http://www.legislation.gov.uk/id/ukpga/2014/19

SCHEDULES

SCHEDULE 1Transitional rate of state pension: calculating the amount

Section 5

Part 1Introduction

1 (1)

This Schedule sets out how to calculate the amounts used to work out the transitional rate of a person's state pension.

(2)

Part 2 of the Schedule sets out how to calculate the amount for a person's pre-commencement qualifying years.

(3)

Part 3 of the Schedule sets out how to calculate the amount for a person's post-commencement qualifying years (if any).

Part 2Amount for pre-commencement qualifying years

How to calculate the amount for pre-commencement qualifying years

2

A person's amount for pre-commencement qualifying years is calculated as follows.

Step 1 - calculate the person's pension under the old system Calculate the weekly rate based on the old state pension and graduated retirement benefit (see paragraph 3 for more about this).
Step 2 - calculate a pension based on the new system Calculate the weekly rate based on the new state pension (see paragraph 4 for more about this).
Step 3 - take whichever rate is higher (the foundation amount) Take whichever of the rates found under Steps 1 and 2 is higher.
Step 4 - revalue to date when the person reached pensionable age Revalue the amount of that rate in accordance with paragraph 6.

The amount for the person's pre-commencement qualifying years is the amount as revalued under Step 4.

Step 1: calculation of the person's pension under the old system

3 (1)

For the purposes of Step 1 of the calculation in paragraph 2, the weekly rate based on the old state pension and graduated retirement benefit is—

(a)

the rate of any Category A retirement pension and graduated retirement benefit to which the person would have been entitled if the person had reached pensionable age on 6 April 2016, or

(b)

the rate of any graduated retirement benefit to which the person would have been entitled under section 36(7) of the National Insurance Act 1965 (persons not entitled to retirement pension) if the person had reached pensionable age on that date.

(2)

The following rules apply for the purposes of calculating that rate.

(3)

Calculate the rate that would have had effect on 6 April 2016 (but see sub-paragraph (6)).

(4)

Ignore—

(a)

the amendments made by paragraphs 53 and 55 of Schedule 12 (which limit Category A retirement pensions and graduated retirement benefit to people who reach pensionable age before 6 April 2016);

(b)

any requirement to make a claim;

(c)

any provision suspending payment of, or disqualifying a person from receiving, any amount;

(d)

section 45B of the Contributions and Benefits Act (reduction of additional pension because of pension sharing);

(e)

section 37 of the National Insurance Act 1965 (graduated retirement benefit for widows etc).

(5)

Read the reference in section 45(4)(b) of the Contributions and Benefits Act (additional pension) to a person's working life as a reference to the period—

(a)

beginning with the tax year in which the person reached 16, and

(b)

ending with the tax year before the one in which the person actually reached pensionable age.

(6)

If an order under section 150 or 150A of the Administration Act (up-rating) is made before 6 April 2016 and it provides for an increase to come into force after that date, it is to be treated for the purposes of calculating the rate under this paragraph as having already come into force.

(7)

Where regulations under section 22(5ZA) of the Contributions and Benefits Act have the effect that a person is credited, on or after 6 April 2016, with earnings or contributions for a tax year starting before that date, the earnings or contributions are to be treated for the purposes of calculating the rate under this paragraph as having been credited before 6 April 2016.

(8)

A determination under section 48A(2) of the Pension Schemes Act 1993 (contracting-out: reinstatement in state scheme following payment of contributions equivalent premium) made on or after 6 April 2016 is to be treated for the purposes of calculating the rate under this paragraph as having been made before 6 April 2016.

Step 2: calculation of a pension based on the new system

4 (1)

For the purposes of Step 2 of the calculation in paragraph 2, the weekly rate based on the new state pension is as follows.

(2)

If the person has 35 or more pre-commencement qualifying years, the rate is equal to—

(a)

the full rate of the state pension on 6 April 2016, less

(b)

any amount to reflect contracting out under the old system (see paragraph 5).

(3)

If the person has fewer than 35 pre-commencement qualifying years, the rate is equal to—

(a)

the appropriate proportion of the full rate of the state pension on 6 April 2016, less

(b)

any amount to reflect contracting out under the old system (see paragraph 5).

(4)

The “appropriate proportion”, in relation to a person, is—

\frac{1}{35} \times the person's number of pre-commencement qualifying years.

5 (1)

In paragraph 4(2) and (3) references to an “amount to reflect contracting out under the old system” are to an amount equal to any difference between—

(a)

the amount of any additional pension included in the Category A retirement pension calculated for the purposes of Step 1 of the calculation in paragraph 2, and

(b)

the amount of any additional pension that would have been included if—

(i)

sections 46 and 48A of the Pension Schemes Act 1993 were ignored, and

(ii)

for the purposes of calculating the amounts referred to in section 45(2)(c) and (d) of the Contributions and Benefits Act any earnings paid to or for the benefit of the person in respect of contracted-out employment were treated as if they were not in respect of contracted-out employment.

(2)

“Contracted-out employment” means employment qualifying a person for a pension provided by a salary related contracted-out scheme, a money purchase contracted-out scheme or an appropriate personal pension scheme (and expressions used in this definition have the same meaning as in the Pension Schemes Act 1993).

Step 4: revaluation

6 (1)

This paragraph determines how the amount mentioned in Step 4 of the calculation in paragraph 2 is to be revalued for the purposes of that Step.

(2)

If the amount is equal to or less than the full rate of the state pension on 6 April 2016, the amount is to be revalued in accordance with increases in the full rate of the state pension (see sub-paragraph (4)).

(3)

If the amount is greater than the full rate of the state pension on 6 April 2016—

(a)

so much of the amount as is equal to the full rate of the state pension on 6 April 2016 is to be revalued in accordance with increases in the full rate of the state pension (see sub-paragraph (4)), and

(b)

so much of the amount as exceeds the full rate of the state pension on that date is to be revalued in accordance with increases in the general level of prices (see sub-paragraph (5)).

(4)

For the purposes of sub-paragraphs (2) and (3)(a), an amount is revalued in accordance with increases in the full rate of the state pension by increasing it by the same percentage as any increase in the full rate of the state pension in the period—

(a)

beginning with 6 April 2016, and

(b)

ending with the day on which the person reached pensionable age.

(5)

For the purposes of sub-paragraph (3)(b), an amount is revalued in accordance with increases in the general level of prices by adding—

(a)

the amount, and

(b)

the amount multiplied by the revaluing percentage specified in the last order under section 148AC(3) of the Administration Act to come into force before the person reached pensionable age.

Part 3Amount for post-commencement qualifying years

7 (1)

A person's amount for post-commencement qualifying years (if any) is calculated as follows.

(2)

If the person has 35 or more post-commencement qualifying years, the amount is equal to the full rate of the state pension on the day on which the person reached pensionable age.

(3)

If the person has fewer than 35 post-commencement qualifying years, the amount is equal to the following proportion of the full rate of the state pension on the day on which the person reached pensionable age—

\frac{1}{35} \times the person's number of post-commencement qualifying years.

SCHEDULE 2Transitional rate of state pension: up-rating

Section 5

1

This Schedule sets out how to up-rate the transitional rate of a person's state pension.

2

In this Schedule a reference to the transitional rate of a person's state pension is to the rate—

(a)

taking into account any reduction under section 14, but

(b)

ignoring any increase under section 17.

3 (1)

The transitional rate of a person's state pension is to be increased under this paragraph if it is equal to or less than the full rate.

(2)

If at any time the full rate of the state pension is increased, the person's transitional rate is increased (at that time) by the same percentage as the increase in the full rate.

4 (1)

The transitional rate of a person's state pension is to be increased under this paragraph if it exceeds the full rate.

(2)

If at any time the full rate of the state pension is increased, the person's transitional rate is increased (at that time) by the same amount as the amount by which the full rate is increased.

(3)

If at any time an order under section 151A of the Administration Act comes into force, the person's transitional rate is increased (at that time) by an amount equal to the appropriate percentage of the excess.

(4)

In sub-paragraph (3)—

“the appropriate percentage” means the percentage specified in the order, and

“the excess” means the amount by which the transitional rate exceeded the full rate immediately before the order came into force.

SCHEDULE 3Survivor's pension under section 7: inherited amount

Section 7

Introduction

1

This Schedule—

(a)

sets out the circumstances in which a person (the “pensioner”) is entitled to an inherited amount for the purpose of section 7, and

(b)

determines that amount.

Dead spouse or civil partner in old state pension system etc

2 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—

(a)

the marriage took place or the civil partnership was formed before 6 April 2016,

(b)

the spouse or civil partner died before 6 April 2016,

(c)

the pensioner was under pensionable age when the spouse or civil partner died, and

(d)

the pensioner would, on reaching pensionable age, have been entitled to a Category B retirement pension under section 48B(4) or (4A) or 48BB of the Contributions and Benefits Act if the words “before 6 April 2016” were omitted.

(2)

The inherited amount is equal to the weekly rate at which that Category B retirement pension would have been payable on the day on which the pensioner reached pensionable age if any element of the rate attributable to the basic pension were ignored.

3 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—

(a)

the marriage took place or the civil partnership was formed before 6 April 2016,

(b)

the spouse or civil partner reached pensionable age before 6 April 2016 but died on or after that date,

(c)

the pensioner was under pensionable age when the spouse or civil partner died, and

(d)

the pensioner would, on reaching pensionable age, have been entitled to a Category B retirement pension under section 48BB of the Contributions and Benefits Act if in subsection (3) of that section: (i) the words “before 6 April 2016” were omitted, and (ii) the reference to a bereavement allowance were a reference to bereavement support payment under section 30 of this Act.

(2)

The inherited amount is equal to the weekly rate at which that Category B retirement pension would have been payable on the day on which the pensioner reached pensionable age if section 48BB(8) and (9) of the Contributions and Benefits Act were ignored.

4 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—

(a)

the marriage took place or the civil partnership was formed before 6 April 2016,

(b)

the spouse or civil partner reached pensionable age before 6 April 2016 but died on or after that date,

(c)

the pensioner was over pensionable age when the spouse or civil partner died, and

(d)

the pensioner would, when the spouse or civil partner died, have been entitled to a Category B retirement pension under section 48B(1) or (1A) of the Contributions and Benefits Act if the words “before 6 April 2016” were omitted.

(2)

The inherited amount is equal to the weekly rate at which that Category B retirement pension would have been payable on the day on which the spouse or civil partner died if any element of the rate attributable to the basic pension were ignored.

Dead spouse or civil partner in new state pension system

5 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—

(a)

the marriage took place or the civil partnership was formed before 6 April 2016,

(b)

the pensioner was over pensionable age when the spouse or civil partner died,

(c)

the spouse or civil partner was, immediately before his or her death, entitled to a state pension payable at the transitional rate, and

(d)

that transitional rate exceeded the full rate of the state pension.

(2)

The inherited amount is half of the amount by which the transitional rate of the state pension for the spouse or civil partner exceeded the full rate of the state pension immediately before the death.

6 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—

(a)

the marriage took place or the civil partnership was formed before 6 April 2016,

(b)

the pensioner was under pensionable age when the spouse or civil partner died,

(c)

the spouse or civil partner was, immediately before his or her death, entitled to a state pension payable at the transitional rate,

(d)

that transitional rate exceeded the full rate of the state pension, and

(e)

the pensioner did not marry or form a civil partnership after the death and before reaching pensionable age.

(2)

The inherited amount is half of the amount by which the transitional rate of the state pension for the spouse or civil partner would have exceeded the full rate of the state pension if he or she had been alive on the day on which the pensioner reached pensionable age.

7 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—

(a)

the marriage took place or the civil partnership was formed before 6 April 2016,

(b)

the pensioner was over pensionable age when the spouse or civil partner died,

(c)

the spouse or civil partner was under pensionable age when he or she died but would have been entitled to a state pension payable at the transitional rate if he or she had reached pensionable age on the day of the death, and

(d)

that transitional rate would have exceeded the full rate of the state pension.

(2)

8 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—

(a)

the marriage took place or the civil partnership was formed before 6 April 2016,

(b)

the pensioner was under pensionable age when the spouse or civil partner died,

(c)

the spouse or civil partner died on or after 6 April 2016,

(d)

the spouse or civil partner was under pensionable age when he or she died,

(e)

the spouse or civil partner would have been entitled to a state pension payable at the transitional rate if he or she had reached pensionable age on the same day as the pensioner,

(f)

that transitional rate would have exceeded the full rate of the state pension, and

(g)

the pensioner did not marry or form a civil partnership after the death and before reaching pensionable age.

(2)

The inherited amount is half of the amount by which the transitional rate of the state pension for the spouse or civil partner would have exceeded the full rate of the state pension if he or she had reached pensionable age on the same day as the pensioner.

Supplementary

9

When determining entitlement to, or calculating, an inherited amount under this Schedule based on entitlement to an old state pension or a state pension under this Part of this Act ignore—

(a)

any requirement to make a claim for that pension;

(b)

any provision suspending payment of, or disqualifying a person from receiving, any amount of that pension.

SCHEDULE 4Survivor's pension under section 7: up-rating

Section 7

Introduction

1

This Schedule sets out how to up-rate the rate of a person's state pension under section 7.

2

In this Schedule a reference to the rate of a person's state pension is to the rate—

(a)

ignoring any reduction under section 7(4) (in the case of a state pension under section 7),

(b)

taking into account any reduction under section 14 (in the case of a state pension under section 4), and

(c)

ignoring any increase under section 17.

3

In this Schedule a reference to “the amount of any state pension that has priority” means the rate of any state pension to which the person is entitled under section 2, 4 or 12.

Rate of section 7 pension, when added to any priority pension, is less than the full rate

4 (1)

The rate of the person's state pension under section 7 is to be increased under this paragraph if, when added to the amount of any state pension that has priority, it is equal to or less than the full rate of the state pension.

(2)

If at any time the full rate is increased, the rate of the person's state pension under section 7 is increased (at that time) by the same percentage as the increase in the full rate.

Rate of section 7 pension, when added to any priority pension, straddles the full rate

5 (1)

The rate of the person's state pension under section 7 is to be increased under this paragraph if—

(a)

the amount of any state pension that has priority is less than the full rate of the state pension, but

(b)

the rate of the state pension under section 7, when added to the amount of any state pension that has priority, exceeds the full rate.

(2)

If at any time the full rate of the state pension is increased, the rate of the person's state pension under section 7 is increased (at that time) by an amount equal to the appropriate percentage of the shortfall immediately before that time.

(3)

If at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under section 7 is increased (at that time) by an amount equal to the appropriate percentage of the excess immediately before the order comes into force.

(4)

In this paragraph—

“the appropriate percentage”—
1. (a)
  in sub-paragraph (2), means the percentage by which the full rate is increased;
2. (b)
  in sub-paragraph (3), means the percentage specified in the order;
“the excess” means the amount by which the rate of the state pension under section 7, when added to the amount of any state pension that has priority, exceeds the full rate;
“the shortfall” means the amount by which the amount of any state pension that has priority is less than the full rate.

