After paragraph 5 insert—

“5A

(1)

This paragraph applies to—

(a)

a Category A retirement pension in a case where the contributor concerned attains pensionable age on or after 6th April 2010;

(b)

a Category B retirement pension payable by virtue of section 48A above in a case where the contributor concerned attains pensionable age on or after that date;

(c)

a Category B retirement pension payable by virtue of section 48B above in a case where the contributor concerned dies on or after that date without having attained pensionable age before that date.

(2)

The contribution condition for a Category A or Category B retirement pension in relation to which this paragraph applies is that—

(a)

the contributor concerned must, in respect of each of not less than 30 years of his working life, have paid or been credited with contributions of a relevant class or been credited (in the case of 1987-88 or any subsequent year) with earnings; and

(b)

in the case of each of those years, the earnings factor derived as mentioned in sub-paragraph (3) below must be not less than the qualifying earnings factor for that year.

(3)

For the purposes of paragraph (b) of sub-paragraph (2) above, the earnings factor—

(a)

in the case of 1987-88 or any subsequent year, is that which is derived from—

(i)

so much of the contributor's earnings as did not exceed the upper earnings limit and upon which such of the contributions mentioned in paragraph (a) of that sub-paragraph as are primary Class 1 contributions were paid or treated as paid or earnings credited; and

(ii)

any Class 2 or Class 3 contributions for the year; or

(b)

in the case of any earlier year, is that which is derived from the contributions mentioned in paragraph (a) of that sub-paragraph.

(4)

Regulations may modify sub-paragraphs (2) and (3) above for the purposes of their application in a case where—

(a)

the contributor concerned has paid, or been credited with, contributions, or

(b)

contributions have been deemed to be, or treated as, paid by or credited to him,

under the National Insurance Act 1946 or the National Insurance Act 1965.”

After section 23 of the SSCBA insert—

“23AContributions credits for relevant parents and carers

(1)

This section applies to the following benefits—

(a)

a Category A retirement pension in a case where the contributor concerned attains pensionable age on or after 6th April 2010;

(b)

a Category B retirement pension payable by virtue of section 48A below in a case where the contributor concerned attains pensionable age on or after that date;

(c)

a Category B retirement pension payable by virtue of section 48B below in a case where the contributor concerned dies on or after that date without having attained pensionable age before that date;

(d)

a widowed parent's allowance payable in a case where the contributor concerned dies on or after that date;

(e)

a bereavement allowance payable in a case where the contributor concerned dies on or after that date.

(2)

The contributor concerned in the case of a benefit to which this section applies shall be credited with a Class 3 contribution for each week falling after 6th April 2010 in respect of which the contributor was a relevant carer.

(3)

A person is a relevant carer in respect of a week if the person—

(a)

is awarded child benefit for any part of that week in respect of a child under the age of 12,

(b)

is a foster parent for any part of that week, or

(c)

is engaged in caring, within the meaning given by regulations, in that week.

(4)

Regulations may make provision for a person's entitlement to be credited with Class 3 contributions by virtue of falling within subsection (3)(b) or (c) above to be conditional on the person—

(a)

applying to be so credited in accordance with the prescribed requirements, and

(b)

complying with the prescribed requirements as to the provision of information to the Secretary of State.

(5)

The contributor concerned in the case of a benefit to which this section applies shall be credited with 52 Class 3 contributions for each tax year ending before 6th April 2010 in which the contributor was precluded from regular employment by responsibilities at home within the meaning of regulations under paragraph 5(7) of Schedule 3.

(6)

But the maximum number of tax years for which a person can be credited with contributions under subsection (5) above is—

(a)

in the case of a benefit mentioned in subsection (1)(a) to (c) above, 22;

(b)

in the case of a benefit mentioned in subsection (1)(d) or (e) above, half the requisite number of years of the person's working life.

(7)

The table in paragraph 5(5) of Schedule 3 (requisite number of years of a working life of given duration) applies for the purposes of subsection (6)(b) above as it applies for the purposes of the second condition set out in paragraph 5(3) of that Schedule.

(8)

For the purpose of determining entitlement to a benefit to which this section applies, a week that falls partly in one tax year and partly in another is to be treated as falling in the year in which it begins and not in the following year.

(9)

In this section—

“the contributor concerned” has the meaning given in section 21(5)(a) above;

“foster parent” has the meaning given by regulations.”

