Social Security Pensions Act 1975

Other provisions U.K.

57 Disclosure of information by Occupational Pensions Board. U.K.

The Occupational Pensions Board may inform any person claiming to be entitled to a pension under an occupational pension scheme of the name and address of any person appearing to the Board to be responsible for paying that pension notwithstanding that information with respect to that matter has come into the Board’s possession by virtue of section 89 of the M1 Social Security Act 1973 (disclosure to Board of information obtained by Commissioners of Inland Revenue).

Modifications etc. (not altering text)

C1 S. 57 has effect (27.7.1987) in relation to personal pension schemes as if the reference in it to an occupational pension scheme were a reference to a personal pension scheme: S.I. 1987/1116 reg. 3(9)

Marginal Citations

M1 1973 c. 38.

[F1 57A Restrictions on investment of scheme’s resources in employer-related assets. E+W+S

(1) An occupational pension scheme shall comply with such restrictions as may be prescribed with respect to the proportion of its resources that may at any time be invested in, or in any description of, employer-related investments.

(2) In this section—

• “employer-related investments” means—

(a) shares or other securities issued by the employer or by any person who is connected with, or an associate of, the employer;

(b) land which is occupied or used by, or subject to a lease in favour of, the employer or any such person;

(c) property (other than land) which is used for the purposes of any business carried on by the employer or any such person;

(d) loans to the employer or any such person;

• “the employer” means the employer of persons in the description or category of employment to which the scheme in question relates;

• “securities” means any asset, right or interest falling within paragraph 1, 2, 4 or 5 of Schedule 1 to the Financial Services Act 1986.

(3) If and to the extent that any sums due and payable by a person to the trustees or managers of a scheme remain unpaid, those sums shall be regarded for the purposes of this section as loans made to that person by the trustees or managers, and resources of the scheme shall be regarded as invested accordingly.

(4) Sections 249 and 435 of the Insolvency Act 1986 (connected and associated persons) shall apply for the purposes of this section as they apply for the purposes of that Act; and section 74 of the Bankruptcy (Scotland) Act 1985 shall apply for the purposes of this section as that section applies for the purposes of the said Act of 1985.]

Textual Amendments

F1 S. 57A inserted (with effect from 3.12.1990) by Social Security Act 1990 (c. 27), Sch. 4, para. 3

[F2 57B Grants by the Board to advisory bodies etc. E+W+S

(1) The Occupational Pensions Board may make grants on such terms and conditions as they think fit to any person or body of persons providing advice or assistance, or carrying out other prescribed functions, in connection with occupational or personal pensions.

(2) The Secretary of State may pay to the Occupational Pensions Board such sums as he may think fit towards any expenditure of theirs in making grants under this section.]

Textual Amendments

F2 S. 57B inserted (with effect from 1.10.1990) by Social Security Act 1990 (c. 27), Sch. 4, para. 11

[F3 57C Requirement for independent trustee where employer becomes insolvent etc. E+W+S

(1) This section applies in relation to an occupational pension scheme which is constituted by trust deed—

(a) if a person (“the practitioner”) commences to act as an insolvency practitioner in relation to a company which, or an individual who, is the employer of persons in the description or category of employment to which the scheme relates; or

(b) if the official receiver becomes—

(i) the liquidator or provisional liquidator of a company which is the employer of any such persons, or

(ii) the receiver and the manager, or the trustee, of the estate of a bankrupt who is the employer of any such persons.

(2) If and so long as this section applies to a scheme, it shall be the duty of the practitioner or official receiver—

(a) to satisfy himself that at all times at least one of the trustees of the scheme is an independent person; and

(b) if at any time he is not so satisfied, to appoint under this paragraph, or to secure the appointment of, an independent person as a trustee of the scheme;

but this subsection is subject to subsection (5) below.

(3) For the purposes of subsection (2) above a person is “independent” only if—

(a) he has no interest in the assets of the employer or of the scheme, otherwise than as trustee of the scheme;

(b) he is neither connected with, nor an associate of—

(i) the employer;

(ii) any person for the time being acting as an insolvency practitioner in relation to the employer; or

(iii) the official receiver, acting in any of the capacities mentioned in subsection (1)(b) above in relation to the employer; and

(c) he satisfies such other requirements as may be prescribed;

and any reference in this section or section 57D below to an “independent trustee” shall be construed accordingly.