Priority pension alone is equal to or higher than the full rate

6 (1)

The rate of the person's state pension under section 7 is to be increased under this paragraph if the amount of any state pension that has priority is equal to or higher than the full rate of the state pension.

(2)

If at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under section 7 is increased (at that time) by the percentage specified in the order.

SCHEDULE 5Survivor's pension under section 9: inherited deferral amount

Section 9

Introduction

1

This Schedule—

(a)

sets out the circumstances in which a person (the “pensioner”) is entitled to an inherited deferral amount for the purpose of section 9, and

(b)

determines that amount.

Dead spouse or civil partner entitled to old state pension with deferral increase

2 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited deferral amount under this paragraph if—

(a)

the spouse or civil partner was entitled to an old state pension with an increase under paragraph 1 or 2A of Schedule 5 to the Contributions and Benefits Act, and

(b)

the pensioner would, on reaching pensionable age or on the death of the spouse or civil partner, have been entitled to an old state pension if in the relevant provisions of the Contributions and Benefits Act: (i) the words “before 6 April 2016” were omitted, and (ii) any reference to a bereavement allowance included a reference to bereavement support payment under section 30 of this Act.

(2)

The inherited deferral amount is equal to the amount by which the weekly rate of the old state pension for the pensioner would have been increased under paragraph 4 of Schedule 5 to the Contributions and Benefits Act on the day on which the pensioner became entitled to the inherited deferral amount.

(3)

For the purposes of calculating the amount of that increase, paragraph 4(1A) of Schedule 5 to the Contributions and Benefits Act has effect as if after the words “apart from” (in each place) there were inserted “ this paragraph and ”.

Dead spouse or civil partner's entitlement to old state pension deferred at time of death

3 (1)

A pensioner whose spouse or civil partner has died is entitled to an inherited deferral amount under this paragraph if—

(a)

the spouse or civil partner's entitlement to an old state pension was deferred when he or she died, and

(b)

(2)

(3)

For the purposes of calculating the amount of that increase—

(a)

a pensioner who is not entitled to a choice under section 8 is to be treated as having met the condition in paragraph 4(1)(c) of Schedule 5 to the Contributions and Benefits Act,

(b)

a pensioner who has chosen under section 8 to be paid a state pension under section 9 is to be treated as having met the condition in paragraph 4(1)(b) of Schedule 5 to the Contributions and Benefits Act, and

(c)

paragraph 4(1A) of Schedule 5 to the Contributions and Benefits Act has effect as if after the words “apart from” (in each place) there were inserted “ this paragraph and ”.

(4)

In this paragraph “deferred” has the meaning given by section 55(3) of the Contributions and Benefits Act.

“The relevant provisions” of the Contributions and Benefits Act

4

For the purposes of this Schedule “the relevant provisions” of the Contributions and Benefits Act are those mentioned in section 8(9)(b).

Supplementary

5

When determining entitlement to, or calculating, an inherited deferral amount under this Schedule based on entitlement to an old state pension ignore—

(a)

any requirement to make a claim for that pension;

(b)

any provision suspending payment of, or disqualifying a person from receiving, any amount of that pension.

SCHEDULE 6Reduced rate elections: effect on rate of section 4 pension

Section 11

Introduction

1

This Schedule modifies the rules about the transitional rate of the state pension for a woman if a reduced rate election was in force in respect of her at the beginning of the relevant 35-year period (and expressions used in this paragraph have the same meaning as in section 11).

Increased transitional rate for woman married to person over pensionable age etc

2 (1)

This paragraph applies to the woman if on reaching pensionable age—

(a)

she is married to a person who has reached pensionable age, or

(b)

she is in a civil partnership with a person who has reached that age.

(2)

The transitional rate of the state pension for the woman is—

(a)

the rate determined for her under section 5, or

(b)

if higher, a weekly rate equal to the modified amount for her pre-commencement qualifying years alone.

(3)

The modified amount for the woman's pre-commencement qualifying years alone is the amount that would be calculated under Schedule 1 for her pre-commencement qualifying years alone if the basic pension in any Category A retirement pension calculated for her for the purposes of paragraph 3 of that Schedule were equal to the basic Category B amount.

(4)

“The basic Category B amount” is the amount specified in paragraph 5 of Part 1 of Schedule 4 to the Contributions and Benefits Act on 6 April 2016.

(5)

To find out what happens if the marriage or civil partnership comes to an end, see paragraph 4.

Increased transitional rate for widows or divorcees etc

3 (1)

This paragraph applies to the woman if on reaching pensionable age she is not married or in a civil partnership but she has been married or in a civil partnership before.

(2)

The transitional rate of the state pension for the woman is—

(a)

the rate determined for her under section 5, or

(b)

if higher, a weekly rate equal to the modified amount for her pre-commencement qualifying years alone.

(3)

(4)

“The full amount of the basic pension” is the amount of the basic pension specified in section 44(4) of the Contributions and Benefits Act on 6 April 2016.

Recalculation of transitional rate where circumstances change

4 F1(1)

If the woman is married or in a civil partnership on reaching pensionable age but the marriage or civil partnership comes to an end (because of the death of her spouse or civil partner or otherwise)—

(a)

her transitional rate is to be recalculated applying paragraph 3(2), and

(b)

Schedule 2 (up-rating) applies as if the recalculated rate had been the woman's transitional rate on the day on which she reached pensionable age.

F2(2)

For the purposes of this paragraph—

(a)

a civil partnership is not to be treated as having come to an end by reason of its having been converted into a marriage under Part 3 of the Marriage and Civil Partnership (Northern Ireland) (No. 2) Regulations 2020;

(b)

a civil partnership is not to be treated as having come to an end by reason of its having been converted into a marriage under Part 3 or 4 of the Marriage of Same Sex Couples (Conversion of Civil Partnership) Regulations 2014 where it is a convertible Northern Ireland civil partnership as defined by regulation 2 of those Regulations.

(3)

For the purposes of this paragraph, a marriage is not to be treated as having come to an end by reason of its having been converted into a civil partnership under Part 3, 4 or 5 of the Marriage and Civil Partnership (Northern Ireland) (No. 2) Regulations 2020.

5 (1)

If neither of paragraphs 2 and 3 apply to the woman but she subsequently comes within paragraph (a) or (b) of paragraph 2(1)—

(a)

her transitional rate is to be recalculated applying paragraph 2(2), and

(b)

Schedule 2 (up-rating) applies as if the recalculated rate had been the woman's transitional rate on the day on which she reached pensionable age.

(2)

But the woman's rate is not to be recalculated under sub-paragraph (1) if it has already been recalculated under paragraph 4.

6

Nothing in paragraph 4 or 5 affects—

(a)

the amount of state pension to which a woman is entitled for periods before that paragraph applies to her, or

(b)

the amount of any increase under section 17 in a case where the period for which the woman's state pension is deferred has ended before that paragraph applies to her.

SCHEDULE 7Reduced rate elections: basic amount of state pension under section 12

Section 12

1

This Schedule—

(a)

sets out the circumstances in which a woman is entitled to a basic amount for the purpose of section 12, and

(b)

determines that basic amount.

2 (1)

A woman is entitled to a basic amount under this paragraph if she has reached pensionable age and—

(a)

she is married to a person who has reached pensionable age, or

(b)

she is in a civil partnership with a person who has reached that age.

(2)

The basic amount is the amount specified in paragraph 5 of Part 1 of Schedule 4 to the Contributions and Benefits Act on the day on which the woman became entitled under this paragraph.

3 (1)

A woman is entitled to a basic amount under this paragraph if—

(a)

on reaching pensionable age she is not married or in a civil partnership but she has been married or in a civil partnership before, or

(b)

on reaching pensionable age she was married or in a civil partnership and the marriage or civil partnership has come to an end (because of the death of her spouse or civil partner or otherwise).

(2)

The basic amount is the amount of the basic pension specified in section 44(4) of the Contributions and Benefits Act on the day on which the woman became entitled under this paragraph.

4

A woman who is entitled to a basic amount under paragraph 3 is not entitled to a basic amount under paragraph 2.

SCHEDULE 8Pension sharing: appropriate weekly rate under section 13

Section 13

Introduction

1

This Schedule sets out the appropriate weekly rate of a person's state pension under section 13.

Appropriate weekly rate for pensioner with old state scheme pension credit

2 (1)

This paragraph sets out the appropriate weekly rate if the person is entitled to a state pension under section 13 because of an old state scheme pension credit.

(2)

If the person became entitled to the old state scheme pension credit in or after the final relevant year, the appropriate weekly rate is a weekly rate equal to the person's notional rate.

(3)

If the person became entitled to the old state scheme pension credit before the final relevant year, the appropriate weekly rate is a weekly rate equal to the person's notional rate multiplied by the appropriate revaluation percentage.

(4)

For the purposes of sub-paragraphs (2) and (3), a person's “notional rate” is the weekly rate of a notional pension under section 13 the cash equivalent of which would, on the valuation day, have been equal to the amount of the old state scheme pension credit.

(5)

For the purposes of sub-paragraph (4) assume that the notional pension becomes payable on the later of—

(a)

the day on which the person reaches pensionable age, and

(b)

the valuation day.

(6)

The “appropriate revaluation percentage” is the percentage specified, in relation to earnings factors for the tax year in which the person became entitled to the old state scheme pension credit, by the last order under section 148 of the Administration Act to come into force before the end of the final relevant year.

(7)

In this paragraph—

“final relevant year” means the tax year immediately before that in which the person reaches pensionable age;

“valuation day” means the day on which the person became entitled to the old state scheme pension credit.

Appropriate weekly rate for pensioner with new state scheme pension credit

3 (1)

This paragraph sets out the appropriate weekly rate if the person is entitled to a state pension under section 13 because of a new state scheme pension credit.

(2)

If the person was over pensionable age when he or she became entitled to the new state scheme pension credit, the appropriate weekly rate is a weekly rate equal to the amount of the credit.

(3)

If the person was under pensionable age when he or she became entitled to the new state scheme pension credit, the appropriate weekly rate is a weekly rate equal to the amount of the credit multiplied by the appropriate revaluation percentage.

(4)

The “appropriate revaluation percentage” is the percentage specified, in relation to the tax year in which the person became entitled to the new state scheme pension credit, by the last order under section 148AD of the Administration Act to come into force before the person reached pensionable age.

Supplementary

4 (1)

Regulations may make provision about the calculation and verification of notional rates under paragraph 2.

(2)

The regulations may, in particular, provide—

(a)

for calculation or verification in such manner as may be approved by or on behalf of the Government Actuary, or

(b)

for things done under the regulations to be required to be done in accordance with guidance from time to time prepared by a person specified in the regulations.

SCHEDULE 9Pension sharing: up-rating state pension under section 13

Section 13

Introduction

1

This Schedule sets out how to up-rate the rate of a person's state pension under section 13.

2

In this Schedule a reference to the rate of a person's state pension is to the rate—

(a)

ignoring any reduction under section 7(4) (in the case of a state pension under section 7),

(b)

taking into account any reduction under section 14 (in the case of a state pension under section 4), and

(c)

ignoring any increase under section 17.

3 (1)

In this Schedule “the total amount of any state pension that has priority”, in relation to a person's state pension under section 13, means the sum of—

(a)

the rate of any state pension to which the person is entitled under section 2, 4 or 12,

(b)

the rate of any state pension to which the person is entitled under section 7, F3...

F4(ba)

the rate of any state pension to which the person is entitled under regulations made under section 10 which make provision corresponding or similar to section 7 and Schedules 3 and 4, and

(c)

the rate of any earlier state pension to which the person is entitled under section 13 (see sub-paragraph (2)).

(2)

Where a person is entitled to two or more state pensions under section 13 because he or she has become entitled to two or more state scheme pension credits, a pension arising because of an earlier credit is an “earlier” state pension for the purposes of sub-paragraph (1)(c).

Rate of section 13 pension, when added to any priority pension, is less than the full rate

4 (1)

The rate of the person's state pension under section 13 is to be increased under this paragraph if, when added to the total amount of any state pension that has priority, it is equal to or less than the full rate of the state pension.

(2)

If at any time the full rate is increased, the rate of the person's state pension under section 13 is increased (at that time) by the same percentage as the increase in the full rate.

Rate of section 13 pension, when added to any priority pension, straddles the full rate

5 (1)

The rate of the person's state pension under section 13 is to be increased under this paragraph if—

(a)

the total amount of any state pension that has priority is less than the full rate of the state pension, but

(b)

the rate of the state pension under section 13, when added to the total amount of any state pension that has priority, exceeds the full rate.

(2)

If at any time the full rate of the state pension is increased, the rate of the person's state pension under section 13 is increased (at that time) by an amount equal to the appropriate percentage of the shortfall immediately before that time.

(3)

If at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under section 13 is increased (at that time) by an amount equal to the appropriate percentage of the excess immediately before the order comes into force.

(4)

In this paragraph—

“the appropriate percentage”—
1. (a)
  in sub-paragraph (2), means the percentage by which the full rate is increased;
2. (b)
  in sub-paragraph (3), means the percentage specified in the order;
“the excess” means the amount by which the rate of the state pension under section 13, when added to the total amount of any state pension that has priority, exceeds the full rate;
“the shortfall” means the amount by which the total amount of any state pension that has priority is less than the full rate.

Priority pension alone is equal to or higher than the full rate

6 (1)

The rate of the person's state pension under section 13 is to be increased under this paragraph if the total amount of any state pension that has priority is equal to or higher than the full rate of the state pension.

(2)

If at any time an order under section 151A of the Administration Act comes into force, the rate of the person's state pension under section 13 is increased (at that time) by the percentage specified in the order.

SCHEDULE 10Pension sharing: appropriate weekly reduction under section 14

Section 14

Introduction

1

This Schedule sets out the appropriate weekly reduction in the rate of a person's state pension for the purposes of section 14.

Appropriate weekly reduction for person subject to old state scheme pension debit

2 (1)

This paragraph sets out the appropriate weekly reduction if the person is subject to an old state scheme pension debit.

(2)

If the person became subject to the old state scheme pension debit in or after the final relevant year, the appropriate weekly reduction is an amount equal to the person's notional rate.

(3)

If the person became subject to the old state scheme pension debit before the final relevant year, the appropriate weekly reduction is an amount equal to the person's notional rate multiplied by the appropriate revaluation percentage.

(4)

For the purposes of sub-paragraphs (2) and (3), a person's “notional rate” is the weekly rate of a notional pension under section 4 the cash equivalent of which would, on the valuation day, have been equal to the amount of the old state scheme pension debit.

(5)

For the purposes of sub-paragraph (4) assume that the notional pension becomes payable on the later of—

(a)

the day on which the person reaches pensionable age, and

(b)

the valuation day.