After section 150 of the Administration Act insert—

“150AAnnual up-rating of basic pension etc. and standard minimum guarantee

(1)

The Secretary of State shall in each tax year review the following amounts in order to determine whether they have retained their value in relation to the general level of earnings obtaining in Great Britain—

(a)

the amount of the basic pension;

(b)

the specified amounts in the case of Category B, C or D retirement pensions;

(c)

the specified amounts in the case of industrial death benefit; and

(d)

the amounts of the standard minimum guarantee for the time being prescribed under section 2(4) and (5)(a) and (b) of the State Pension Credit Act 2002.

(2)

Where it appears to the Secretary of State that the general level of earnings is greater at the end of the period under review than it was at the beginning of that period, he shall lay before Parliament the draft of an order which increases each of the amounts referred to in subsection (1) above by a percentage not less than the percentage by which the general level of earnings is greater at the end of the period than it was at the beginning.

(3)

Subsection (2) above does not require the Secretary of State to provide for an increase in any case if it appears to him that the amount of the increase would be inconsiderable.

(4)

The Secretary of State may, in providing for an increase in pursuance of subsection (2) above, adjust the amount of the increase so as to round the sum in question up or down to such extent as he thinks appropriate.

(5)

The Secretary of State shall lay with a draft order under this section a copy of a report by the Government Actuary or the Deputy Government Actuary giving that Actuary's opinion on the likely effect on the National Insurance Fund of any parts of the order relating to sums payable out of that Fund.

(6)

If a draft order laid before Parliament under this section is approved by a resolution of each House, the Secretary of State shall make the order in the form of the draft.

(7)

An order under this section shall be framed so as to bring the increase in question into force in the week beginning with the first Monday in the tax year following that in which the order is made.

(8)

For the purposes of any review under subsection (1) above the Secretary of State shall estimate the general level of earnings in such manner as he thinks fit.

(9)

If a draft order under this section is combined with a draft up-rating order under section 150 above, the report required by virtue of subsection (5) above may be combined with that required by virtue of section 150(8) above.

(10)

In this section—

“the amount of the basic pension” means the first amount specified in section 44(4) of the Contributions and Benefits Act (weekly rate of Category A retirement pension);

“the specified amounts in the case of Category B, C or D retirement pensions” means—

(a)

the amount specified in paragraph 5 of Part 1 of Schedule 4 to the Contributions and Benefits Act, and

(b)

the amounts specified in paragraphs 6 and 7 of Part 3 of that Schedule;

“the specified amounts in the case of industrial death benefit” means—

(a)

the amounts specified in paragraph 10 of Part 5 of that Schedule (apart from the amount of the initial rate), and

(b)

the amount specified in paragraph 11 of that Part of that Schedule.”

In section 39 of the SSCBA (rate of widowed mother's allowance and widow's pension) after subsection (2) insert—

“(2A)

In its application by virtue of subsection (1) above, section 44(4) below is to be read as if for the first amount specified in that provision there were substituted a reference to the amount prescribed for the purposes of this subsection.”

In section 176(1) of the SSCBA (instruments subject to affirmative procedure), before paragraph (a) insert—

“(za)

regulations under section 5 specifying the lower earnings limit for the tax year following the designated tax year (see section 5(4) of the Pensions Act 2007) or any subsequent tax year;”.

After section 44A of the SSCBA insert—

“44BDeemed earnings factors: 2010-11 onwards

(1)

This section applies to 2010-11 and subsequent tax years.

(2)

For the purposes of section 44(6)(za) above, if any of Conditions A to C in subsections (3) to (5) below is satisfied for a relevant year to which this section applies, a pensioner is deemed to have an earnings factor for that year which—

(a)

is derived from so much of his earnings as did not exceed the applicable limit and on which primary Class 1 contributions were paid; and

(b)

is equal to the amount which, when added to any other earnings factors taken into account under that provision, produces an aggregate of earnings factors equal to the low earnings threshold.

(3)

Condition A is that the pensioner would, apart from this section, have an earnings factor for the year—

(a)

equal to or greater than the qualifying earnings factor (“the QEF”) for the year, but

(b)

less than the low earnings threshold for the year.

(4)

Condition B is that the pensioner—

(a)

would, apart from this section and section 44C below, have an earnings factor for the year less than the QEF for the year, but

(b)

is entitled to an aggregate amount of earnings factor credits for that year under section 44C below equal to the difference between the QEF for the year and the earnings factor mentioned in paragraph (a) above.

(5)

Condition C is that the pensioner is entitled to 52 earnings factor credits for that year under section 44C below.

(6)

This section has effect in relation to the flat rate introduction year and any subsequent tax year as if—

(a)

subsection (2)(b) referred to an aggregate of earnings factors greater than the QEF, but less than the low earnings threshold, for the year (rather than to one equal to that threshold); and

(b)

Condition A in subsection (3) (and the reference to it in subsection (2)) were omitted.