(4) Sections 249 and 435 of the Insolvency Act 1986 (connected and associated persons) shall apply for the purposes of paragraph (b) of subsection (3) above as they apply for the purposes of that Act; and section 74 of the Bankruptcy (Scotland) Act 1985 (associated persons) shall apply for the purposes of that paragraph as that section applies for the purposes of the said Act of 1985.

(5) Where, apart from this subsection, the duties imposed by subsection (2) above in relation to a scheme would fall to be discharged at the same time by two or more persons acting in different capacities, those duties shall be discharged—

(a) if the employer is a company, by the person or persons acting as the company’s liquidator, provisional liquidator or administrator; or

(b) if the employer is an individual by the person or persons acting as his trustee in bankruptcy or interim receiver of his property or as permanent or interim trustee in the sequestration of his estate.

(6) if the practitioner or official receiver neglects or refuses to discharge any duty imposed upon him by subsection (2) above in relation to a scheme, any member of the scheme may apply to the appropriate court for an order requiring him to discharge his duties under that subsection.

(7) Where this section applies in relation to a scheme, it shall cease to do so—

(a) if some person other than the employer mentioned in subsection (1) above becomes the employer of persons in the description or category of employment to which the scheme relates; or

(b) if at any time neither the practitioner nor the official receiver is acting in relation to the employer;

but nothing in this subsection affects the application of this section in relation to the scheme on any subsequent occasion when the conditions specified in subsection (1)(a) or (b) above are satisfied in relation to the scheme.

(8) In this section:—

• “acting as an insolvency practitioner” and “official receiver” shall be construed in accordance with sections 388 and 399 of the Insolvency Act 1986;

• “the appropriate court”, in relation to an application for an order under subsection (6) above, means—

(a) if the employer in question is a company—

(i) where a winding up order has been made or a provisional liquidator appointed, the court which made the order or appointed the liquidator;

(ii) in any other case, any court having jurisdiction to wind up the company; and

(b) in any other case—

(i) in England and Wales, the court as defined in section 385 of the Insolvency Act 1986; or

(ii) in Scotland, where sequestration has been awarded or, by virtue of the proviso to section 13(1) of the Bankruptcy (Scotland) Act 1985 (petition presented by creditor or trustee acting under trust deed) an interim trustee appointed, the court which made the award or appointment and, if no such award or appointment has been made, any court having jurisdiction under section 9 of that Act;

• “bankrupt” has the meaning given by section 381 of the Insolvency Act 1986;

• “company” means a company within the meaning given by section 735(1) of the Companies Act 1985 or a company which may be wound up under Part V of the Insolvency Act 1986 (unregistered companies);

• “interim trustee” and “permanent trustee” have the same meaning as they have in the Bankruptcy (Scotland) Act 1985.

(9) References in this section to an individual include, except where the context otherwise requires, references to a partnership and to any debtor within the meaning of the Bankruptcy (Scotland) Act 1985.]

Textual Amendments

F3 Ss. 57C and 57D inserted (with effect from 12.11.1990) by Social Security Act 1990 (c. 27), Sch. 4, para. 1, (but with effect from 22.10.1990 for the purpose of making regulations). These sections are subject to modification and disapplication in specified circumstances, and their insertion is subject to a saving for specified processes started before 12.11.1990, under S.I. 1990/2075.

57D Independent trustees: further provisions. E+W+S

(1) If and so long as section 57C above applies in relation to a scheme, no independent trustee of the scheme shall be removed from being a trustee by virtue only of any provision of the scheme.

(2) If a trustee appointed under subsection (2)(b) of that section ceases to be an independent trustee, then—

(a) he shall forthwith give written notice of that fact to the practitioner or official receiver by whom the duties under that provision fall to be discharged; and

(b) he shall cease to be a trustee of the scheme, unless the circumstances are such that upon his cessation there would be no other trustee of the scheme, in which case he shall not cease by virtue of this subsection to be a trustee until such time as another trustee is appointed.