(6)

The “appropriate revaluation percentage” is the percentage specified, in relation to earnings factors for the tax year in which the person became subject to the old state scheme pension debit, by the last order under section 148 of the Administration Act to come into force before the end of the final relevant year.

(7)

In this paragraph—

“final relevant year” means the tax year immediately before that in which the person reaches pensionable age;

“valuation day” means the day on which the person became subject to the old state scheme pension debit.

Appropriate weekly reduction for person subject to new state scheme pension debit

3 (1)

This paragraph sets out the appropriate weekly reduction if the person is subject to a new state scheme pension debit.

(2)

If the person was over pensionable age when he or she became subject to the new state scheme pension debit, the appropriate weekly reduction is an amount equal to the amount of the debit.

(3)

If the person was under pensionable age when he or she became subject to the new state scheme pension debit, the appropriate weekly reduction is an amount equal to the amount of the debit multiplied by the appropriate revaluation percentage.

(4)

The “appropriate revaluation percentage” is the percentage specified, in relation to the tax year in which the person became subject to the new state scheme pension debit, by the last order under section 148AD of the Administration Act to come into force before the person reached pensionable age.

Supplementary

4 (1)

Regulations may make provision about the calculation and verification of notional rates under paragraph 2.

(2)

The regulations may, in particular, provide—

(a)

for calculation or verification in such manner as may be approved by or on behalf of the Government Actuary, or

(b)

for things done under the regulations to be required to be done in accordance with guidance from time to time prepared by a person specified in the regulations.

SCHEDULE 11Pension sharing: amendments

Section 15

Family Law (Scotland) Act 1985 (c. 37)

1

In section 27 of the Family Law (Scotland) Act 1985 (interpretation), in subsection (1), in the definition of “relevant state scheme rights”—

(a)

before paragraph (a) insert—

“(za)
shareable new state scheme rights, within the meaning given by section 47(3) of the Welfare Reform and Pensions Act 1999 or corresponding Northern Ireland legislation;”;

(b)

in paragraph (b) after “55A” insert “ or 55AA ”.

Welfare Reform and Pensions Act 1999 (c. 30)

9

The Welfare Reform and Pensions Act 1999 is amended as follows.

10 (1)

Section 47 (shareable state scheme rights) is amended as follows.

(2)

After subsection (1) insert—

“(1A)
For the purposes of this Chapter, a person's shareable state scheme rights are—
(a)
the person's shareable old state scheme rights;
(b)
the person's shareable new state scheme rights.”

(3)

In subsection (2)—

(a)

after “shareable” insert “ old ”;

(b)

in paragraph (b), after “55A” insert “ or 55AA ”.

(4)

After subsection (2) insert—

“(3)
For the purposes of this Chapter, a person's shareable new state scheme rights are the person's entitlement, or prospective entitlement, to the excess amount in a state pension under section 4 of the Pensions Act 2014.
(4)
“The excess amount”, in relation to a state pension under section 4 of the Pensions Act 2014, means any amount by which the rate of the pension exceeds the full rate of the state pension (see section 3 of that Act).
(5)
In determining the rate of a state pension under section 4 of the Pensions Act 2014 for the purposes of this Chapter, ignore Schedule 6 to that Act (reduced rate elections: effect on rate of section 4 pension).”

11

In section 48 (activation of benefit sharing), in subsection (1), for the words from the beginning to “shareable state scheme rights” substitute “ Section 49 or 49A applies where any of the following has taken effect in relation to a person's shareable state scheme rights ”.

12 (1)

Section 49 (creation of state scheme pension debits and credits) is amended as follows.

(2)

For subsection (1) substitute—

“A1
This section applies if—
(a)
the transferor is in the old state pension system, or
(b)
the transferor is in the new state pension system but the transfer day was before 6 April 2016.
(1)
Where this section applies because of a relevant order or provision—
(a)
the transferor is subject, for the purposes of the relevant state pension legislation, to a debit of the appropriate amount, and
(b)
the transferee is entitled, for the purposes of the relevant state pension legislation, to a credit of that amount.”

(3)

In subsection (2), after “shareable” insert “ old ”.

(4)

In subsection (3)(b), for “relevant” substitute “ shareable old ”.

(5)

After subsection (5) insert—

“(5A)
The fact that a person who reaches pensionable age on or after 6 April 2016 is not entitled to a pension of the kind mentioned in section 47(2)(a) or (b) does not affect the calculation under this section of the appropriate amount by reference to the transferor's prospective entitlement, immediately before the transfer day, to a pension of that kind.”

(6)

In subsection (6), at the appropriate place insert—

““the relevant state pension legislation”—
(a)
in relation to a transferor or transferee in the old state pension system, means Part 2 of the Contributions and Benefits Act, and
(b)
in relation to a transferor or transferee in the new state pension system, means Part 1 of the Pensions Act 2014.”

(7)

At the end of the heading insert “ : transferor in old state pension system or pension sharing activated before 6 April 2016 ”.

13

After section 49 insert—

“49ACreation of debits and credits: transferor in new state pension system and sharing activated on or after 6 April 2016
(1)
This section applies if—
(a)
the transferor is in the new state pension system, and
(b)
the transfer day is 6 April 2016 or any later date.
(2)
Where this section applies because of a relevant order or provision—
(a)
the transferor is subject, for the purposes of section 14 of the Pensions Act 2014, to a debit of the shared weekly amount, and
(b)
the transferee is entitled, for the purposes of the relevant state pension legislation, to a credit of the shared weekly amount.
(3)
The shared weekly amount is the specified percentage of the excess amount of the transferor's state pension under section 4 of the Pensions Act 2014 as at the transfer day.
(4)
For the purposes of calculating the shared weekly amount—
(a)
a transferor who is under pensionable age on the transfer day is to be treated as having reached pensionable age and to have become entitled to the state pension under section 4 of the Pensions Act 2014 on the transfer day;
(b)
a transferor who has reached pensionable age on the transfer day but who has not yet become entitled to the state pension under section 4 of the Pensions Act 2014 is to be treated as having become entitled to the pension on that day.
(5)
In this section—
“the excess amount” has the meaning given by section 47(4);
“relevant order or provision” means the order or provision by virtue of which this section applies (see section 48);
“the relevant state pension legislation”—
(a)
in relation to a transferee in the old state pension system, means Part 2 of the Contributions and Benefits Act, and
(b)
in relation to a transferee in the new state pension system, means Part 1 of the Pensions Act 2014;
“specified percentage” means the percentage specified in the relevant order or provision for the purposes of subsection (3);
“transfer day” means the day on which the relevant order or provision takes effect;
“transferor” means the person to whose rights the relevant order or provision relates;
“transferee” means the person for whose benefit the relevant order or provision is made.”

14 (1)

Section 51 (interpretation) is amended as follows.

(2)

The current text becomes subsection (1).

(3)

In that subsection for the definition of “shareable state scheme rights” substitute—

““shareable state scheme rights”, and related expressions, have the meaning given by section 47;”.

(4)

After that subsection insert—

“(2)
For the purposes of this Chapter—
(a)
a person is in the old state pension system if the person reached pensionable age before 6 April 2016 (or would have done so if the person had lived until pensionable age), and
(b)
a person is in the new state pension system if the person reached pensionable age on or after 6 April 2016 (or will do so if the person lives until pensionable age).”

State Pension Credit Act 2002 (c. 16)

15

In section 16 of the State Pension Credit Act 2002 (meaning of “retirement pension income”), in subsection (1), for paragraph (b) substitute—

“(b)
a shared additional pension payable under—
(i)
section 55A of either of those Acts, or
(ii)
section 55AA of the Contributions and Benefits Act or any corresponding provision under the law of Northern Ireland;”.

Gender Recognition Act 2004 (c. 7)

16

In Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions), in paragraph 9(1)(a) and (3), after “section 55A” insert “ or 55AA ”.

SCHEDULE 12State pension: amendments

Section 23

Part 1Amendments to do with new state pension system

Forfeiture Act 1982 (c. 34)

1

In section 4 of the Forfeiture Act 1982 (Upper Tribunal to decide whether forfeiture rule applies to social security benefits), in the definition of “relevant enactment” in subsection (5), after the entry relating to the Pension Schemes Act 1993 insert— “ Part 1 of the Pensions Act 2014, ”.

Pensions Act 1995 (c. 26)

30

In Schedule 4 to the Pensions Act 1995 (pensionable age), in paragraph 1, for “and Part 1 of the Welfare Reform Act 2007” substitute “ , Part 1 of the Welfare Reform Act 2007 and the Pensions Act 2014 ”.

State Pension Credit Act 2002 (c. 16)

42

The State Pension Credit Act 2002 is amended as follows.

43

In section 7 (fixing of claimant's retirement provision for assessed income period), in subsection (6)(a), after “benefit under” insert “ Part 1 of the Pensions Act 2014 or ”.

44

In section 16 (meaning of “retirement pension income”), in subsection (1), before paragraph (a) insert—

“(za)
a state pension under Part 1 of the Pensions Act 2014 or under any provision in Northern Ireland which corresponds to that Part;”.

Income Tax (Earnings and Pensions) Act 2003 (c. 1)

45

In section 577 of the Income Tax (Earnings and Pensions) Act 2003 (United Kingdom social security pensions), in the definition of “state pension” in subsection (2), before paragraph (a) insert—

“(za)
any provision of Part 1 of the Pensions Act 2014 or any corresponding provision under the law of Northern Ireland,”.

Gender Recognition Act 2004 (c. 7)

46

The Gender Recognition Act 2004 is amended as follows.

47

In section 23 of that Act (power to modify statutory provisions) “enactment” includes sections 11 and 12 of, and Schedules 6 and 7 to, this Act.

48 (1)

Schedule 5 (benefits and pensions) is amended as follows.

(2)

After paragraph 6 insert—

“Pension under Part 1 of the Pensions Act 2014
6A
(1)
Any question—
(a)
whether the person is entitled to a state pension under Part 1 of the Pensions Act 2014 for any period after the certificate is issued, and
(b)
(if so) the rate at which the person is so entitled for the period,
is to be decided as if the person's gender were the acquired gender.
(2)
Accordingly, if (immediately before the certificate is issued) the person—
(a)
is a woman entitled to a state pension under Part 1 of the Pensions Act 2014, but
(b)
has not attained the age of 65,
the person ceases to be so entitled when it is issued.
(3)
And, conversely, if (immediately before the certificate is issued) the person—
(a)
is a man who has attained the age at which a woman of the same age attains pensionable age, but
(b)
has not attained the age of 65,
the person is to be treated for the purposes of Part 1 of the Pensions Act 2014 as attaining pensionable age when it is issued.
(4)
But sub-paragraph (1) does not apply if and to the extent that the decision of any question to which it refers is affected by the payment or crediting of contributions, or the crediting of earnings, in respect of a period ending before the certificate is issued.
(5)
If the person's acquired gender is the male gender, sections 11 and 12 of, and Schedules 6 and 7 to, the Pensions Act 2014 (effect of reduced rate elections) apply in relation to the person as they apply in relation to a woman (but only once the person has reached pensionable age for a man).
(6)
Paragraph 10 makes provision about deferment of state pensions under Part 1 of the Pensions Act 2014.”

(3)

In paragraph 7, in sub-paragraph (1), at the end insert “ (but this is subject to sub-paragraph (3)) ”.

(4)

In paragraph 10, in sub-paragraph (1), before paragraph (a) insert—

“(za)
a state pension under Part 1 of the Pensions Act 2014,”.

Finance (No. 2) Act 2005 (c. 22)

49

The Finance (No. 2) Act 2005 is amended as follows.

50 (1)

Section 8 (meaning of “applicable year of assessment” in section 7) is amended as follows.

(2)

In subsection (3), for “subsection (4)” substitute “ subsections (4) and (4A) ”.

(3)

After subsection (4) insert—

“(4A)
In a case where the social security pension lump sum is a lump sum under section 8 of the Pensions Act 2014 or under any corresponding provision under the law of Northern Ireland, “the first benefit payment day” for the purposes of subsection (2) is the day as from which the lump sum becomes payable.”

51

In section 9 (interpretation), in the definition of “state pension lump sum” in subsection (2), before paragraph (a) insert—

“(za)
section 8 of the Pensions Act 2014 or under any corresponding provision under the law of Northern Ireland,”.

Welfare Reform Act 2012 (c. 5)

F552

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 2Amendments to do with old state pension system

Graduated retirement benefit

53 (1)

Section 36 of the National Insurance Act 1965 (graduated retirement benefit), so far as continuing in force, is amended as follows.

(2)

In subsection (7), for “has attained pensionable age” substitute “ attained pensionable age before 6 April 2016 ”.

(3)

In subsection (8), in the definition of “retirement pension”, after “any category” insert “ under the Social Security Contributions and Benefits Act 1992 ”.

Category A retirement pensions

54

The Contributions and Benefits Act is amended as follows.

55

In section 44(1) (Category A retirement pensions), for paragraph (a) substitute—

“(a)
the person attained pensionable age before 6 April 2016,”.

56 (1)

Section 48 (use of former spouse's contributions) is amended as follows.

(2)

In subsection (1), after “person” insert “ who attained pensionable age before 6 April 2016 ”.

(3)

After subsection (2) insert—

“(2A)
Regulations under subsection (1) may not provide for contributions of a person in respect of times on or after 6 April 2016 to be treated as contributions of another person.”

Category B retirement pensions

57

The Contributions and Benefits Act is amended as follows.

58

In section 23A (contributions credits for relevant parents and carers), in subsection (1)(b), after “section 48A” insert “ or 48AA ”.

59

In section 46 (modification of section 45 for calculating additional pension in certain benefits), in subsection (2), omit “48A(4) or” (in both places).