(7)

In this section—

(a)

“the applicable limit” has the same meaning as in section 44 above;

(b)

“the low earnings threshold” means the low earnings threshold for the year concerned as specified in section 44A above; and

(c)

in subsections (3) and (4), any reference to the pensioner's earnings factor for a relevant year is to be construed in accordance with section 44(6)(za) above.

44CEarnings factor credits

(1)

This section applies, for the purposes of Conditions B and C in section 44B(4) and (5) above, to 2010-11 and subsequent tax years.

(2)

In respect of each week—

(a)

which falls in a relevant year to which this section applies, and

(b)

in respect of which a pensioner is eligible for earnings factor enhancement,

the pensioner is entitled to an earnings factor credit equal to 1/52 of the QEF for that year.

This is subject to subsection (5) below.

(3)

A pensioner is eligible for earnings factor enhancement in respect of a week if one or more of the following apply—

(a)

he was a relevant carer in respect of that week for the purposes of section 23A above (see section 23A(3));

(b)

carer's allowance was payable to him for any part of that week, or would have been so payable but for the fact that under regulations the amount payable to him was reduced to nil because of his receipt of other benefits;

(c)

severe disablement allowance was payable to him for any part of that week;

(d)

long-term incapacity benefit was payable to him for any part of that week or would have been so payable but for the fact that—

(i)

he did not satisfy the contribution conditions in paragraph 2 of Schedule 3, or

(ii)

under regulations the amount payable to him was reduced to nil because of his receipt of other benefits or of payments from an occupational pension scheme or personal pension scheme;

(e)

he satisfies such other conditions as may be prescribed.

(4)

In subsection (3)(d)(ii) above “occupational pension scheme” and “personal pension scheme” have the meanings given by subsection (6) of section 30DD above for the purposes of subsection (5) of that section.

(5)

For the purposes of Condition B in section 44B(4) above a person is not entitled to an aggregate amount of earnings factor credits in respect of a year that is greater than the difference referred to in that Condition.

(6)

For the purposes of this section a week that falls partly in one tax year and partly in another is to be treated as falling in the year in which it begins and not in the following year.

(7)

In section 44B above and this section—

(a)

“the QEF” means the qualifying earnings factor, and

(b)

any reference to a person being entitled to an earnings factor credit of a particular amount (or to an aggregate amount of earnings factor credits) for a year is a reference to the person being treated as having for that year an earnings factor (within the meaning of section 44(6)(za) above) of the amount in question by virtue of subsection (2) above.”

In subsection (2) (calculation of the weekly rate of additional pension) after paragraph (c) insert“; and

(d)

in relation to the flat rate introduction year and subsequent tax years, the weekly equivalent of the amount calculated in accordance with Schedule 4B to this Act.”

In section 122 of the SSCBA (interpretation of Parts 1 to 6) in subsection (1) at the appropriate place insert—

““the flat rate introduction year” means such tax year as may be designated as such by order;”.

After section 13(1) of the Pension Schemes Act 1993 (c. 48) (contracted-out scheme: requirement for guaranteed minimum pension) insert—

“(1A)

But a scheme may be amended so as to omit provision of the kind specified in subsection (1)(a) and (b) if the conditions specified in section 24B are satisfied.”

After section 17(1) of that Act (minimum pension for survivors) insert—

“(1A)

But a scheme may be amended so as to omit provision of the kind specified in subsection (1) if the conditions specified in section 24B are satisfied.”

Before section 25 of that Act (before the italic cross-heading) insert—

“24AConversion of guaranteed minimum pension into other benefits: introduction

In this section and sections 24B to 24H—

(a)

the rules specified in sections 13(1)(a) and (b) and 17(1) are referred to as the “guaranteed minimum pension rules”,

(b)

“GMP conversion” means amendment of the scheme in relation to an earner so that it no longer contains the guaranteed minimum pension rules,

(c)

a “GMP-converted scheme” is a scheme which has been subject to GMP conversion,

(d)

“the conversion date” means the date on which that amendment takes effect,

(e)

“the pre-conversion benefits” means the benefits provided under the scheme immediately before the conversion date (disregarding money purchase benefits),

(f)

“the post-conversion benefits” means the benefits which are provided under the converted scheme (disregarding money purchase benefits),

(g)

“the converted scheme” means the scheme as it has effect immediately after conversion, and

(h)

“the trustees” in relation to a scheme means the trustees, managers or other persons responsible under the scheme for effecting amendments of it.

24BThe conversion conditions

(1)

This section specifies the conditions referred to in sections 13(1A) and 17(1A) (for exemption from the requirement to guarantee a minimum pension).