(3) A trustee appointed under subsection (2)(b) of that section shall be entitled to be paid out of the scheme’s resources his reasonable fees for acting in that capacity and any expenses reasonably incurred by him in doing so, and to be so paid in priority to all other claims falling to be met out of the scheme’s resources.

(4) If, immediately before the appointment of an independent trustee under subsection (2)(b) of that section, there is no trustee of the scheme other than the employer, the employer shall cease to be a trustee upon the appointment of the independent trustee.

(5) If and so long as section 57C above applies in relation to a scheme—

(a) any power vested in the trustees or managers of the scheme and exercisable at their discretion shall be exercisable only by the independent trustee; and

(b) any power—

(i) which the scheme confers on the employer (otherwise than as trustee or manager of the scheme), and

(ii) which is exercisable by him at his discretion but only as trustee of the power,

shall be exercisable only by the independent trustee;

but if, in either case, there is more than one independent trustee, the power shall also be exercisable with the consent of at least half of those trustees by any person who could exercise it apart from this subsection.

(6) Notwithstanding anything in section 155 of the Insolvency Act 1986 (court orders for inspection etc), if and so long as section 57C above applies in relation to a scheme, it shall be the duty of the practitioner or official receiver to provide the trustees of the scheme, as soon as practicable after the receipt of a request, with any information which the trustees may reasonably require for the purposes of the scheme.

(7) Any expenses incurred by the practitioner or official receiver in complying with a request under subsection (6) above shall be recoverable by him as part of the expenses incurred by him in the discharge of his duties; and he shall not be required under that subsection to take any action which involves expenses that cannot be so recovered, unless the trustees of the scheme undertake to meet them.

(8) The provisions of section 57C above and this section, and of any regulations made under that section or this section, override any provision of a scheme to the extent that it conflicts with them.

(9) The Secretary of State may make regulations modifying section 57C above and this section in their application—

(a) to any occupational pension scheme which applies to earners in employments under different employers;

(b) to any occupational pension scheme of which there are no members who are in pensionable service under the scheme, as defined in paragraph 3 of Schedule 16 to the 1973 Act; or

(c) to any case where a partnership is the employer, or one of the employers, in relation to an occupational pension scheme.

(10) Section 57C above and this section (other than this subsection) shall not apply in relation to an occupational pension scheme of a prescribed description.

58 Priority in bankruptcy etc. E+W+S

Schedule 3 to this Act shall have effect . . . F4 [F5 for the purposes, in respect of the sequestration of estates in Scotland, of Schedule 3 to the Bankruptcy (Scotland) Act 1985 (preferred debts)] for affording priority in cases of insolvency to liabilities in respect of contributions to occupational pension schemes and in respect of state scheme premiums.

Textual Amendments

F4 Words, as applying to company insolvency in Great Britain, and also as applying to bankruptcy in relation to England and Wales only, deleted by Insolvency Act 1986 (c. 45), Sch. 14.

F5 Words inserted, for bankruptcy in Scotland, by Bankruptcy (Scotland) Act 1985 (c. 66), Sch. 7, para. 13.

[F6 58A Annual increase in rate of pension, other than guaranteed minimum pension or money purchase benefit. E+W+S

(1) This section applies in relation to any occupational pension scheme—

(a) which is neither a public service pension scheme nor a money purchase scheme; and

(b) whose rules do notrequire the annualrate of everypension which commences or has commenced under the scheme to be increased each year by at least an amount equal to the appropriate percentage of that rate.

(2) On and after the appointed day, Schedule 3A to this Act shall have effect for the purpose of requiring the provision by schemes to which this section applies of annual increases in the annual rates of pensions under those schemes.