60

For section 48A substitute—

“48ACategory B retirement pension for married person or civil partner
(1)
A married person is entitled to a Category B retirement pension by virtue of the contributions of his or her spouse if—
(a)
the person attained pensionable age before 6 April 2016, and
(b)
the spouse—
(i)
has attained pensionable age, and
(ii)
satisfies the relevant contribution condition.
(2)
But subsection (1) does not confer a right to a Category B retirement pension on—
(a)
a man whose spouse was born before 6 April 1950, or
(b)
a woman whose wife was born before 6 April 1950.
(3)
A person who is a civil partner is entitled to a Category B retirement pension by virtue of the contributions of his or her civil partner (“the contributing civil partner”) if—
(a)
the person attained pensionable age before 6 April 2016, and
(b)
the contributing civil partner—
(i)
was born on or after 6 April 1950,
(ii)
has attained pensionable age, and
(iii)
satisfies the condition in paragraph 5A of Schedule 3.
(4)
A Category B retirement pension payable under this section is payable at the weekly rate specified in paragraph 5 of Part 1 of Schedule 4.
(5)
A person ceases to be entitled to a Category B retirement pension under this section if—
(a)
the person's spouse or civil partner dies (but see sections 48B and 51), or
(b)
the person otherwise ceases to be married or in the civil partnership (but see section 48AA).
(6)
In subsection (1)(b)(ii) “the relevant contribution condition” means—
(a)
in a case where the spouse was born before 6 April 1945, the conditions in paragraph 5 of Schedule 3;
(b)
in any other case, the condition in paragraph 5A of Schedule 3.
(7)
For the purposes of any provision of this Act as it applies in relation to this section, no account is to be taken of any earnings factors of the spouse or contributing civil partner for the tax year beginning with 6 April 2016 or any later tax year.
(8)
Section 51ZA contains special rules for cases involving changes in gender.
48AACategory B retirement pension for divorcee or former civil partner
(1)
A person who has been in a marriage that has been dissolved is entitled to a Category B retirement pension by virtue of the contributions of his or her former spouse if—
(a)
the person attained pensionable age—
(i)
before 6 April 2016, and
(ii)
before the marriage was dissolved, and
(b)
the former spouse—
(i)
attained pensionable age before the marriage was dissolved, and
(ii)
satisfied the relevant contribution condition.
(2)
But subsection (1) does not confer a right to a Category B retirement pension on—
(a)
a man whose former spouse was born before 6 April 1950, or
(b)
a woman whose former wife was born before 6 April 1950.
(3)
A person who has been in a civil partnership that has been dissolved is entitled to a Category B retirement pension by virtue of the contributions of his or her former civil partner if—
(a)
the person attained pensionable age—
(i)
before 6 April 2016, and
(ii)
before the civil partnership was dissolved, and
(b)
the former civil partner—
(i)
was born on or after 6 April 1950,
(ii)
attained pensionable age before the civil partnership was dissolved, and
(iii)
satisfied the condition in paragraph 5A of Schedule 3.
(4)
During any period when the person's former spouse or civil partner is alive, a Category B retirement pension payable under this section is payable at the weekly rate specified in paragraph 5 of Part 1 of Schedule 4.
(5)
During any period after the person's former spouse or civil partner is dead, a Category B retirement pension payable under this section is payable at the weekly rate of the basic pension specified in section 44(4).
(6)
In subsection (1)(b)(ii) “the relevant contribution condition” means—
(a)
in a case where the former spouse was born before 6 April 1945, the conditions in paragraph 5 of Schedule 3;
(b)
in any other case, the condition in paragraph 5A of Schedule 3.
(7)
For the purposes of any provision of this Act as it applies in relation to this section, no account is to be taken of any earnings factors of the former spouse or civil partner for the tax year beginning with 6 April 2016 or any later tax year.
(8)
A voidable marriage or civil partnership which has been annulled is to be treated for the purposes of this section as if it had been a valid marriage or civil partnership which was dissolved at the date of annulment.
(9)
Section 51ZA contains special rules for cases involving changes in gender.”

61 (1)

Section 48B (Category B retirement pension for widows and widowers) is amended as follows.

(2)

For subsections (1) to (1A) substitute—

“(1)
A person (“the pensioner”) whose spouse died while they were married is entitled to a Category B retirement pension by virtue of the contributions of his or her spouse if—
(a)
the pensioner attained pensionable age—
(i)
before 6 April 2016, and
(ii)
before the spouse died, and
(b)
the spouse satisfied the relevant contribution condition.
(1ZA)
But subsection (1) does not confer a right to a Category B retirement pension on—
(a)
a man who attained pensionable age before 6 April 2010, or
(b)
a woman who attained pensionable age before 6 April 2010 and whose spouse was a woman.
(1ZB)
In subsection (1)(b) “the relevant contribution condition” means—
(a)
in a case where the spouse—
(i)
died before 6 April 2010, or
(ii)
died on or after that date having attained pensionable age before that date,
the conditions in paragraph 5 of Schedule 3, and
(b)
in any other case, the condition in paragraph 5A of Schedule 3.
(1A)
A person (“the pensioner”) whose civil partner died while they were civil partners of each other is entitled to a Category B retirement pension by virtue of the contributions of his or her civil partner if—
(a)
the pensioner attained pensionable age—
(i)
on or after 6 April 2010 but before 6 April 2016, and
(ii)
before the civil partner died, and
(b)
the civil partner satisfied the relevant contribution condition.
(1B)
In subsection (1A)(b) “the relevant contribution condition” means—
(a)
in a case where the deceased civil partner attained pensionable age before 6 April 2010, the conditions in paragraph 5 of Schedule 3, and
(b)
in any other case, the condition in paragraph 5A of Schedule 3.”

(3)

After subsection (3) insert—

“(3A)
For the purposes of any provision of this Act as it applies in relation to this section, no account is to be taken of any earnings factors of the deceased for the tax year beginning with 6 April 2016 or any later tax year.”

(4)

For subsection (4) substitute—

“(4)
A woman (“the pensioner”) whose husband died before she attained pensionable age is entitled to a Category B retirement pension by virtue of the contributions of her husband if—
(a)
she attained pensionable age before 6 April 2016, and
(b)
the condition in subsection (5) is satisfied.
(4A)
A man (“the pensioner”) whose wife died before he attained pensionable age is entitled to a Category B retirement pension by virtue of the contributions of his wife if—
(a)
he attained pensionable age on or after 6 April 2010 but before 6 April 2016, and
(b)
the condition in subsection (5) would have been satisfied on the assumption mentioned in subsection (7).”

(5)

In subsection (6), after “subsection (4)” insert “ or (4A) ”.

(6)

In subsection (7), for “(4)” substitute “ (4A) ”.

(7)

After subsection (8) insert—

“(9)
Section 51ZA contains special rules for cases involving changes in gender.”

62 (1)

Section 48BB (Category B retirement pension: entitlement by reference to widowed parent's allowance or bereavement allowance where no dependent children) is amended as follows.

(2)

In subsection (1), for “who has attained pensionable age” substitute “ who attained pensionable age before 6 April 2016 ”.

(3)

In subsection (3), for “who has attained pensionable age” substitute “ who attained pensionable age before 6 April 2016 ”.

63 (1)

Section 48C (Category B retirement pension: general) is amended as follows.

(2)

In subsection (3), for “sections 48A(4)(b) and” substitute “ section ”.

(3)

In subsection (4), omit “48A(4),”.

64

For section 51 substitute—

“51Category B retirement pension for widows, widowers and surviving civil partners who attained pensionable age before 6 April 2010
(1)
A person (“the pensioner”) whose spouse died while they were married is entitled to a Category B retirement pension if—
(a)
they were both over pensionable age at the time of the death,
(b)
the pensioner attained pensionable age before 6 April 2010, and
(c)
the spouse satisfied the relevant contribution condition.
(2)
But subsection (1) does not confer a right to a Category B retirement pension on—
(a)
a woman whose husband has died, or
(b)
a man whose wife died before 6 April 1979.
(3)
In subsection (1)(c) “the relevant contribution condition” means—
(a)
in a case where the spouse attained pensionable age before 6 April 2010, the conditions in paragraph 5 of Schedule 3, and
(b)
in a case where the spouse attained pensionable age on or after 6 April 2010, the condition in paragraph 5A of Schedule 3.
(4)
A person (“the pensioner”) whose civil partner died while they were civil partners of each other is entitled to a Category B retirement pension if—
(a)
they were both over pensionable age at the time of the death,
(b)
the pensioner attained pensionable age before 6 April 2010, and
(c)
the deceased civil partner satisfied the relevant contribution condition.
(5)
In subsection (4)(c) “the relevant contribution condition” means—
(a)
in a case where the deceased civil partner attained pensionable age before 6 April 2010, the conditions in paragraph 5 of Schedule 3, and
(b)
in a case where the deceased civil partner attained pensionable age on or after 6 April 2010, the condition in paragraph 5A of Schedule 3.
(6)
The weekly rate of a person's Category B retirement pension under this section is to be determined in accordance with sections 44 to 45AA and Schedule 4A as they apply in the case of a Category A retirement pension taking references in those sections to the pensioner as references to the spouse or deceased civil partner.
(7)
But in the case of—
(a)
a man whose wife dies after 5 October 2002,
(b)
a surviving party to a marriage of a same sex couple, or
(c)
a surviving civil partner,
any amount of additional pension falling to be calculated under subsection (6) is to be halved.
(8)
For the purposes of any provision of this Act as it applies in relation to this section, no account is to be taken of any earnings factors of the spouse or deceased civil partner for the tax year beginning with 6 April 2016 or any later tax year.
(9)
Subject to the provisions of this Act, a person becomes entitled to a Category B retirement pension under this section on the day on which the conditions of entitlement become satisfied and the entitlement continues throughout the person's life.
(10)
Section 51ZA contains special rules for cases involving changes in gender.”

65

After section 51 insert—

“51ZASpecial provision for married person whose spouse changed gender
(1)
Section 48A(2)(b) does not prevent a woman from being entitled to a Category B retirement pension under that section in a case where—
(a)
her spouse is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and
(b)
the marriage subsisted before the time when that certificate was issued.
(2)
Section 48AA(2)(b) does not prevent a woman from being entitled to a Category B retirement pension under that section in a case where—
(a)
her former spouse was, at the time the marriage was dissolved, a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and
(b)
the marriage subsisted before the time when that certificate was issued.
(3)
Section 48B(1ZA)(b) does not prevent a woman from being entitled to a Category B retirement pension under that section in a case where—
(a)
her dead spouse was, at the time of death, a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and
(b)
the marriage subsisted before the time when that certificate was issued,
and in such a case the reference in section 48B(1ZB)(a)(ii) to the spouse having attained pensionable age before 6 April 2010 is to be read as a reference to the spouse having been born before 6 April 1945.
(4)
Section 51(1) does not confer a right to a Category B retirement pension on a woman if—
(a)
her dead spouse was, at the time of death, a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and
(b)
the marriage subsisted before the time when that certificate was issued.”

66

In section 52(3) (special provision for surviving spouses) for “prescribed maximum” substitute “ maximum amount specified in regulations ”.

67 (1)

Schedule 3 (contribution conditions for entitlement to benefit) is amended as follows.

(2)

In paragraph 5, for sub-paragraph (1) substitute—

“(1)
This paragraph sets out the contribution conditions for—
(a)
a widowed mother's allowance, a widowed parent's allowance or a widow's pension;
(b)
a Category A retirement pension (other than one in relation to which paragraph 5A applies);
(c)
a Category B retirement pension in the cases provided for by any of sections 48A to 51ZA.”

(3)

In paragraph 5A(1), for paragraphs (b) and (c) substitute—

“(b)
a Category B retirement pension in the cases provided for by any of sections 48A to 51ZA.”

68

In Part 1 of Schedule 4 (rates of certain benefits), in paragraph 5, for “section 48A(3)” substitute “ section 48A(4) or 48AA(4) ”.

69

In Schedule 4A (additional pension: accrual rates for purposes of section 45(2)(c)), in paragraph 1(2), omit “, 48A(4)” (in both places).

70

In section 150 of the Administration Act (annual up-rating of benefits), in subsection (1), after paragraph (ab) insert—

“(ac)
specified in regulations under section 52(3) of that Act;”.

71

In section 46 of the Pension Schemes Act 1993 (effect of entitlement to guaranteed minimum pensions on payment of social security benefits), in subsection (6)(b)(iii), omit “48A,”.

72

In section 128 of the Pensions Act 1995 (additional pension: calculation of surpluses), in subsection (6), omit “48A,”.

73

In Schedule 4 to the Pensions Act 1995 (equalisation of, and increase in, pensionable age for men and women), omit paragraph 3(2) and (3).

74

In section 577 of the Income Tax (Earnings and Pensions) Act 2003 (United Kingdom social security pensions), in the definition of “state pension” in subsection (2)—

(a)

in paragraph (a), after “48A,” insert “ 48AA, ”;

(b)

in paragraph (b), after “1992” insert “ or any provision under the law of Northern Ireland that corresponds to section 48AA of SSCBA 1992 ”.

75

In Schedule 24 to the Civil Partnership Act 2004, omit paragraphs 25(6) and 28(6).

76

In Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions), in paragraph 8(1)(a) and (3), after “48A,” insert “ 48AA, ”.

77

In Schedule 4 to the Marriage (Same Sex Couples) Act 2013, omit paragraphs 11, 12, 13 and 16.

Category C retirement pensions: repeal of spent provisions

78

The Contributions and Benefits Act is amended as follows.

79

In section 63(f)(i) (descriptions of non-contributory benefits), for the words from “payable” to “widows” substitute “ payable in certain cases to a widow whose husband was over pensionable age on 5 July 1948 or to a woman whose marriage to a husband who was over pensionable age on that date was terminated otherwise than by his death ”.

80 (1)

Section 78 (Category C retirement pensions etc) is amended as follows.

(2)

Omit subsections (1), (2) and (5).

(3)

In subsections (7) and (8), omit “Category C or”.

81

In Part 3 of Schedule 4 —

(a)

omit paragraph 6 (rate of Category C retirement pension);

(b)

in paragraph 7 (rate of Category D retirement pension), for the text in the second column substitute the amount specified in paragraph 6 as the higher rate for a Category C retirement pension immediately before 6 April 2016.

82

In section 150A of the Administration Act (annual up-rating), in subsection (10), in the definition of “the specified amounts in the case of Category B, C or D retirement pensions”—

(a)

in paragraph (a), omit the final “and”;

(b)

in paragraph (b), for “amounts specified in paragraphs 6 and 7” substitute “ amount specified in paragraph 7 ”;

(c)

at the end of paragraph (b) insert“, and

(c)
any amount specified in regulations under section 78(9) of the Contributions and Benefits Act for a Category C retirement pension;”.

83

In Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions) omit paragraph 11 and the heading above it.

Category D retirement pensions

84

In section 78(3) of the Contributions and Benefits Act (entitlement to a Category D retirement pension), for “and satisfies” substitute “ , who reached pensionable age before 6 April 2016 and who satisfies ”.

Age addition

85

In sections 63(g) and 79(1) of the Contributions and Benefits Act (age addition), after “retirement pension of any category” insert “ under this Act ”.

Christmas bonus

86

In section 150(2) of the Contributions and Benefits Act (Christmas bonus: interpretation), for the definition of “retirement pension” substitute—

““retirement pension” means—
(a)
a state pension under Part 1 of the Pensions Act 2014,
(b)
a retirement pension under this Act, or
(c)
graduated retirement benefit.”

Transition: same sex marriages

87 (1)

If marriage of same sex couples is not lawful under the law of Scotland when the amendments made by this Part of this Schedule come into force then, under the law of Scotland, references in the amendments to a married person do not include a person married to someone of the same sex; and related expressions (such as “spouse”) are to be read accordingly.

(2)

See also Part 1 of Schedule 2 to the Marriage (Same Sex Couples) Act 2013 (power to provide for English and Welsh marriages of same sex couples to be treated in Scotland as civil partnerships).