(2)

Condition 1 is that the post-conversion benefits must be actuarially at least equivalent to the pre-conversion benefits.

(3)

Condition 2 is that if the earner was entitled immediately before the conversion date to the payment of a pension under the scheme, the converted scheme does not provide for a reduction of, or have the effect of reducing, the amount of that pension immediately after conversion.

(4)

Condition 3 is that the post-conversion benefits must not include money purchase benefits, apart from any money purchase benefits provided under the scheme immediately before the conversion date.

(5)

Condition 4 is that the converted scheme provides survivors' benefits in accordance with section 24D in such circumstances, and during such periods, as are prescribed by regulations.

(6)

Condition 5 is that the procedural requirements of section 24E have been complied with.

(7)

In applying these conditions to a scheme in respect of an earner—

(a)

it is immaterial whether or not on the conversion date the scheme was also converted in respect of other earners, and

(b)

it is immaterial (except for Condition 2) whether or not on the conversion date the earner was entitled to the payment of a pension under the scheme.

24CActuarial equivalence

Regulations may make provision for determining actuarial equivalence for the purpose of Condition 1 of section 24B.

24DSurvivors' benefits

(1)

This section specifies the benefits mentioned in Condition 4 of section 24B.

(2)

The first benefit is that if the earner dies (whether before or after attaining normal pension age) leaving a widow, she is entitled to a pension of at least half the value of the pension to which the earner would have been entitled by reference to employment during the period—

(a)

beginning with 6th April 1978, and

(b)

ending with 5th April 1997.

(3)

The second benefit is that if the earner dies (whether before or after attaining normal pension age) leaving a widower or surviving civil partner, he or she is entitled to a pension of at least half the value of the pension to which the earner would have been entitled by reference to employment during the period—

(a)

beginning with 6th April 1988, and

(b)

ending with 5th April 1997.

24EProcedural requirements

(1)

This section specifies the procedural requirements that must be complied with in order to satisfy Condition 5 of section 24B.

(2)

The employer in relation to the scheme must consent to the GMP conversion in advance.

(3)

The trustees must take all reasonable steps to—

(a)

consult the earner in advance, and

(b)

notify all members, and survivors, affected by the GMP conversion before, or as soon as is reasonably practicable after, the conversion date.

(4)

The Commissioners for Her Majesty's Revenue and Customs must be notified on or before the conversion date—

(a)

that the GMP conversion will occur or has occurred, and

(b)

that it affects the earner.

24FTransfer out

(1)

Regulations may prescribe—

(a)

restrictions on the transfer of the earner's accrued rights under a GMP-converted scheme;

(b)

conditions which must be complied with on the transfer of the earner's accrued rights under a GMP-converted scheme.

(2)

Section 20(2) and (5) shall apply to regulations under this section.

(3)

Where a member of a non-GMP-converted scheme makes an application under section 95(1), the trustees may with his consent adjust any guaranteed cash equivalent so as to reflect rights that would have accrued if the scheme had been subject to GMP conversion in accordance with Conditions 1 to 4 of section 24B.

24GPowers to amend schemes

(1)

The trustees of an occupational pension scheme may by resolution modify it so as to effect GMP conversion (whether in relation to present earners, pensioners or survivors) in accordance with the conditions in section 24B.

(2)

The subsisting rights provisions within the meaning of section 67 of the Pensions Act 1995 (c. 26) shall not apply to a power conferred by an occupational pension scheme to modify the scheme in so far as the power enables GMP conversion in accordance with the conditions in section 24B.

(3)

Where a scheme is amended to effect GMP conversion the trustees may include other amendments which they think are necessary or desirable as a consequence of, or to facilitate, the GMP conversion.

(4)

Where an occupational pension scheme is being wound up, the trustees may, before the winding up is completed, adjust rights under the scheme so as to reflect what would have happened if the scheme had been subject to GMP conversion in accordance with Conditions 1 to 4 of section 24B.

(5)

In the application of section 24E by virtue of subsection (1) above, a reference to the earner includes a reference to a pensioner or survivor whose pension is subjected to GMP conversion.

24HEnforcement of GMP conversion conditions

(1)

If the Regulatory Authority thinks that the conditions of section 24B have not been satisfied in relation to an amendment, modification or adjustment effected in accordance with any of sections 13(1A), 17(1A), 24F and 24G, the Regulatory Authority may make an order declaring the amendment, modification or adjustment void—

(a)

in respect of a specified person or class of person,

(b)

to a specified extent, and

(c)

as from a specified time.

