Superannuation Bill

House of Commons

Session 2010 - 11
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Other Bills before Parliament

Superannuation Bill

Superannuation Bill

EXPLANATORY NOTES

Explanatory notes to the Bill, prepared by the Cabinet Office, are published

separately as Bill 58—EN.

EUROPEAN CONVENTION ON HUMAN RIGHTS

Francis Maude has made the following statement under section 19(1)(a) of the

Human Rights Act 1998:

In my view the provisions of the Superannuation Bill are compatible with the

Convention rights.

Bill 58 55/1

Superannuation Bill

Contents

1

Limits on value of benefits provided under civil service compensation scheme

2

Final provisions

Bill 58

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Superannuation Bill

1

A

Bill

To

Make provision for and in connection with limiting the value of the benefits

which may be provided under so much of any scheme under section 1 of the

Superannuation Act 1972 as provides by virtue of section 2(2) of that Act for

benefits to be provided by way of compensation to or in respect of persons

who suffer loss of office or employment.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and

consent of the Lords Spiritual and Temporal, and Commons, in this present

Parliament assembled, and by the authority of the same, as follows:—

1

Limits on value of benefits provided under civil service compensation

scheme

(1)

The civil service compensation scheme is to have effect subject to the following

limitations.

(2)

The aggregate amount of compensation benefits provided to or in respect of a

5

person under the scheme is not to exceed—

(a)

in the case of a compulsory severance, an amount equal to that person’s

pensionable earnings for 12 months;

(b)

in the case of a voluntary severance, an amount equal to that person’s

pensionable earnings for 15 months.

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(3)

For the purposes of this section, the amount of a compensation benefit is equal

to the cost of providing it; and that cost is to be determined in accordance with

guidance issued by the Minister, having regard to any advice given by the

scheme actuary.

(4)

If—

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(a)

the aggregate amount of compensation benefits provided to or in

respect of a person under the scheme would (apart from this section)

exceed the applicable limitation in subsection (2), and

(b)

those benefits would (apart from this section) be provided otherwise

than in the form of a single lump sum payment,

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Superannuation Bill

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all the compensation benefits to be provided in that case are to be provided

(subject to the limitation in subsection (2)) in the form of a single lump sum

payment.

(5)

The limitations in subsection (2) apply only in relation to—

(a)

a compulsory severance which is the consequence of a notice of

5

dismissal given after the time when this section comes into force;

(b)

a voluntary severance which is the consequence of an agreement made

after that time.

(6)

For the purposes of this section—

(a)

“compulsory severance” means a loss of office or employment which is

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the consequence of a notice of dismissal, and

(b)

“voluntary severance” means any other loss of office or employment.

(7)

In this section “pensionable earnings”, in relation to a person, means earnings

at the rate which, immediately before the compulsory or voluntary severance

in question, was the rate of earnings—

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(a)

on which the person was required to pay periodical pension

contributions under a scheme under section 1 of the Superannuation

Act 1972, or

(b)

on which the person would have been required to pay such

contributions if it were assumed that the person were then a member of

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such a scheme who was required to pay such contributions.

(8)

In determining for the purposes of subsection (7) the rate of earnings on which

the person was, or would have been, required to pay such contributions—

(a)

any limit on that rate which applies to persons who became civil

servants or members of such a scheme on or after 1 June 1989 (or to any

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such persons and others) is to be ignored;

(b)

a person who, immediately before the compulsory or voluntary

severance in question, was unpaid or was being paid at a rate less than

the normal rate, is to be treated as if the person were then being paid at

the normal rate;

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for this purpose “the normal rate” is the rate at which the person would

normally have been paid.

(9)

In this section—

“civil service compensation scheme” means so much of any scheme made

under section 1 of the Superannuation Act 1972 (whether before or after

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the coming into force of this section) as provides by virtue of section

2(2) of that Act for benefits to be provided by way of compensation to

or in respect of persons who suffer loss of office or employment;

“compensation benefit” means so much of any pension, allowance or

gratuity as is provided by way of compensation to or in respect of a

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person by reason only of the person’s having suffered loss of office or

employment;

“scheme actuary” means the actuary appointed by the Minister to provide

a consulting service on a range of actuarial matters relating to civil

service pension and compensation arrangements.

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(10)

In subsection (9) a reference to suffering loss of office or employment includes

a reference to suffering loss or diminution of emoluments as a consequence of

suffering loss of office or employment, but does not include—

Superannuation Bill

3

(a)

a loss of remuneration which a person would have received but for the

person’s having been dismissed—

(i)

without notice, or

(ii)

with notice that is shorter than the person would normally have

been given, or

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(b)

a loss of remuneration which a person with a fixed term appointment

would have received but for the ending of that appointment before the

expiry of the fixed term.

(11)

The Minister may by order provide for paragraph (a) or (b) of subsection (2) to

have effect as if for the number of months specified in that paragraph there

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were substituted a greater number of months.

2

Final provisions

(1)

This Act may be cited as the Superannuation Act 2010.

(2)

This Act comes into force on the day it is passed.

(3)

Except so far as otherwise provided under this section, section 1 expires at the

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end of the period of 12 months beginning with the day on which that section

comes into force.

(4)

The Minister may by order—

(a)

repeal section 1;

(b)

provide that that section—

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(i)

is not to expire at the time when it would otherwise expire

under subsection (3) or in accordance with an order under this

subsection, but

(ii)

is to continue in force after that time for a period not exceeding

6 months;

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(c)

at any time revive that section (following its expiry or repeal) for a

period not exceeding 6 months.

(5)

The expiry or repeal of section 1 does not affect the application of that section

in relation to compensation benefits provided to or in respect of a person in

connection with a loss of office or employment occurring before its expiry or

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repeal.

(6)

An order made by the Minister under this Act—

(a)

is to be made by statutory instrument;

(b)

may include supplementary, incidental, transitional or saving

provision.

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(7)

A statutory instrument containing an order under section 1(11) or subsection

(4)(b) or (c) of this section may not be made unless a draft of the instrument has

been laid before and approved by a resolution of the House of Commons.

(8)

Any other statutory instrument containing an order under this Act is subject to

annulment in pursuance of a resolution of the House of Commons.

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(9)

In this Act “the Minister” means the Minister for the Civil Service.