Part 3Amendments to do with state pension credit

88

The State Pension Credit Act 2002 is amended as follows.

89

In section 3 (savings credit), for subsection (1) substitute—

“(1)
The first of the conditions mentioned in section 1(2)(c)(ii) is that the claimant—
(a)
has attained pensionable age before 6 April 2016 and has attained the age of 65 (before, on or after that date), or
(b)
is a member of a couple, the other member of which falls within paragraph (a).”

90

After that section insert—

“3ZAPower to limit savings credit for certain mixed-age couples
(1)
Regulations may provide that, in prescribed cases, a person who is a member of a mixed-age couple is not entitled to a savings credit.
(2)
For example, the regulations could provide that a member of a mixed-age couple is not entitled to a savings credit unless—
(a)
the person has been awarded a savings credit with effect from a day before 6 April 2016 and was entitled to a savings credit immediately before that date, and
(b)
the person remained entitled to state pension credit at all times since the beginning of 6 April 2016.
(3)
In this section “mixed-age couple” means a couple (whenever formed) one member of which had attained pensionable age before 6 April 2016 and the other had not.”

91

In Schedule 1 to the Pensions Act 2007, omit paragraph 44.

Part 4Other amendments to do with Part 1

Pension Schemes Act 1993 (c. 48)

95

Section 46A of the Pension Schemes Act 1993 (retirement in tax year after 5 April 2020) is repealed.

Pensions Act 2008 (c. 30)

96

In the Pensions Act 2008, the following are repealed—

(a)

sections 102 and 103 (consolidation of additional pension);

(b)

Schedule 3 (consolidation of additional pension);

(c)

in Schedule 4 (minor and consequential amendments)—

paragraph 4(2)(b) and (3)(b);
paragraph 6(3);
paragraph 7(a);
paragraph 8(a);
paragraph 9(2)(c);
paragraph 10;
paragraphs 13 to 22.

Pensions Act 2011 (c. 19)

97

In the Pensions Act 2011, the following are repealed—

(a)

section 2(5) to (9) and Schedule 2 (abolition of certain additions to the state pension);

(b)

section 3 and Schedule 3 (consolidation of additional pension).

SCHEDULE 13Abolition of contracting-out for salary related schemes

Section 24

Part 1Pension Schemes Act 1993: amendments

1

The Pension Schemes Act 1993 is amended as follows.

2

For “the abolition date” (in each place) substitute “ the first abolition date ”.

3

In the heading for Part 3 of the Act—

(a)

for “Certification of pension schemes” substitute “ Schemes that were contracted-out etc ”;

(b)

omit “and duties”.

4

For the heading to Chapter 1 of Part 3 substitute “ Schemes that were contracted-out: guaranteed minimum pensions and alteration of scheme rules etc ”.

5

Section 7 (issue of contracting-out certificates) is repealed (and accordingly, any certificates in force under that section immediately before this paragraph comes into force cease to have effect).

6

After section 7 insert—

“7AMeaning of “the first abolition date” and “the second abolition date”
In this Act—
“the first abolition date” means 6 April 2012 (the date appointed for the commencement of section 15(1) of the Pensions Act 2007 (abolition of contracting-out for defined contribution pension schemes));
“the second abolition date” means 6 April 2016 (the date on which section 56(4) of the Pensions Act 2014 provides for the commencement of section 24(1) of that Act (abolition of contracting-out for salary related schemes)).
7BMeaning of “contracted-out scheme” and “appropriate scheme” etc.
(1)
This section applies for the interpretation of this Act.
(2)
An occupational pension scheme was “contracted-out” at a time if, at that time, there was in force a certificate under section 7 (as it then had effect) stating that the employment of an earner in employed earner's employment was contracted-out employment by reference to the scheme.
(3)
“Contracting-out certificate” means a certificate of the kind mentioned in subsection (2).
(4)
An occupational pension scheme was a “salary related contracted-out scheme” at a time if, at that time, the scheme was contracted-out by virtue of satisfying section 9(2) (as it then had effect).
(5)
An occupational pension scheme was a “money purchase contracted-out scheme” at a time if, at that time, the scheme was contracted-out by virtue of satisfying section 9(3) (as it then had effect).
(6)
A personal pension scheme was an “appropriate scheme” at a time if, at that time, there was in force a certificate issued under section 7(1)(b) (as it then had effect) stating that the scheme was an appropriate scheme.
(7)
“Appropriate scheme certificate” means a certificate of the kind mentioned in subsection (6).
(8)
An appropriate scheme certificate that was in force in relation to a scheme is to be taken as conclusive that the scheme was, at that time, an appropriate scheme.”

7 (1)

Section 8 (meaning of “contracted-out employment”, “guaranteed minimum pension” and “minimum payment”) is amended as follows.

(2)

For subsection (1) substitute—

“(1)
In relation to any period before the second abolition date, the employment of an earner in employed earner's employment was “contracted-out employment” in relation to the earner during that period if—
(a)
the earner was under pensionable age;
(b)
the earner's service in the employment was service which qualified the earner for a pension provided by a salary related contracted-out scheme; and
(c)
there was in force a contracting-out certificate issued in accordance with this Chapter (as it then had effect) stating that the employment was contracted-out employment by reference to the scheme.”

(3)

After subsection (1A) insert—

“(1B)
In the following provisions of this Act “earner”, in relation to a scheme, means a person who was an earner in contracted-out employment by reference to the scheme.”

(4)

In subsection (2), in the definition of “guaranteed minimum pension”, for “by an occupational pension scheme” substitute “ , by a scheme that was a salary related contracted-out scheme, ”.

(5)

For subsection (4) substitute—

“(4)
A contracting-out certificate that was in force in respect of an employed earner's employment is to be taken as conclusive that the employment was, at that time, contracted-out employment.”

8

The italic heading above section 9 is repealed.

9

Sections 9 and 11 (requirements for certification of schemes: general) are repealed.

10

The italic heading above section 12A is repealed.

11

Sections 12A to 12D (requirements for certification applying to employment from 6 April 1997) are repealed.

12

For the italic heading above section 13 substitute “ Guaranteed minimum pensions ”.

13 (1)

Before section 13 insert—

“12EFormer salary related contracted-out schemes to comply with GMP requirements
(1)
A scheme that was a salary related contracted-out scheme is to be treated as including whatever provision it needs to contain to comply with the GMP requirements.
(2)
A scheme complies with the GMP requirements if, in relation to any earner's service before the principal appointed day, it complies in all respects with sections 13 to 24E.
(3)
Where—
(a)
a scheme is permitted by any of those sections to include provision subject to certain requirements, and
(b)
the scheme includes the provision but not the requirements,
the scheme is to be treated by subsection (1) as including the requirements.
(4)
This section overrides any provision of a scheme to the extent that the provision of the scheme conflicts with it.”

(2)

For the purposes of section 12E it does not matter whether the scheme ceased to be contracted-out when the amendment made by paragraph 5 of this Schedule came into force or before that time.

(3)

But section 12E does not treat a scheme as having included any provision before this paragraph comes into force.

14

In section 13 (minimum pensions for earners), in subsection (2)—

(a)

for “is a married woman or widow who is liable” substitute “ was a married woman or widow who was liable ”;

(b)

after “Act 1992” insert “ at a time during a relevant year when she was in contracted-out employment by reference to the scheme ”;

(c)

at the end of that subsection insert—

““Relevant year” has the meaning given by section 14(8).”

15 (1)

Section 14 (earner's guaranteed minimum) is amended as follows.

(2)

For subsection (1) substitute—

“(1)
An earner has a guaranteed minimum in relation to the pension provided by a scheme that was a salary related contracted-out scheme if in any tax week in a relevant year—
(a)
earnings were paid to or for the earner's benefit in respect of employment which was contracted-out by reference to the scheme; and
(b)
those earnings were in excess of the lower earnings limit for that tax week (or the prescribed equivalent if the earner was paid otherwise than weekly).”

(3)

In subsection (2), for “earnings such as are mentioned in subsection (1)” substitute “ excess earnings mentioned in subsection (1)(b) ”.

16

In section 16 (revaluation of earnings factors for the purposes of section 14: early leavers etc), for subsection (2) substitute—

“(2)
The scheme may provide that in a case where—
(a)
an earner was, before the second abolition date, in contracted-out employment by reference to a scheme, and
(b)
the earner ceases to be in pensionable service under the scheme before the final relevant year,
the earnings factors for that person shall be determined for the purposes of section 14(2) by reference to the last such order to come into force before the end of the tax year in which the earner ceases to be in pensionable service under the scheme (“the last service tax year”).”

17 (1)

Section 17 (minimum pensions for widows, widowers and surviving civil partners) is amended as follows.

(2)

In subsection (4A), after paragraph (a) insert—

“(aa)
for life, in a case where—
(i)
the widow, widower or surviving civil partner attained state pension age on or after the second abolition date, and
(ii)
the earner died on or after the date on which the widow, widower or surviving civil partner attained state pension age;
(ab)
for any period after the widow, widower or surviving civil partner has attained state pension age, in a case where—
(i)
the earner died before the widow, widower or surviving civil partner attained state pension age,
(ii)
the widow, widower or surviving civil partner did not marry or form a civil partnership after the death and before attaining state pension age, and
(iii)
the widow, widower or surviving civil partner attained state pension age on or after the second abolition date;”.

(3)

After subsection (9) insert—

“(9A)
For the purposes of subsection (4A)(aa) and (ab) a person attains state pension age when he or she attains pensionable age within the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995.”

18

In section 20 (transfer of accrued rights), in subsection (1)(a)—

(a)

in sub-paragraph (i), after “under a” insert “ scheme that was a ”;

(b)

in sub-paragraph (ii)—

(i)

omit “which is not contracted-out,”;

(ii)

after “under a” insert “ scheme that was a ”.

19

In section 23 (securing of benefits), in subsection (2), omit paragraph (d).

20

In section 24A—

(a)

the existing text becomes subsection (1), and

(b)

after that subsection insert—

“(2)
The Secretary of State must give such guidance (if any) as he or she thinks appropriate about GMP conversion.”

21

In section 25 (power for HMRC to impose conditions as to investments and resources), in subsection (2), after “A” insert “ scheme that was a ”.

22

Sections 34 to 36 (cancellation, variation, surrender and refusal of certificates) are repealed.

23

In the italic heading above section 37, for “scheme rules after certification” substitute “ rules by former salary related contracted-out schemes ”.

24

In section 37 (alteration of rules of contracted-out schemes) for subsections (1) to (3) substitute—

“(1)
Except in prescribed cases, the rules of a scheme that was a salary related contracted-out scheme cannot be altered unless the alteration is of a prescribed description.
(2)
Regulations made by virtue of subsection (1) may operate so as to validate with retrospective effect any alteration of the rules which would otherwise be void under this section.
(3)
Subsection (1) does not apply to a scheme if no person is entitled to receive, or has accrued rights to, any benefits under the scheme attributable to a period when the scheme was contracted-out.”

25

After section 37 insert—

“37ATransfer of liabilities etc: schemes contracted-out on or after 6 April 1997
(1)
Regulations may prohibit or restrict—
(a)
the transfer of any liability—
(i)
for the payment of pensions under a relevant scheme, or
(ii)
in respect of accrued rights to such pensions,
(b)
the discharge of any liability to provide pensions under a relevant scheme, or
(c)
the payment of a lump sum instead of a pension payable under a relevant scheme,
except in prescribed circumstances or on prescribed conditions.
(2)
In this section “relevant scheme” means a scheme that was a salary related contracted-out scheme by virtue of section 9(2B) and references to pensions and accrued rights under the scheme are to such pensions and rights so far as attributable to an earner's service on or after the principal appointed day (including, in a case where there has been a transfer payment, any pensions or rights deriving (directly or indirectly) from—
(a)
an earner's service on or after the principal appointed day in employment that was contracted-out employment by reference to another scheme, or
(b)
in a case where the transfer payment was made before the first abolition date, protected rights under another occupational pension scheme or under a personal pension scheme which derive from payments or contributions in respect of employment on or after the principal appointed day).
(3)
Regulations under subsection (1) may provide that any provision of this Part shall have effect subject to such modifications as may be specified in the regulations.”

26

For the heading to Chapter 2 of Part 3 substitute “ Reduction in social security benefits for members of schemes that were contracted-out ”.

27

In section 40 (scope of Chapter 2)—

(a)

omit paragraph (a);

(b)

in paragraph (c) for “such schemes” substitute “ schemes that were contracted-out pension schemes ”.

28

The italic heading above section 41 is repealed.

29

Section 41 (reduced rates of Class 1 contributions) is repealed.

30 (1)

Section 42 (review and alteration of reduced rates of Class 1 contributions) is repealed.

(2)

There is no duty, before the repeal of section 42 comes into force, to lay before Parliament any reports under that section.

31

In section 48A (additional pension and other benefits), in subsection (1), for the words from the beginning to the end of paragraph (b) substitute“In relation to—

(a)
any tax week falling before the first abolition date where the amount of a Class 1 contribution attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992 in respect of the earnings paid to or for the benefit of an earner in that week was reduced under section 42A of this Act (as it then had effect),
(b)
any tax week falling before the second abolition date where the amount of a Class 1 contribution attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992 in respect of the earnings paid to or for the benefit of an earner in that week was reduced under section 41 of this Act (as it then had effect), or
(c)
any tax week falling before the first abolition date where an amount was paid under section 45(1) of this Act (as it then had effect) in respect of the earnings paid to or for the benefit of an earner,”.

32

Section 49 (women, married women and widows) is repealed.

33

Section 50 (powers of HMRC to approve arrangements for scheme ceasing to be certified) is repealed.

34

In section 51 (calculation of guaranteed minimum pensions under approved arrangements), in subsection (1)(b), for “ceases” substitute “ ceased ”.

35

For section 52 substitute—

“52Supervision of former salary related contracted-out schemes
Section 53 shall apply for the purpose of making provision for securing the continued supervision of any scheme that was a salary related contracted-out scheme, other than a public service pension scheme, if any person is entitled to receive or has accrued rights to—
(a)
a guaranteed minimum pension under the scheme, or
(b)
a pension under the scheme attributable to service on or after the principal appointed day but before the scheme ceased to be contracted-out.”

36

In section 53 (supervision: former contracted-out schemes), omit subsection (3).

37

Sections 55 to 68 (state scheme premiums) are repealed.

38

In section 87 (general protection principle), in subsection (1)(a), for sub-paragraph (i) substitute—

“(i)
the date (“the cessation date”) which is the earlier of—
(a)
the date on which an earner ceases to be in pensionable service under a scheme that was, before the second abolition date, a salary related contracted-out scheme; and
(b)
the date on which the earner attains pensionable age;”.

39

In section 96 (further provisions concerning exercise of option to take cash equivalent in a particular way), in subsection (2), in paragraph (a)(i) omit “which is not a contracted-out scheme”.