(2)

Where the Regulatory Authority makes an order under subsection (1) it may—

(a)

require the trustees of the scheme concerned to take specified steps;

(b)

declare that specified action of the trustees shall not be treated as a contravention of the scheme if it would not have been a contravention if the order under subsection (1) had not been made.

(3)

An order may be made under subsection (1) before or after the amendment, modification or adjustment takes effect.

(4)

If the Regulatory Authority thinks that the process of effecting a GMP conversion of a scheme has been commenced and that a relevant condition of section 24B is not being complied with, or may not be complied with, the Regulatory Authority may by order—

(a)

prohibit the taking of further steps in the GMP conversion (whether generally or in relation to specified steps), and

(b)

require the trustees of the scheme to take specified steps before resuming the process of GMP conversion.

(5)

Section 10 of the Pensions Act 1995 (civil penalties) shall apply to a trustee who has failed to take all reasonable steps to secure compliance with the conditions of section 24B in relation to an amendment, modification or adjustment effected in accordance with any of sections 13(1A), 17(1A), 24F and 24G.”

At the end of section 47 of that Act (deductions from social security payments) add—

“(9)

For the purposes of section 46, a person shall be treated as entitled to a guaranteed minimum pension to which, in the opinion of the Commissioners for Her Majesty's Revenue and Customs, he would have been entitled but for the amendment of a scheme so that it no longer contains the guaranteed minimum pension rules.

(10)

Where the earner's accrued rights have been transferred after the amendment of the scheme, in making the calculation under subsection (9) the Commissioners shall assume the application of section 16(1) after the transfer.

(11)

In making the calculation under subsection (9) the Commissioners shall ignore any effect of the scheme being wound up.”

In section 97(5) of the Pensions Act 2004 (c. 35) (Pensions Regulator: special procedure) after paragraph (t) insert—

“(ta)

a power under section 24H of the Pension Schemes Act 1993;”.

At the end of Part 1 of Schedule 2 to that Act (reserved regulatory functions: Pension Schemes Act 1993) add—

“3A

A power under section 24H (compliance with conditions of conversion of guaranteed minimum pension).”

After subsection (4) of that section insert—

“(4A)

The dispute resolution arrangements may make provision for securing that an application for the resolution of a pension dispute may not be made to the trustees or managers unless—

(a)

the matters in dispute have been previously referred to a person of a description specified in the arrangements (“the specified person”) in order for him to consider those matters, and

(b)

the specified person has given his decision on those matters,

and for enabling the specified person's decision to be confirmed or replaced by the decision taken by the trustees or managers on the application, after reconsidering those matters.”

After subsection (5) of that section insert—

“(5A)

In a case where a reference is made to the specified person in accordance with provision made under subsection (4A), subsection (5) applies in relation to the specified person as it applies in relation to the trustees or managers in a case where an application for the resolution of a pension dispute is made to them.”

For subsection (3) of that section substitute—

“(3)

The procedure—

(a)

must include provision requiring an application to which subsection (3A) applies to be made by the end of such reasonable period as is specified;

(b)

may include provision about the time limits for making such other applications for the resolution of pension disputes as are specified.

(3A)

This subsection applies to—

(a)

any application by a person with an interest in a scheme as mentioned in section 50A(1)(e), and

(b)

any application by a person with an interest in a scheme as mentioned in section 50A(1)(f) who is claiming to be such a person as is mentioned in section 50A(1)(e).”

After subsection (4) of that section insert—

“(4A)

The provision made under subsection (4)(c) may include provision for decisions of the trustees or managers to be taken on their behalf by one or more of their number.”

After subsection (1) insert—

“(1A)

The Secretary of State must, in particular, make provision for securing that (subject to any relevant restriction) the aggregate amount of—

(a)

any annual payment payable to a qualifying member of such a scheme, and

(b)

the member's actual pension (if any),

is not less than 80% of the member's expected pension, irrespective of the date of his attaining normal retirement age (or the date when he would have attained that age if he dies before attaining it).

(1B)

A “relevant restriction” means any provision of the regulations which—

(a)

operates to restrict the amount of an annual payment by means of a cap on the product of the calculation of a specified fraction of the member's expected pension, or

(b)

provides for an annual payment not to be payable where the member's actual pension exceeds any specified amount.”

In subsection (2), before the definition of “qualifying member” insert—

““actual pension” and “expected pension”, in relation to a qualifying member of a qualifying pension scheme, mean the amounts which, in accordance with regulations under subsection (1), are to be taken into account as the member's actual pension and expected pension, respectively, in determining the amount of any annual payment payable to the member;

“annual payment” has the meaning given by regulations under subsection (1);”.