(3) In this section—

• “annual rate”, in relation to a pension, means the annual rate of the pension, as previously increased under the rules of the scheme or under Schedule 3A to this Act;

• “the appointed day” means the day on which this section and Schedule 3A to this Act come into force;

• “the appropriate percentage”, in relation to an increase in the annual rate of a pension, means the percentage specified in the last revaluation order made before the increase is to take effect as the revaluation percentage for the last revaluation period of twelve months;

• “money purchase scheme” means a pension scheme under which all the benefits that may be provided are money purchase benefits;

• “pension” does not include—

  (a)

  a guaranteed minimum pension or any increase in such a pension under section 37A above; or

  (b)

  any money purchase benefit;

• “revaluation order”, “revaluation percentage” and “revaluation period” shall be construed in accordance with section 52A above.]

Textual Amendments

F6 S. 58A inserted (17.8.1990 for certain purposes otherwiseprosp.) by Social Security Act 1990 (c. 27), s. 11(1); S.I. 1990/1446 art. 2

[F7 58B Deficiencies in the assets of a scheme on winding up. E+W+S

(1) If, in the case of an occupational pension scheme which is not a money purchase scheme, the value at the applicable time of the scheme’s liabilities, as determined in accordance with regulations, exceeds the value of its assets, as so determined, then—

(a) an amount equal to the excess shall be treated as a debt due from the employer to the trustees of the scheme; and

(b) if that debt has not been discharged before the default time then, for the purposes of the law relating to winding up, bankruptcy or sequestration as it applies in relation to the employer, it shall be taken to arise at the default time.

(2) In this section—

• “the applicable time” means the earlier of—

(a) any time when the scheme is being wound up which falls before the default time; or

(b) the default time;

• “the default time” means—

(a) in England and Wales—

(i) where the employer is a company, immediately before the company goes into liquidation, within the meaning of section 247(2) of the Insolvency Act 1986; or

(ii) where the employer is an individual, immediately before the conmmencement of his bankruptcy, within the meaning of section 278 of that Act; or

(b) in Scotland—

(i) where the employer is a company, immediately before the commencement of the company’s being wound up, within the meaning of section 129 of that Act; or

(ii) where the employer is a debtor, within the meaning of the Bankruptcy (Scotland) Act 1985, immediately before the date of sequestration as defined in section 12(4) of that Act;

• “the employer” means the employer of persons in the description or category of employment to which the scheme relates;

• “money purchase scheme” has the same meaning as it has in section 58A above.

(3) The power to make regulations conferred by subsection (1) above included power to provide—

(a) that, in calculating the value of the scheme’s liabilities, an provision of the scheme which limits the amount of its liabilities by reference to the amount of its assets is to be disregarded;

(b) that the value of the scheme’s liabilities or assets is to be calculated and verified in such manner as may, in the particular case, approved—

(i) by a prescribed person,

(ii) by a person with prescribed professional qualifications or experience, or

(iii) by a person approved by the Secretary of State, or that their value is to be calculated and verified in accordance with guidance prepared by a prescribed body.

(4) This section is without prejudice to any other right or remedy which the trustees may have in respect of the deficiency.

(5) A debt due by virtue only of this section shall be regarded neither as a preferential debt for the purposes of the Insolvency Act 1986 nor as a preferred debt for the purposes of the Bankruptcy (Scotland) Act 1985.

(6) The Secretary of State may make regulations modifying this section in its application—

(a) to any occupational pension scheme which applies to earners in employments under different employers;

(b) to any case where a partnership is the employer, or one of the employers, in relation to an occupational pension scheme;

(c) to any occupational pension scheme of which there are no members who are in pensionable service under the scheme, as defined in paragraph 3 of Schedule 16 to the 1973 Act; or

(d) to any case where the assets and liabilities of the scheme are transferred to another occupational pension scheme.

(7) The provisions of this section and of any regulations made under it override any provision of a scheme to the extent that it conflicts with this section or those regulations.]

Textual Amendments

F7 S. 58B inserted (with effect from 29.6.1992.) by Social Security Act 1990 (c. 27), Sch. 4, para. 2

Modifications etc. (not altering text)

C2 S. 58B(2) modified, where there are multiple employers or there are no members in pensionable service, by reg. 3(b) or reg. 4 of S.I. 1992/1555 as from 1.7.92. Also for multiple employers, an extra subsection ((1A)) is added to s. 58B by reg. 3(a) or 4(b) of S.I. 1992/1555 as from 1.7.1992.