40

In section 109 (annual increase of guaranteed minimum pensions), in subsection (3A)(b), omit “for the purposes of Part 3 of the Pensions Act 1995”.

41

In section 171 (questions arising in proceedings), in subsection (1), omit paragraph (b) and the “or” before it.

42

In section 178 (trustees and managers of schemes), in paragraph (a)—

(a)

after “1985” insert “ or ”;

(b)

omit “or Part II of Schedule 5 to the Child Support, Pensions and Social Security Act 2000”.

43 (1)

Section 181(1) (general interpretation) is amended as follows.

(2)

In the appropriate places insert—

““the first abolition date” has the meaning given by section 7A;”

““the second abolition date” has the meaning given by section 7A;”

““the principal appointed day” means 6 April 1997 (which is the day designated as the principal appointed day for the purposes of Part 3 of the Pensions Act 1995);”

““salary related contracted-out scheme” is to be construed in accordance with section 7B;”

(3)

Omit the definition of “abolition date”.

(4)

In the definition of “appropriate scheme” and “appropriate scheme certificate”, for “section 181A” substitute “ section 7B ”.

(5)

In the definition of “contracting-out certificate”, for “section 7 and section 181A” substitute “ section 7B ”.

(6)

In the definition of “contributions equivalent premium”, for “has the meaning given in” substitute “ means a premium that was paid under ”.

(7)

In the definition of “earner” and “earnings”, after “in accordance with” insert “ section 8(1B) of this Act and ”.

(8)

In the definition of “money purchase contracted-out scheme”, for “section 181A” substitute “ section 7B ”.

44

Section 181A (interpretation of references to money purchase contracted-out schemes or appropriate schemes after first abolition date) is repealed.

45

In section 185 (consultation about other regulations), omit subsection (9).

46 (1)

Schedule 2 (certification regulations) is amended as follows.

(2)

Omit paragraphs 1 to 4.

(3)

In paragraph 5(3A), for “a contracted-out occupational pension scheme which is being wound up,” substitute “ a scheme which was a contracted-out occupational pension scheme and which was being wound up before the second abolition date ”.

(4)

Omit paragraphs 6 to 8.

47 (1)

Schedule 4 (priority in bankruptcy) is amended as follows.

(2)

In paragraph 2—

(a)

in sub-paragraph (1), after “contributions to a” insert “ Northern Ireland ”;

(b)

in sub-paragraph (5), at the appropriate place insert—

““Northern Ireland salary related contracted-out scheme” means a salary related contracted-out scheme within the meaning of the Pension Schemes (Northern Ireland) Act 1993 (and references to employment that is contracted-out by reference to a scheme are to be read accordingly);”.

(3)

In paragraph 3—

(a)

in sub-paragraph (1), after “on account of a” insert “ Northern Ireland ”;

(b)

after sub-paragraph (5) insert—

“(6)
In this paragraph “Northern Ireland contributions equivalent premium” means a contributions equivalent premium within the meaning of the Pension Schemes (Northern Ireland) Act 1993.”

(4)

Omit paragraph 4(2).

Part 2Other Acts: amendments

Pensions Act 1995 (c. 26)

58

The Pensions Act 1995 is amended as follows.

59 (1)

Section 51 (annual increase in rate of pension) is amended as follows.

(2)

For “the appointed day” (in each place) substitute “ 6 April 1997 ”.

(3)

For subsection (8) substitute—

“(8)
An occupational pension scheme is a “relevant occupational pension scheme” if—
(a)
it has not, at any time on or after 6 April 1997, been a salary related contracted-out scheme (see section 7B of the Pension Schemes Act 1993), or
(b)
it has, at any time on or after 6 April 1997, been a salary related contracted-out scheme but no person is entitled to receive, or has accrued rights to, benefits under the scheme attributable to a period on or after that day when it was such a scheme.”

60

In section 54 (sections 51 to 53: supplementary), in subsection (3), omit the definition of “the appointed day”.

61

For section 69 substitute—

“69Grounds for applying for modifications: winding up registered schemes
(1)
The Authority may, on an application made to them by the trustees of a registered pension scheme which is being wound up, make an order—
(a)
modifying the scheme for the purpose of enabling assets remaining after the liabilities of the scheme have been fully discharged to be distributed to the employer, or
(b)
authorising the trustees to modify the scheme for that purpose.
(2)
But the Authority may act under subsection (1) only if prescribed requirements in relation to the distribution are satisfied.
(3)
Regulations may make provision requiring applications under subsection (1) to meet prescribed requirements.
(4)
Regulations may provide that in prescribed circumstances this section does not apply to schemes falling within a prescribed class or description or applies to them with prescribed modifications.
(5)
In this section “registered pension scheme” means an occupational pension scheme registered under section 153 of the Finance Act 2004 (other than a public service pension scheme).”

62

In section 70 (section 69: supplementary), omit subsection (3).

63

In section 71 (effect of orders under section 69), in subsection (1)—

(a)

for “paragraph (a)” substitute “ paragraph (b) ”;

(b)

for “paragraph (b)” substitute “ paragraph (a) ”.

(64)

In section 72 (modification of public service pension schemes), in subsection (1), for “section 69(1)(b)” substitute “ section 69(1)(a) ”.

65

Sections 136(1), (3) and (5), 137(3) and (4) and 148 (amendments to do with contracting-out) are repealed.

Employment Rights Act 1996 (c. 18)

66

The Employment Rights Act 1996 is amended as follows.

67

In section 3 (note to be included in statement of initial employment particulars), omit subsection (5).

68

In section 11 (references to employment tribunals), in subsection (3), omit paragraph (a) (including the “and” at the end of it).

Employment Act 2002 (c. 22)

72

In section 15 of the Employment Act 2002 (use of information by HMRC), in subsection (2)(c), for “(certification of pension schemes etc)” substitute “ (schemes that were contracted-out etc) ”.

Pensions Act 2004 (c. 35)

73

In section 258 of the Pensions Act 2004 (pension protection on transfer of employment), in subsection (2)(c), for sub-paragraphs (i) and (ii) substitute “ complies with prescribed requirements ”.

Companies Act 2006 (c. 46)

74

The Companies Act 2006 is amended as follows.

75

In section 140 (interests to be disregarded: employer's rights of recovery under pension scheme or employee's share scheme), in subsection (2), omit “section 61 of the Pension Schemes Act 1993 or”.

76

In section 673 (interests to be disregarded in determining whether company has beneficial interest: employer's charges and other rights of recovery), in subsection (1)(b), omit sub-paragraph (i).

Pensions Act 2007 (c. 22)

77

The Pensions Act 2007 is amended as follows.

78 (1)

Section 15 (abolition of contracting-out for defined contribution pension schemes) is amended as follows.

(2)

In subsection (1), for “the abolition date” substitute “ 6 April 2012 ”.

(3)

In subsection (2), omit the definition of “the abolition date”.

(4)

In subsection (4), for “the abolition date” (in each place) substitute “ 6 April 2012 ”.

79

In section 27 (consequential provision, repeals and revocations), in subsection (6), for “the abolition date (within the meaning of section 15)” substitute “ 6 April 2012 ”.

80 (1)

Schedule 4 (abolition of contracting-out for defined contribution pension schemes) is amended as follows.

(2)

In paragraphs 61, 62(1), (2)(a) and (b)(i) and (3), 65 and 66(2) for “the abolition date” (in each place) substitute “ 6 April 2012 ”.

(3)

In paragraph 67(1) omit the definition of “the abolition date”.

Pensions Act 2008 (c. 30)

81

The Pensions Act 2008 is amended as follows.

82

For section 21 substitute—

“21Quality requirement: UK defined benefits schemes
A defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if it satisfies the test scheme standard in relation to that jobholder.”

83

In section 22 (test scheme standard), for subsection (2) substitute—

“(2)
Subject to subsection (3), the relevant members are J and all active members who are jobholders of the same employer as J.”

F6SCHEDULE 14Power to amend schemes to reflect abolition of contracting-out

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 15Option to boost old retirement pensions

Section 25

Part 1Great Britain

Welfare Reform and Pensions Act 1999 (c. 30)

14

In section 47 of the Welfare Reform and Pensions Act 1999 (shareable state scheme rights), in subsection (2)(a), omit “earnings-related”.

Part 2Northern Ireland

SCHEDULE 16Bereavement support payment: amendments

Section 31

Forfeiture Act 1982 (c. 34)

1

In section 4 of the Forfeiture Act 1982 (Upper Tribunal to decide whether forfeiture rule applies to social security benefits), in the definition of “relevant enactment” in subsection (5), after the entry relating to Part 1 of this Act (inserted by Schedule 12 to this Act) insert— “ section 30 of that Act, ”.

Income Tax (Earnings and Pensions) Act 2003 (c. 1)

46

The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.

47

In section 660 (taxable benefits: UK benefits - Table A), in the table in subsection (1), in the entry relating to bereavement allowance, omit the words “SSCBA 1992 Section 39B” (in the second column).

48

In section 677 (UK social security benefits wholly exempt from tax), in Part 1 of Table B in subsection (1), in the entry relating to bereavement payments, omit the words “SSCBA 1992 Section 36” (in the second column).

SCHEDULE 17Automatic transfer of pension benefits etc

Section 33

Part 1Automatic transfer of pension benefits

Regulations providing for transfer of cash equivalent of transferable benefits

1 (1)

The Secretary of State must make regulations with a view to ensuring that, where a qualifying member of an automatic transfer scheme has transferable benefits under another pension scheme, the cash equivalent of the transferable benefits—

(a)

is transferred to the automatic transfer scheme, and

(b)

is used to provide rights for the member under it.

(2)

In this Schedule “automatic transfer scheme” means—

(a)

a work-based pension scheme, other than a scheme of a prescribed description, which is registered under Chapter 2 of Part 4 of the Finance Act 2004 and is a money purchase scheme, or

(b)

a pension scheme of a prescribed description.

(3)

In this Schedule “qualifying member”, in relation to an automatic transfer scheme, means an active member of the scheme of a prescribed description.

(4)

For the purposes of this Schedule a person has transferable benefits under a pension scheme if—

(a)

the scheme is a transferable benefits scheme,

(b)

the person is a member of the scheme,

(c)

contributions to the scheme by, or on behalf or in respect of, the member have ceased,

(d)

the member has accrued rights to benefits under the F7scheme rules ,

(e)

all of those rights accrued on or after the prescribed date (which may be a date before the coming into force of this paragraph),

(f)

the cash equivalent of those benefits is less than the prescribed amount (but not nil), and

(g)

any other prescribed conditions are met.

(5)

In this Schedule “transferable benefits scheme” means—

(a)

a work-based pension scheme, other than a scheme of a prescribed description, which is registered under Chapter 2 of Part 4 of the Finance Act 2004 and is a money purchase scheme, or

(b)

a pension scheme of a prescribed description.

F8(6)

In sub-paragraph (4)—

(a)

the reference to “scheme rules” is to be read in accordance with section 100B of the Pension Schemes Act 1993;

(b)

“benefits” means—

(i)

money purchase benefits other than money purchase benefits of a prescribed description, or

(ii)

benefits of a prescribed description.

Automatic transfer scheme to find out whether members have transferable benefits

2 (1)

The regulations must require the trustees or managers of an automatic transfer scheme to take steps to find out whether a qualifying member of the scheme has transferable benefits under another pension scheme.

(2)

The regulations may make provision—

(a)

about when a step is to be taken (for example, within a prescribed period after a person becomes a qualifying member or at prescribed intervals);

(b)

for the steps to be taken at any particular time to relate to a particular qualifying member, or to some or all qualifying members.

Automatic transfer scheme to request transfer of cash equivalent

3 (1)

The regulations must require the trustees or managers of an automatic transfer scheme to give a transfer notice if—

(a)

they find out that a qualifying member of the scheme has transferable benefits under another pension scheme, and

(b)

any other prescribed conditions are met.

(2)

A “transfer notice” is a notice given to the trustees or managers of the other pension scheme requesting the transfer of the cash equivalent of the transferable benefits to the automatic transfer scheme.

(3)

The conditions that may be prescribed because of sub-paragraph (1)(b) include a condition that the trustees or managers must not give a transfer notice unless the qualifying member consents in accordance with the regulations.

Right to opt out of automatic transfer

4 (1)

If the regulations do not include the condition mentioned in paragraph 3(3), they must ensure that where the duty to give a transfer notice has arisen in relation to transferable benefits of a qualifying member of an automatic transfer scheme, the member can opt out of the transfer in accordance with the regulations.

(2)

The regulations must provide that, where the member does opt out—

(a)

the duty to give the transfer notice is not to be complied with, and

(b)

the cash equivalent of the member's transferable benefits is not to be transferred.

Information to be given to qualifying members of automatic transfer schemes

5 (1)

The regulations must require a prescribed person to give information to a qualifying member of an automatic transfer scheme who has transferable benefits under another scheme for the purpose of helping the member to decide whether (as applicable)—

(a)

to consent to the giving of a transfer notice in relation to the transferable benefits, or

(b)

to opt out of the transfer of the cash equivalent of the transferable benefits.

(2)

The information to be given—

(a)

must include information about the effect of the regulations, and in particular the member's power to consent or right to opt out (as applicable);

(b)

may include other information, for example information about the schemes.

Transferable benefits scheme to comply with request

6 (1)

The regulations must require the trustees or managers of a pension scheme who receive a transfer notice requesting the transfer of the cash equivalent of a person's transferable benefits to do what is needed to carry out the request.

(2)

The regulations may in particular—

(a)

require the trustees or managers of the scheme to take particular steps to carry out the request;

(b)

provide for the discharge, in prescribed circumstances, of any obligation to provide the transferable benefits.

(3)

The regulations may provide for circumstances in which the duty to carry out the request does not apply.

Automatic transfer scheme to use cash equivalent to provide rights under the scheme

7 (1)

The regulations must require the trustees or managers of an automatic transfer scheme to whom the cash equivalent of a person's transferable benefits is transferred to use the cash equivalent to provide rights for the person under the scheme.

(2)

The regulations may make provision about how that is to be done and in particular about—

(a)

the nature and value of the rights to be provided;

(b)

calculating and verifying the value of the rights to be provided.

Cash equivalents: calculation and verification

8 (1)

The regulations may provide for the manner in which cash equivalents are to be calculated and verified.

(2)

The regulations may in particular—

(a)

provide that a cash equivalent is to be increased or reduced in prescribed circumstances;

(b)

make provision about the time by reference to which a cash equivalent is to be calculated for the purposes of a provision of the regulations.

(3)

Regulations made because of sub-paragraph (2)(a) may provide for a cash equivalent to be reduced to nil.

Disclosure of information and establishment of database

9 (1)

The regulations must make provision about disclosure of information.

