Welfare Reform and Pensions Bill - continued        House of Lords
PART IV, PENSION SHARING - continued

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Pension credits
Time for discharge of liability.     30. - (1) A person subject to liability in respect of a pension credit shall discharge his liability before the end of the implementation period for the credit.
 
      (2) Where the trustees or managers of an occupational pension scheme have not done what is required to discharge their liability in respect of a pension credit before the end of the implementation period for the credit-
 
 
    (a) they shall, except in such cases as the Secretary of State may prescribe by regulations, notify the Regulatory Authority of that fact within such period as the Secretary of State may so prescribe, and
 
    (b) section 10 of the Pensions Act 1995 (power of the Regulatory Authority to impose civil penalties) shall apply to any trustee or manager who has failed to take all such steps as are reasonable to ensure that liability in respect of the credit was discharged before the end of the implementation period for it.
      (3) If trustees or managers to whom subsection (2)(a) applies fail to perform the obligation imposed by that provision, section 10 of the Pensions Act 1995 shall apply to any trustee or manager who has failed to take all reasonable steps to ensure that the obligation was performed.
 
      (4) On the application of the trustees or managers of an occupational pension scheme who are subject to liability in respect of a pension credit, the Regulatory Authority may extend the implementation period for the credit for the purposes of this section if it is satisfied that the application is made in such circumstances as the Secretary of State may prescribe by regulations.
 
      (5) In this section "the Regulatory Authority" means the Occupational Pensions Regulatory Authority.
 
"Implementation period".     31. - (1) For the purposes of this Chapter, the implementation period for a pension credit is the period of 4 months beginning with the later of-
 
 
    (a) the day on which the relevant order or provision takes effect, and
 
    (b) the first day on which the person responsible for the pension arrangement to which the relevant order or provision relates is in receipt of-
 
      (i) the relevant matrimonial documents, and
 
      (ii) such information relating to the transferor and transferee as the Secretary of State may prescribe by regulations.
      (2) The reference in subsection (1)(b)(i) to the relevant matrimonial documents is to copies of-
 
 
    (a) the relevant order or provision, and
 
    (b) the order, decree or declarator responsible for the divorce or annulment to which it relates,
  and, if the pension credit depends on provision falling within subsection (1)(f) of section 25, to documentary evidence that the agreement containing the provision is one to which subsection (3)(a) of that section applies.
 
      (3) Subsection (1) is subject to any provision made by regulations under section 38(2)(a).
 
      (4) The Secretary of State may by regulations-
 
 
    (a) make provision requiring a person subject to liability in respect of a pension credit to notify the transferor and transferee of the day on which the implementation period for the credit begins;
 
    (b) provide for this section to have effect with modifications where the pension arrangement to which the relevant order or provision relates is being wound up;
 
    (c) provide for this section to have effect with modifications where the pension credit depends on a pension sharing order and the order is the subject of an application for leave to appeal out of time.
      (5) In this section-
 
 
    "relevant order or provision", in relation to a pension credit, means the pension sharing order or provision on which the pension credit depends;
 
    "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.
Mode of discharge of liability.     32. - (1) Schedule 5 (which makes provision about how liability in respect of a pension credit may be discharged) shall have effect.
 
      (2) Where the person entitled to a pension credit dies before liability in respect of the credit has been discharged-
 
 
    (a) Schedule 5 shall cease to have effect in relation to the discharge of liability in respect of the credit, and
 
    (b) liability in respect of the credit shall be discharged in accordance with regulations made by the Secretary of State.
 
Treatment of pension credit rights under schemes
Safeguarded rights.     33. After section 68 of the Pension Schemes Act 1993 there shall be inserted-
 
 
  "PART IIIA
 
  SAFEGUARDED RIGHTS
Safeguarded rights.     68A. - (1) Subject to subsection (2), the safeguarded rights of a member of an occupational pension scheme or a personal pension scheme are such of his rights to future benefits under the scheme as are attributable (directly or indirectly) to a pension credit in respect of which the reference rights are, or include, contracted-out rights or safeguarded rights.
 
      (2) If the rules of an occupational pension scheme or a personal pension scheme so provide, a member's safeguarded rights are such of his rights falling within subsection (1) as-
 
 
    (a) in the case of rights directly attributable to a pension credit, represent the safeguarded percentage of the rights acquired by virtue of the credit, and
 
    (b) in the case of rights directly attributable to a transfer payment, represent the safeguarded percentage of the rights acquired by virtue of the payment.
      (3) For the purposes of subsection (2)(a), the safeguarded percentage is the percentage of the rights by reference to which the amount of the credit is determined which are contracted-out rights or safeguarded rights.
 
      (4) For the purposes of subsection (2)(b), the safeguarded percentage is the percentage of the rights in respect of which the transfer payment is made which are contracted-out rights or safeguarded rights.
 
      (5) In this section-
 
 
    "contracted-out rights" means such rights under, or derived from-
 
      (a) an occupational pension scheme contracted-out by virtue of section 9(2) or (3), or
 
      (b) an appropriate personal pension scheme,
 
    as may be prescribed;
 
    "reference rights", in relation to a pension credit, means the rights by reference to which the amount of the credit is determined.
Requirements relating to safeguarded rights.     68B. Regulations may prescribe requirements to be met in relation to safeguarded rights by an occupational pension scheme or a personal pension scheme.
 
Reserve powers in relation to non-complying schemes.     68C. - (1) This section applies to-
 
 
    (a) any occupational pension scheme, other than a public service pension scheme, and
 
    (b) any personal pension scheme.
      (2) If any scheme to which this section applies does not comply with a requirement prescribed under section 68B and there are any persons who-
 
 
    (a) have safeguarded rights under the scheme, or
 
    (b) are entitled to any benefit giving effect to such rights under the scheme,
  the Inland Revenue may direct the trustees or managers of the scheme to take or refrain from taking such steps as they may specify in writing for the purpose of safeguarding the rights of persons falling within paragraph (a) or (b).
 
      (3) A direction under subsection (2) shall be final and binding on the trustees or managers to whom the direction is given and any person claiming under them.
 
      (4) An appeal on a point of law shall lie to the High Court or, in Scotland, the Court of Session from a direction under subsection (2) at the instance of the trustees or managers, or any person claiming under them.
 
      (5) A direction under subsection (2) shall be enforceable-
 
 
    (a) in England and Wales, in a county court, as if it were an order of that court, and
 
    (b) in Scotland, by the sheriff, as if it were an order of the sheriff and whether or not the sheriff could himself have given such an order.
Power to control transfer or discharge of liability.     68D. Regulations may prohibit or restrict the transfer or discharge of any liability under an occupational pension scheme or a personal pension scheme in respect of safeguarded rights except in prescribed circumstances or on prescribed conditions."
 
Requirements relating to pension credit benefit.     34. After section 101 of the Pension Schemes Act 1993 there shall be inserted-
 
 
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Prepared 22 July 1999