases or classes of case as may be specified by the Secretary of State by order made with the consent of the Treasury, the amount of the payments to be made shall be taken to be such, and payments on account thereof shall be made at such times and in such manner, as may be determined by the Secretary of State in accordance with any directions given by the Treasury.

(8) Where payments fall to be made by way of adjustment—

(a) out of the Reserve Pension Fund, to a department of the Government of Northern Ireland or into the Northern Ireland National Insurance Fund or the Exchequer of Northern Ireland; or

(b) into the Reserve Pension Fund, out of the Northern Ireland National Insurance Fund or out of other public money belonging to Northern Ireland,

then in such cases or classes of case as may be specified by the Northern Ireland Ministry by order made with the consent of the Ministry of Finance the amount of the payments to be made shall be taken to be such, and payments on account thereof shall be made at such times and in such manner, as may be determined by that Ministry in accordance with any directions given by the Ministry of Finance.

(9) Exemption from income tax shall, on a claim being made in that behalf, be allowed—

(a) in respect of income derived from investments or deposits of the Reserve Pension Fund ;

(b) in respect of underwriting commissions if, or to such extent as the Inland Revenue are satisfied, the underwriting commissions are applied for the purposes of the reserve pension scheme and would (but for this paragraph) be chargeable to tax under Case VI of Schedule D;

and for the purposes of capital gains tax a gain shall not be a chargeable gain where it accrues to the Fund on any disposal of its investments.

(10) Subject to subsection (6) above, Part II of Schedule 18 to this Act shall have effect with respect to the accounts of the Fund and their annual audit.

75 Management of the Fund and its investments.

(1) In exercising their functions under this Part of this Act, and in particular in .their management and investment of the Reserve Pension Fund, the Board shall have paramount regard to the interests of existing and future pensioners with pensions paid or to be paid out of die Fund.

(2) The Reserve Pension Fund may be invested by the Board in any manner they think expedient; but—

(a) they shall so exercise their powers that any interest of the Fund in shares comprised in relevant share capital of a company to which this subsection applies is limited to less than 10 per cent, at any one time of the nominal value of that share capital;

(b) if at any time the Fund's interest in any such shares exceeds the limits imposed by paragraph (a) above, it shall be the Board's duty to effect such dispositions as are necessary for the purposes of compliance with that paragraph; and

(c) the duty imposed by paragraph (b) above shall be carried out by the Board without delay, except such delay (if any) as they think necessary to avoid any abnormal fluctuation of the market;

and a company to which this subsection applies is one in the case of which there has, as respects the whole or any proportion of its share capital, been granted a quotation on any recognised stock exchange.

(3) The following shall have effect as to the interpretation of subsection (2) above—

(a) subject to the following paragraphs, the subsection shall be construed as if contained in the [1948 c. 38.] Companies Act 1948 ;

(b) " company " includes a company within the meaning of the [1960 c. 38 (N.I.).] Companies Act (Northern Ireland) 1960;

(c) " recognised stock exchange " includes a stock exchange recognised for the purposes of the [1940 c. 9 (N.I.).] Prevention of Fraud (Investments) Act (Northern Ireland) 1940 ;

(d) section 28 of the [1967 c. 81.] Companies Act 1967 (so far as applicable) shall be applied in construing the reference in paragraph (a) of the subsection to an interest of the Reserve Pension Fund in shares ; and

(e) " relevant share capital", in relation to a company, means issued share capital of a class carrying rights to vote in all circumstances at general meetings of the company.

(4) The Board shall have power to borrow money (whether by way of overdraft or otherwise), against the security of any of their assets or otherwise, or against the security of any assets comprised in the Fund ; but this subsection shall not be taken to exempt the Board from the provisions of any order under section 1 of the [1946 c. 58.] Borrowing (Control and Guarantees) Act 1946 or section 2 of the [1946 c. 18 (N.I.).] Loans Guarantee and Borrowing Regulation Act (Northern Ireland) 1946, or from the provisions of the [1947 c. 14.] Exchange Control Act 1947.

(5) The Secretary of State may, with the approval of the Treasury, lend to the Board any sums which the Board have power to borrow under subsection (4) above up to such amount as he may (with that approval) determine to be necessary to enable the Board to establish and bring into operation the reserve pension scheme; and any loan which the Secretary of State makes in pursuance of this subsection shall be repaid to him at such times by such methods, and interest on the loan shall be paid to him at such rates and at such times, as he may with the approval of the Treasury from time to time determine.

(6) The Government Actuary shall—

(a) as from the end of the period of 3 years beginning with the appointed day or such shorter period beginning with that day as the Board may request; and

(b) thereafter as from the beginning of every third year after that in which he last began such a review, or of such earlier year as the Board may request,

review the financial condition of the Fund as at the end of the year last ended before the beginning of the review and generally review the operation of this Part of this Act in past years and the way in which it may be expected to operate in the future; and after completing his review the Government Actuary shall report his conclusions thereon to the Board (without prejudice to any interim report which he thinks it expedient, or the Board request him, to make.

76 Annual report to Secretary of State.

(1) It shall be the duty of the Reserve Pension Board to make to the Secretary of State, as soon as practicable after the end of each financial year, a report on—

(a) the performance of their functions during that year; and

(b) the operation in that year of the reserve pension scheme.

(2) The Board's report to the Secretary of State in respect of any year shall be accompanied by a copy of their statement of the accounts of the Reserve Pension Fund for that year, of the auditors' report on the accounts and of any report which has been made to the Board by the Government Actuary under section 75(6) of this Act and which the Board have not previously submitted to the Secretary of State.

(3) The report shall include a statement as to the current investments of the Reserve Pension Fund as at the end of the year in question; and the statement, so far as relating to the Fund's current investments, shall—

(a) be in such form, and contain such particulars, as may be prescribed; and

(b) describe the Fund's investments in such manner, and in such categories or divisions and sub-divisions of categories, as regulations made for the purposes of this subsection may require;

but the making of regulations for the purposes of this section shall not be taken as preventing the Board from including in their statement any such particulars as they think should be contained in it.

(4) The Secretary of State shall lay before each House of Parliament a copy of the Board's annual report under this section, together with copies—

(a) of the Board's statement of the accounts of the Reserve Pension Fund for the year in question ;

(b) of the auditors' report on the accounts ; and

(c) of any report which has been made to the Board by the Government Actuary under section 75(6) of this Act and has not previously been laid before Parliament.