(2)

The regulations may in particular require a person to disclose information to another person—

(a)

for the purposes of helping a person to comply with a duty imposed on the person by the regulations, or

(b)

otherwise for the purposes of a provision of the regulations.

(3)

The regulations may require the Secretary of State or the Regulator to establish and operate a database containing information relating to people who have or had transferable benefits for the purposes of helping the trustees or managers of an automatic transfer scheme to comply with their duties under the regulations.

Compliance

10 (1)

The regulations may make provision with a view to ensuring compliance with any provision of the regulations.

(2)

For this purpose the regulations may in particular—

(a)

provide for the Regulator to issue a notice (a “compliance notice”) to a person with a view to ensuring the person's compliance with a provision of the regulations;

(b)

provide for the Regulator to issue a notice (a “third party compliance notice”) to a person with a view to ensuring another person's compliance with a provision of the regulations;

(c)

provide for the Regulator to issue a notice (a “penalty notice”) imposing a penalty on a person where the Regulator is of the opinion that the person has failed to comply with a compliance notice or third party compliance notice or has contravened a provision of the regulations;

(d)

provide for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty;

(e)

confer other functions on the Regulator.

(3)

The regulations may make provision for determining the amount, or the maximum amount, of a penalty in respect of a failure or contravention.

(4)

But the amount of a penalty imposed under the regulations in respect of a failure or contravention must not exceed—

(a)

£5,000, in the case of an individual, and

(b)

£50,000, in any other case.

Record keeping

11 (1)

The regulations may require any person—

(a)

to make records;

(b)

to preserve records for a prescribed period;

(c)

to provide records to the Regulator on request.

(2)

The regulations may provide that section 10 of the Pensions Act 1995 (civil penalties) applies to a person who fails to comply with those requirements.

Further provision about the regulations

12

The regulations may—

(a)

impose or confer other functions on the trustees or managers of an automatic transfer scheme or transferable benefits scheme;

(b)

confer a discretion on a person.

Review of limit on value of cash equivalent

13 (1)

The regulations must require the Secretary of State to review from time to time the amount for the time being prescribed under paragraph 1(4)(f).

(2)

The regulations must provide—

(a)

for the first review to be conducted no later than 5 years after the date on which regulations under this Schedule first come into force;

(b)

for subsequent reviews to be conducted no later than 5 years after the previous review.

(3)

The regulations must require the Secretary of State, in conducting a review, to have regard to—

(a)

changes in the general level of prices in Great Britain;

(b)

changes in the general level of earnings in Great Britain;

(c)

any other factors the Secretary of State considers relevant.

(4)

The regulations must authorise the Secretary of State to estimate the general level of prices or earnings for the purposes of the review in the manner the Secretary of State thinks fit.

Part 2Merger of pension accounts

14 (1)

The Secretary of State may by regulations make provision for the purposes of requiring dormant pension accounts of a qualifying member of an automatic transfer scheme to be merged into a current pension account of the member.

(2)

The regulations may not require a dormant pension account to be merged unless the accrued rights to benefits to which the account relates would be transferable benefits of the member if—

(a)

all other accrued rights to benefits of the member, and any relevant contributions, were ignored, and

(b)

any other prescribed matter were ignored.

(3)

The regulations may in particular—

(a)

make provision for determining into which current pension account (if the member has more than one) a dormant pension account is to be merged;

(b)

provide that the rules of the scheme that are to apply to a merged pension account are those that apply to the current pension account into which a dormant pension account is being merged;

(c)

require the trustees or managers of the scheme to make a transfer of assets representing the accrued rights to benefits to which a dormant pension account relates;

(d)

include provision corresponding or similar to any provision which may be made by regulations under Part 1 of this Schedule.

(4)

In this paragraph “pension account”, in relation to a member of a scheme, means an account relating to the member's accrued rights to benefits in respect of a particular period of employment; and a pension account—

(a)

is “dormant” if relevant contributions in relation to the period of employment to which the account relates have ceased; and

(b)

is “current” if such contributions have not ceased.

(5)

In this paragraph—

(a)

references to “accrued rights to benefits”, in relation to a member of a scheme, are to accrued rights to benefits under the applicable rules (within the meaning given by paragraph 1(6));

(b)

“employment” has the prescribed meaning;

(c)

“relevant contributions”, in relation to a member of a scheme, means contributions to the scheme by, or on behalf or in respect of, the member.

Part 3Interpretation etc

Interpretation etc

15 (1)

In this Schedule—

“active member”—
1. (a)
  in relation to an occupational pension scheme, has the meaning given by section 124(1) of the Pensions Act 1995, and
2. (b)
  in relation to a personal pension scheme, means a member of the scheme in respect of whom contributions are being paid into the scheme;
“automatic transfer scheme” has the meaning given by paragraph 1(2);
“managers”, in relation to a pension scheme (other than a scheme established under a trust), means the persons responsible for the management of the scheme;
“money purchase benefits” has the meaning given by section 181(1) of the Pension Schemes Act 1993;
“money purchase scheme” has the meaning given by section 181(1) of the Pension Schemes Act 1993;
“occupational pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993;
“pension scheme” means—
1. (a)
  an occupational pension scheme, or
2. (b)
  a personal pension scheme;
“personal pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993;
“prescribed” means prescribed by regulations made by the Secretary of State;
“qualifying member” has the meaning given by paragraph 1(3);
“the Regulator” means the Pensions Regulator;
“transferable benefits”, and references to a person having transferable benefits, are to be read in accordance with paragraph 1(4);
“transferable benefits scheme” has the meaning given by paragraph 1(5);
“transfer notice” means a notice given under regulations made because of paragraph 3;
“work-based pension scheme” means—
1. (a)
  an occupational pension scheme,
2. (b)
  a personal pension scheme where direct payment arrangements (within the meaning of section 111A of the Pension Schemes Act 1993) exist in respect of one or more members of the scheme who are workers, or
3. (c)
  a personal pension scheme which is or has been registered under section 2 of the Welfare Reform and Pensions Act 1999 (stakeholder pension schemes);
“worker” means a person—
1. (a)
  who is a worker for the purposes of Part 1 of the Pensions Act 2008, or
2. (b)
  to whom a provision of Part 1 of that Act applies as if the person were a worker because of a provision of Chapter 8 of that Part;
but for the purposes of paragraph (b), ignore section 92 of that Act.

(2)

The Secretary of State may by regulations make provision about when contributions to a pension scheme are to be regarded as having ceased for the purposes of paragraph 1(4)(c) or 14(4).

Crown application

16 (1)

This Schedule applies to a pension scheme managed by or on behalf of the Crown as it applies to other pension schemes.

(2)

Accordingly, references in this Schedule to a person in the person's capacity as a trustee or manager of a pension scheme include the Crown, or a person acting on behalf of the Crown, in that capacity.

(3)

This Schedule applies to persons employed by or under the Crown as it applies to persons employed by a private person.

Overriding provision

17 (1)

Regulations under this Schedule may provide that specified provisions override any provision of an automatic transfer scheme or transferable benefits scheme to the extent that it conflicts with them.

(2)

A “specified provision” is a provision of regulations under this Schedule specified in the regulations for the purposes of this paragraph.

Other provision relating to regulations under this Schedule

18 (1)

Regulations under this Schedule may amend or otherwise modify any enactment (whenever passed or made).

(2)

Regulations made because of sub-paragraph (1) may in particular amend section 175(1) of the Pension Schemes Act 1993 (levies towards certain expenditure) so as to include expenditure of the Secretary of State or the Commissioners for Her Majesty's Revenue and Customs under the regulations.

(3)

In this paragraph “enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978.

19

Before making any regulations under this Schedule, the Secretary of State must consult such persons as the Secretary of State considers appropriate.

Amendments

20 (1)

The Pension Schemes Act 1993 is amended as follows.

(2)

In section 94(2A) (right to cash equivalent)—

(a)

in paragraph (a), after sub-paragraph (vii) insert—

“(viii)
regulations made under Schedule 17 to the Pensions Act 2014;”;

(b)

in paragraph (b), after sub-paragraph (v) insert—

“(vi)
regulations made under paragraph 17 of Schedule 17 to the Pensions Act 2014;”.

(3)

In section 101AI(8) (rights to cash transfer sum and contribution refund: further provisions)—

(a)

in paragraph (a), after sub-paragraph (vii) insert—

“(viii)
regulations made under Schedule 17 to the Pensions Act 2014;”;

(b)

in paragraph (b), after sub-paragraph (v) insert—

“(vi)
regulations made under paragraph 17 of Schedule 17 to the Pensions Act 2014;”.

21

In section 256 of the Pensions Act 2004 (no indemnification for fines or civil penalties), in subsection (1)(b)—

(a)

for “or section” substitute “ , section ”;

(b)

after “2008” insert “ or paragraph 10 of Schedule 17 to the Pensions Act 2014 ”.

SCHEDULE 18Power to restrict charges or impose requirements in relation to schemes

Section 43

Power to restrict charges

1 (1)

The Secretary of State may by regulations make provision—

(a)

prohibiting administration charges which are of a specified class or description, or which exceed specified limits, from being imposed on ~~F9a member~~ F9members of a relevant scheme;

(b)

prohibiting a relevant scheme from containing provision under which administration charges which are of a specified class or description, or which exceed specified limits, will or may be imposed on ~~F10a member~~ F10members of the scheme.

“Specified” means specified in the regulations.

(2)

The regulations—

(a)

may make provision for the manner of, and criteria for, determining whether an administration charge is of a specified class or description or exceeds specified limits;

(b)

may provide for the determination to be made in accordance with guidance issued from time to time by the Secretary of State.

(3)

The regulations may impose duties on the trustees or managers of a relevant scheme or others.

(4)

The regulations may provide that a scheme is not a qualifying scheme in relation to a jobholder for the purposes of Part 1 of the Pensions Act 2008 if a provision of the regulations—

(a)

is contravened, or

(b)

is contravened in a way specified in the regulations.

(5)

In this paragraph—

“administration charge”, in relation to a member of a pension scheme, means any of the following to the extent that they may be used to meet the administrative expenses of the scheme, to pay commission or in any other way that does not result in the provision of pension benefits for or in respect of members—

(a)

any payments made to the scheme by, or on behalf or in respect of, the member,

(b)

any income or capital gain arising from the investment of such payments, or

(c)

the value of the member's rights under the scheme;

“relevant scheme” means a pension scheme of a description specified in the regulations.

Power to impose requirements relating to administration or governance

2 (1)

The Secretary of State may by regulations impose requirements relating to the administration or governance of a relevant scheme that must be satisfied in relation to the scheme.

(2)

The regulations—

(a)

may make provision for the manner of, and criteria for, determining whether a requirement is satisfied;

(b)

may provide for the determination to be made in accordance with guidance issued from time to time by the Secretary of State.

(3)

The regulations may impose duties on the trustees or managers of a relevant scheme or others.

(4)

The regulations may provide that a scheme is not a qualifying scheme in relation to a jobholder for the purposes of Part 1 of the Pensions Act 2008 if a provision of the regulations—

(a)

is contravened, or

(b)

is contravened in a way specified in the regulations.

(5)

In this paragraph “relevant scheme” means a pension scheme of a description specified in the regulations.

Compliance

3 (1)

The Secretary of State may by regulations make provision with a view to ensuring compliance with a provision of regulations under paragraph 1 or 2.

(2)

The regulations may in particular—

(a)

provide for the Regulator to issue a notice (a “compliance notice”) to a person with a view to ensuring the person's compliance with a provision of regulations under paragraph 1 or 2;

(b)

provide for the Regulator to issue a notice (a “third party compliance notice”) to a person with a view to ensuring another person's compliance with a provision of regulations under paragraph 1 or 2;

(c)

(d)

provide for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty;

(e)

confer other functions on the Regulator.

(3)

The regulations may make provision for determining the amount, or the maximum amount, of a penalty in respect of a failure or contravention.

(4)

But the amount of a penalty imposed under the regulations in respect of a failure or contravention must not exceed—

(a)

£5,000, in the case of an individual, and

(b)

£50,000, in any other case.

Interpretation

4 (1)

Expressions used in this Schedule and in Schedule 17 have the same meaning in this Schedule as in that Schedule (see paragraph 15 of that Schedule).

(2)

In this Schedule “relevant scheme” is to be construed in accordance with paragraphs 1(5) and 2(5).

F11(3)

Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 1 of the Pension Schemes Act 2021 (see section 1(2)(b) of that Act) is to be treated for the purposes of this Schedule as a separate scheme.

Crown application

5 (1)

This Schedule applies to a pension scheme managed by or on behalf of the Crown as it applies to other pension schemes.

(2)

Accordingly, a reference in this Schedule to a person in the person's capacity as a trustee or manager of a pension scheme include the Crown, or a person acting on behalf of the Crown, in that capacity.

(3)

This Schedule applies to persons employed by or under the Crown as it applies to persons employed by a private person.

Overriding provision

6 (1)

The Secretary of State may by regulations provide that specified provisions override any provision of a relevant scheme to the extent that it conflicts with them.

F12(1A)

The Secretary of State may by regulations provide that specified provisions override any term of a relevant contract to the extent that it conflicts with them.

(2)

A “specified provision” is a provision of regulations under this Schedule specified in regulations made under sub-paragraph (1) F13or (1A) .

F14(3)

“Relevant contract” means a contract between the trustees or managers of a relevant scheme and a person providing services in relation to the scheme.

Other provision relating to regulations under this Schedule

7 (1)

The Secretary of State may by regulations amend or otherwise modify any enactment (whenever passed or made) in connection with any provision made by regulations under the preceding provisions of this Schedule.

(2)

In this paragraph “enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978.

8

Before making any regulations under this Schedule, the Secretary of State must consult such persons as the Secretary of State considers appropriate.

Amendments

9 (1)

The Pension Schemes Act 1993 is amended as follows.

(2)

In section 94(2A) (right to cash equivalent)—

(a)

in paragraph (a), after sub-paragraph (viii) (inserted by Schedule 17 to this Act) insert—

“(ix)
regulations made under Schedule 18 to the Pensions Act 2014;”;

(b)

in paragraph (b), after sub-paragraph (vi) (inserted by Schedule 17 to this Act) insert—

“(vii)
regulations made under paragraph 6 of Schedule 18 to the Pensions Act 2014.”

(3)

In section 101AI(8) (rights to cash transfer sum and contribution refund: further provisions)—

(a)

in paragraph (a), after sub-paragraph (viii) (inserted by Schedule 17 to this Act) insert—

“(ix)
regulations made under Schedule 18 to the Pensions Act 2014;”;

(b)

in paragraph (b), after sub-paragraph (vi) (inserted by Schedule 17 to this Act) insert—

“(vii)
regulations made under paragraph 6 of Schedule 18 to the Pensions Act 2014.”