59 Increase of official pensions. U.K.

(1) Where by virtue of [F8 section 151 of the Administration Act a direction is given that the sums mentioned in section 150(1)(c) of that Act] are to be increased by a specified percentage the Minister for the Civil Service shall by order provide that the annual rate of an official pension may, if a qualifying condition is satisfied or the pension is [F9 a derivative or substituted pension or a relevant injury pension], be increased in respect of any period beginning on or after the date on which the direction takes effect—

(a) if the pension began before the beginning of the base period for that direction, by the same percentage as that specified in the direction;

(b) if the pension began during the base period, by that percentage multiplied byA/B where A is the number of complete months in the period between the beginning of the pension and the end of the base period and B is the number of complete months in the base period.

(2) Where an order is made under this section in consequence of any such direction as aforesaid the order shall, in addition to the provision required by subsection (1) above, authorise the payment of an increase in respect of any lump sum that becomes payable during the base period for that direction, being an increase equal to the percentage specified in the direction multiplied byA/B where—

(a) A is the number of complete months in the period between the beginning date for the lump sum (or, if later, the date from which it was last authorised to be increased by an order under this section) and the date on which it becomes payable; and

(b) B is the number of complete months in that base period.

(3) In the case of the first order made under this section in consequence of any such direction as aforesaid, subsection (1) above shall have effect as if the increase required to be authorised in the case of any pension (whether beginning before or during the base period) were an increase equal to the percentage specified in the direction multiplied byA/Bwhere—

(a) A is the number of complete months in the period between the beginning of the pension (or, if later, the date from which it was last authorised to be increased by an order under section 2 of the M2 Pensions (Increase) Act 1971) and the end of the base period for that direction; and

(b) B is the number of complete months in that base period.

(4) In the case of the first order so made under this section, subsection (2) above shall have effect as if—

(a) for the reference to any lump sum that becomes payable during the base period there were substituted a reference to any lump sum that becomes or has become payable before the end of the base period but after the date from which official pensions were last increased by an order under section 2 of the M3 Pensions (Increase) Act 1971; and

(b) the reference in paragraph (a) of the subsection to the date from which the lump sum was last authorised to be increased were a reference to the date specified in paragraph (a) above.

(5) The increases in the rate of a pension that may be provided for by an order under this section are to be calculated by reference to the basic rate of the pension as authorised to be increased by section 1 of the said Act of 1971 or by any order under section 2 of that Act or this section; but where—

[F10 (a) a person is entitled to a guaranteed minimum pension when an order under this section comes into force; and

(b) entitlement to that guaranteed minimum pension arises from an employment from which (either directly or by virtue of the payment of a transfer credit . . . F11 ) entitlement to the official pension also arises;

the amount by reference] to which any increase authorised by that or any subsequent order is to be calculated shall be reduced by an amount equal to the rate of the guaranteed minimum pension.

[F12 (5ZA) In the application of subsection (5) above in relation to a widow’s or widower’s pension in a case where the pensioner becomes entitled on the death of the deceased spouse to such a guaranteed minimum pension as is there mentioned.

(a) the pensioner shall be treated as having been entitled to that guaranteed minimum pension at all times during the period beginning with the date on which the deceased spouse became entitled to a guaranteed minimum pension and ending with the date of the death;

(b) the rate of the guaranteed minimum pension to which the pensioner is treated as so entitled at any time during that period shall be taken to be one half of the rate of the deceased spouse’s guaranteed minimum pension at that time; and

(c) the amount by reference to which any increase in the widow’s or widower’s pension is to be calculated shall, subject to any directions under section 59A below (whether made before or after the coming into force of this subsection), be accordingly reduced under that subsection by an amount equal to the rate, as determined under paragraph (b) above, of the guaranteed minimum pension to which the pensioner is treated as entitled;

but this subsection does not apply to a widow’s or widower’s pension in respect of any service of the deceased spouse if the deceased spouse became payable before the coming into force of this subsection.]