10

In section 256 of the Pensions Act 2004 (no indemnification for fines or civil penalties), in subsection (1)(b), after “or paragraph 10 of Schedule 17 to the Pensions Act 2014” (inserted by Schedule 17 to this Act) insert “ or paragraph 3 of Schedule 18 to that Act ”.

11 (1)

Section 16 of the Pensions Act 2008 (automatic enrolment: qualifying schemes) is amended as follows.

(2)

In subsection (3), omit paragraphs (a), (aa) and (ab).

(3)

After subsection (3) insert—

“(3A)
See also paragraphs 1(4) and 2(4) of Schedule 18 to the Pensions Act 2014, which confer power to make regulations providing for a scheme not to be a qualifying scheme in relation to a jobholder in certain circumstances.”

(4)

Omit subsections (4) and (5).

12

In consequence of the amendments made by paragraph 11, section 10 of the Pensions Act 2011 (qualifying schemes: administration charges) is repealed.

SCHEDULE 19Prohibition orders: consequential amendments

Section 46

Pensions Act 1995 (c. 26)

1

The Pensions Act 1995 is amended as follows.

2

In section 6 (removal or suspension of trustees: consequences)—

(a)

in subsections (1) and (3), after “section 3” insert “ or 3A ”;

(b)

in subsection (4), after “section 3” insert “ , 3A ”.

3

In section 7 (appointment of trustees), in subsection (1), after “section 3,” insert “ by section 3A ”.

4

In section 9 (removal and appointment of trustees: property), after “a trustee” insert “ or a trustee is removed under section 3A ”.

Pensions Act 2004 (c. 35)

5

The Pensions Act 2004 is amended as follows.

6

In section 10 (functions exercisable by the Determinations Panel), in subsection (6), after paragraph (e) insert—

“(ea)
section 3A(3) of that Act (application for waiver of prohibition);”.

7

In section 66 (register of prohibited trustees), in subsection (1), for the words from “of all” to the end substitute “(“the prohibition register”) of—

“(a)
all persons who are prohibited under section 3 of the Pensions Act 1995, and
(b)
all persons appearing to the Regulator to be prohibited under section 3A of that Act.”

8

In section 96 (Pensions Regulator's regulatory functions: standard procedure), in subsection (6), after paragraph (i) insert—

“(ia)
the power under section 3A(3) of that Act to give a notice waiving a prohibition;”.

9

In section 97 (Pensions Regulator's regulatory functions: special procedure), in subsection (5), after paragraph (j) insert—

“(ja)
the power under section 3A(3) of that Act to give a notice waiving a prohibition;”.

10 (1)

Schedule 2 (Pensions Regulator's reserved regulatory functions) is amended as follows.

(2)

After paragraph 5 insert—

“5A
The power under section 3A(3) to give a notice waiving a prohibition.”

(3)

In paragraph 9(a), after “orders)” insert “ or by section 3A ”.

SCHEDULE 20Pension Protection Fund: increased compensation cap for long service

Section 50

Part 1The new compensation cap

1

Schedule 7 to the Pensions Act 2004 (pension compensation provisions) is amended as follows.

2

In paragraph 26 (the compensation cap), for the definition of “the compensation cap” in sub-paragraph (7) substitute—

““the compensation cap” has the meaning given by paragraph 26A;”.

3

After paragraph 26 insert—

“26A
(1)
This paragraph gives the meaning of “the compensation cap” for the purposes of paragraph 26.
(2)
The amount of the compensation cap for a person depends on the person's age and length of pensionable service at the time when the person first becomes entitled to the relevant compensation.
(3)
“The compensation cap” for a person who has 20 or fewer years of pensionable service at that time is the standard amount.
(4)
“The compensation cap” for a person who has more than 20 years of pensionable service at that time is—
(a)
the standard amount, plus
(b)
for each additional year, an amount found by multiplying the standard amount by 3%.
(5)
A person has an “additional year” for each whole year of pensionable service that exceeds 20 years of pensionable service.
(6)
If the total amount calculated under sub-paragraph (4)(b) would exceed the standard amount, it is to be treated as being equal to the standard amount.
(7)
In sub-paragraphs (3) and (4) “the standard amount”—
(a)
for a person who is 65 years old at the relevant time, means the amount specified by the Secretary of State by order, and
(b)
for a person of any other age at the relevant time, means the amount specified under paragraph (a) as adjusted in accordance with actuarial adjustment factors published by the Board.
(8)
A person credited with a length of notional pensionable service because of pension credit rights is to be treated for the purposes of this paragraph as having pensionable service of that length (in addition to any pensionable service that the person is treated as having under sub-paragraph (9)).
(9)
In any case where the Board is satisfied that, under the admissible rules, a person is entitled to benefits that are not attributable to a particular period of pensionable service, the Board may for the purposes of this paragraph treat the person as having a length of pensionable service to reflect those benefits (which is in addition to any other pensionable service that the person has).
(10)
In any case where the Board is satisfied that it is not possible to identify the length of some or all of a person's pensionable service under the admissible rules, the Board may, having regard to those rules, determine its length for the purposes of this paragraph.
(11)
Where a person becomes entitled to relevant compensation in respect of benefits under two or more connected occupational pension schemes at the same time, this paragraph applies in relation to the relevant compensation in respect of each benefit as if—
(a)
a reference to the length of the person's pensionable service were a reference to the total length of the person's pensionable service under all of the schemes (counting any period of overlap once only), and
(b)
sub-paragraphs (9) and (10) apply for the purposes of working out the length of the person's pensionable service in respect of each scheme as if a reference to the admissible rules were to the admissible rules of that scheme.
(12)
When applying this paragraph in relation to relevant compensation in respect of a benefit, ignore any pensionable service that relates to a benefit that is not from the same source.
(13)
For the purposes of sub-paragraph (12)—
(a)
benefits attributable to a person's pensionable service under a scheme are from the same source as benefits attributable to the person's pensionable service under that or a connected occupational pension scheme,
(b)
benefits under a scheme which are attributable to a pension credit from a transferor are from the same source as benefits under that or a connected occupational pension scheme which are attributable to a pension credit from the same transferor, and
(c)
benefits are not otherwise from the same source.
(14)
Expressions used in this paragraph have the same meaning as in paragraph 26.”

Part 2Consequential amendments

4

The Pensions Act 2004 is amended as follows.

5

In section 316(2)(s), for “paragraph 26(7)” substitute “ paragraph 26A(7) ”.

6 (1)

Schedule 7 is amended as follows.

(2)

In paragraph 24(2), at the end insert “ of the periodic compensation at that time ”.

(3)

In paragraph 26(9), after “this paragraph” insert “ and paragraph 26A ”.

(4)

In paragraph 27(2), for “sub-paragraph (7) of paragraph 26” substitute “ sub-paragraph (7) of paragraph 26A ”.

7

In paragraph 18(2) of Schedule 5 to the Pensions Act 2008, for “the compensation cap” to the end substitute “ a modified version of the compensation cap in paragraph 26A of Schedule 7 to the Pensions Act 2004 ”.

Part 3Effect of change in transitional cases

Recalculation of periodic compensation going forwards

8 (1)

This paragraph applies in relation to a person if—

(a)

the person is entitled to periodic compensation under paragraph 3, 11 or 15 of Schedule 7 to the Pensions Act 2004,

(b)

the compensation is restricted in accordance with paragraph 26 of that Schedule (compensation cap), and

(c)

the person first became entitled to the compensation before the commencement date.

(2)

The protected pension rate for the person is to be recalculated as if the amendments made by Part 1 of this Schedule had always been in force and the recalculated protected pension rate has effect for the person as from the commencement date.

(3)

For the purposes of that recalculation, paragraph 26A(7) of Schedule 7 to the Pensions Act 2004 (inserted by Part 1 of this Schedule) has effect as if—

(a)

the references to an order made by the Secretary of State were references to the relevant old order, and

(b)

the reference to actuarial adjustment factors were a reference to the relevant old actuarial adjustment factors.

(4)

In this paragraph—

“the protected pension rate”—
1. (a)
  for a person entitled to periodic compensation under paragraph 3 or 15 of Schedule 7 to the Pensions Act 2004, means the protected pension rate for the purposes of sub-paragraph (3)(a) of that paragraph;
2. (b)
  for a person entitled to periodic compensation under paragraph 11 of that Schedule, means the protected notional pension for the purposes of sub-paragraph (3)(a) of that paragraph;
“the relevant old order” means the order in force under paragraph 26(7) of Schedule 7 to the 2004 Act (as originally enacted) at the time when the person first became entitled to the periodic compensation;
“the relevant old actuarial adjustment factors” means the actuarial adjustment factors published by the Board under paragraph 26(7) of Schedule 7 to the 2004 Act (as originally enacted) at the time when the person first became entitled to the periodic compensation.

(5)

Nothing in this paragraph affects increases already accrued under paragraph 28 of Schedule 7 to the Pensions Act 2004 in relation to periods before the commencement date.

New cap does not generally affect old payments

9 (1)

Nothing in this Schedule affects—

(a)

periodic compensation for a person for periods before the commencement date, or

(b)

lump sum compensation for a person who became entitled to the compensation before the commencement date.

(2)

In this paragraph—

“periodic compensation” means compensation within paragraph 26(4)(a), (b) or (d) of Schedule 7 to the Pensions Act 2004;

“lump sum compensation” means compensation within paragraph 26(4)(c) or (e) of that Schedule.

Survivors' compensation

10

When working out the annual rate of a person's periodic compensation under paragraph 4(3), 13(3) or 18(3) of Schedule 7 to the Pensions Act 2004, take into account any effect that paragraph 8 would have had on the dead person's rate if it were not for the death.

Cases involving early payment or postponement of compensation

11

Nothing in this Schedule affects the amount of—

(a)

an actuarial reduction under paragraph 25 of Schedule 7 to the Pensions Act 2004 in a case where a person became entitled to periodic compensation or lump sum compensation before the commencement date, or

(b)

an actuarial increase under paragraph 25A of that Schedule in a case where the commencement of periodic compensation or the payment of lump sum compensation was postponed before the commencement date (even if it continues to be postponed on or after that date).

Recalculation of terminal illness lump sums given in the past year

12 (1)

This paragraph applies in relation to a person who is alive on the commencement date if—

(a)

the person has become entitled to a terminal illness lump sum under paragraph 25E of Schedule 7 to the Pensions Act 2004 at any time in the period of one year ending with the commencement date, and

(b)

the amount of the terminal illness lump sum was restricted in accordance with paragraph 26 of that Schedule (compensation cap).

(2)

The terminal illness lump sum for the person is to be recalculated under Schedule 7 to the Pensions Act 2004 as if the amendments made by Part 1 of this Schedule had been in force at the time that the person became entitled to it.

(3)

For the purposes of that recalculation, paragraph 26A(7) of Schedule 7 to the Pensions Act 2004 (inserted by Part 1 of this Schedule) has effect as if—

(a)

the references to an order made by the Secretary of State were references to the relevant old order, and

(b)

the reference to actuarial adjustment factors were a reference to the relevant old actuarial adjustment factors.

(4)

In sub-paragraph (3)—

“the relevant old order” means the order in force under paragraph 26(7) of Schedule 7 to the 2004 Act (as originally enacted) at the time when the person became entitled to the terminal illness lump sum;

“the relevant old actuarial adjustment factors” means the actuarial adjustment factors published by the Board under paragraph 26(7) of Schedule 7 to the 2004 Act (as originally enacted) at the time when the person became entitled to the terminal illness lump sum.

Meaning of “the pension compensation provisions” in Part 2 of the Pensions Act 2004

13

Section 162(2) of the Pensions Act 2004 is to be treated as including a reference to this Part of this Schedule among “the pension compensation provisions”.

Part 4Schemes undergoing assessment or winding up on the commencement date

Schemes undergoing assessment on the commencement date

14 (1)

This paragraph applies in relation to an eligible scheme that is undergoing assessment on the commencement date.

(2)Continue to use the old cap as the basis of assessment

For the purposes of the following, ignore any effect that this Schedule has on the compensation which would be payable if the Board assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Pensions Act 2004—

(a)

any provision in which the definition of “protected liabilities” in section 131 of that Act applies, and

(b)

any provision in which the definition of “protected benefits quotation” in section 151(8) of that Act applies.

(3)Going forwards, pay pensions on the basis of the new cap

For the purposes of section 138(2) of the Pensions Act 2004 take into account any effect that this Schedule has on the compensation which would be payable if the Board assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 of that Act on the assessment date.

Schemes that begin winding up before the commencement date

15 (1)

This paragraph applies in relation to an eligible scheme that is being wound up if the winding up began (or is treated as having begun) before the commencement date.

Use the old cap when working out the preferential liabilities (generally)

(2)

For the purposes of sections 73 and 73A of the Pensions Act 1995, ignore any effect that this Schedule has on the compensation which would be payable if the Board assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Pensions Act 2004.

Going forwards, pay pensions on the basis of the new cap during assessment

(3)

If for any period the scheme is being wound up and is also undergoing assessment (“the overlap period”), sub-paragraph (4) applies.

(4)

For the purposes of section 73A of the Pensions Act 1995 as it applies in relation to the overlap period, take into account any effect that this Schedule has on the compensation which would be payable if the Board assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Pensions Act 2004.

Meaning of “undergoing assessment”

16

For the purposes of this Part of this Schedule an eligible scheme is “undergoing assessment” if an assessment period has begun in relation to the scheme but has not yet ended.

Meaning of “eligible scheme”

17

Section 126(4) of the Pensions Act 2004 (list of provisions in relation to which regulations may provide that a scheme remains an “eligible scheme”) is to be treated as including a reference to this Part of this Schedule.

Part 5Interpretation and power to make further transitional provision

Interpretation

18

In this Schedule “the commencement date” means the date on which it comes fully into force.

19

Other expressions used in this Schedule have the same meaning as in Part 2 of the Pensions Act 2004.

Further transitional provision

20

The inclusion of Parts 3 and 4 of this Schedule does not prevent transitional provision being made by order under section 56(8).

21 (1)

In relation to a case involving multiple benefits, transitional provision made by order under section 56(8) may, in particular—

(a)

disapply or modify any provision of this Schedule;

(b)

make provision similar to any provision of this Schedule.

(2)

For these purposes, “a case involving multiple benefits” means a case mentioned in paragraph 26(9) of Schedule 7 to the Pensions Act 2004.

22 (1)

Transitional provision made by order under section 56(8) may, in particular, make provision in relation to compensation payable under Chapter 1 of Part 3 of the Pensions Act 2008 (compensation sharing on divorce etc) that is similar to any provision of Part 3 of this Schedule.

(2)

Regulations under paragraph 18 of Schedule 5 to the Pensions Act 2008 which restrict an amount payable to a person in any period by reference to a modified version of the compensation cap in paragraph 26A of Schedule 7 to the Pensions Act 2004 (inserted by Part 1 of this Schedule) may also make provision similar to any provision of Part 3 of this Schedule.