[F13 (5A) Nothing in section 37A(13), (14) or (15) above authorises any deduction from an increase in the rate of an official pension under this section.]

(6) Any order under this section shall be made by statutory instrument and shall be laid before Parliament after being made.

(7) In this section—

• “base period”, in relation to any such direction as is mentioned in subsection (1) above, means the period ending with the coming into force of that direction and beginning with the coming into force of the last previous such direction or, if there was none, with [F14 13th November 1978 (date of the relevant order under section 124 of the principal Act, increasing rates of benefit);]

• “beginning date”, in relation to a lump sum, shall be construed in accordance with sections 8(2) and 9(2)(a) of the said Act of 1971;

• “lump sum” includes an instalment of a lump sum;

• [F15 “widower’s pension” means a pension payable in respect of the services of the pensioner’s deceased wife]

and this section [F16 and section 59A of this Act] and the said Act of 1971 shall have effect as if this section [F16 and section 59A of this Act] were contained in Part I of that Act.

[F17 (8) Where, for the purposes of this section, it is necessary to calculate the number of complete months in any period an incomplete month shall be treated as a complete month if it consists of at least 16 days.]

Textual Amendments

F8 Words substituted by Social Security (Consequential Provisions) Act 1992 (c. 6), Sch. 2, para. 34

F9 Words substituted by the Pensions (Miscellaneous Provisions) Act 1990 (c. 7), s. 1(7)

F10 Words substituted by Social Security Act 1979 (c. 18), s. 11(1)

F11 Words repealed by Social Security Act 1985 (c. 53), Sch. 5, para. 33 and Sch. 6

F12 S. 59(5ZA) inserted (with effect from 24.7.1990) by Pensions (Miscellaneous Provisions) Act 1990 (c. 7), s. 5(1)

F13 S. 59(5A) inserted (with effect from 6.4.1988) by Social Security Act 1986 (c. 50), s. 9(8)

F14 Words substituted by Social Security Act 1979 (c. 18), s. 11(2)

F15 Definition inserted (with effect from 24.7.1990) by Pensions (Miscellaneous Provisions) Act 1990 (c. 7), s. 5(2)

F16 Words inserted by Social Security Act 1979 (c. 18), Sch. 3 para. 20

F17 S. 59(8) inserted by Social Security Act 1979 (c. 18), s. 11(3)

Marginal Citations

M2 1971 c. 56.

M3 1971 c. 56.

[F18 59A Modification of effect of section 59(5). U.K.

(1) This section applies where the amount by reference to which an increase in an official pension is to be calculated would, but for the provisions of this section, be reduced under section 59(5) of this Act by an amount equal to the rate of a guaranteed minimum pension.

(2) The Minister for the Civil Service may direct that in such cases or classes of case as may be specified in the direction—

(a) no such reduction shall be made; or

(b) the reduction shall be of an amount less than the rate of the guaranteed minimum pension;

and in any case to which such a direction applies the increase shall, in respect of such period or periods as may be specified in the direction, be calculated in accordance with the direction, notwithstanding section 59(5).

[F19 (2A) Where in any tax year—

(a) an increase is calculated in accordance with a direction under this section; and

(b) the amount by reference to which the increase is calculated, or any part of it, is increased in that tax year under section 37A above,

the increase calculated in accordance with the direction shall be reduced by the amount of the increase under section 37A above.]

(3) A direction under this section may provide that where it has applied in any case and ceases to apply in that case, the rate of the official pension for any period following the date on which the direction ceases to apply shall, in such circumstances as may be specified in the direction, be calculated as if the direction had never applied.

(4) A direction under this section may provide that the rate of an official pension shall, in such circumstances as may be specified in the direction, be calculated as if the direction had been in force at all times during such period as may be so specified.

(5) A direction made under subsection (2) above may be varied or revoked by a subsequent direction.]

Textual Amendments

F18 S. 59A inserted by Social Security Act 1979 (c. 18), s. 11(4)

F19 S. 59A(2A) inserted (with effect from 6.4.1988) by Social Security Act 1986 (c. 50), s. 9(9)