Welfare Reform and Pensions Bill - continued        House of Lords
PART IVA, REQUIREMENTS RELATING TO PENSION CREDIT BENEFIT - continued

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Indexation
Public service pension schemes.     36. - (1) The Pensions (Increase) Act 1971 shall be amended as follows.
 
      (2) In section 3 (qualifying conditions), after subsection (2) there shall be inserted-
 
 
    "(2A) A pension attributable to the pensioner having become entitled to a pension credit shall not be increased unless the pensioner has attained the age of fifty-five years."
 
      (3) In section 8, in subsection (1) (definition of "pension"), in paragraph (a), the words from "(either" to "person)" shall be omitted.
 
      (4) In that section, in subsection (2) (when pension deemed for purposes of the Act to begin), after "pension", in the first place, there shall be inserted "which is not attributable to a pension credit", and after that subsection there shall be inserted-
 
 
    "(2A) A pension which is attributable to a pension credit shall be deemed for purposes of this Act to begin on the day on which the order or provision on which the credit depends takes effect."
 
      (5) In section 17(1) (interpretation)-
 
 
    (a) for the definitions of "derivative pension" and "principal pension" there shall be substituted-
 
    ""derivative pension" means a pension which-
 
      (a) is not payable in respect of the pensioner's own services, and
 
      (b) is not attributable to the pensioner having become entitled to a pension credit;",
 
    (b) after the definition of "pension" there shall be inserted-
 
    ""pension credit" means a credit under section 26(1)(b) of the Welfare Reform and Pensions Act 1999 or under corresponding Northern Ireland legislation;
 
    "principal pension" means a pension which-
 
      (a) is payable in respect of the pensioner's own services; or
 
      (b) is attributable to the pensioner having become entitled to a pension credit;", and
 
    (c) for the definition of "widow's pension" there shall be substituted-
 
    ""widow's pension" means a pension payable-
 
      (a) in respect of the services of the pensioner's deceased husband, or
 
      (b) by virtue of the pensioner's deceased husband having become entitled to a pension credit."
Other pension schemes.     37. - (1) The Secretary of State may by regulations make provision for a pension to which subsection (2) applies to be increased, as a minimum, by reference to increases in the retail prices index, so far as not exceeding 5% per annum.
 
      (2) This subsection applies to-
 
 
    (a) a pension provided to give effect to eligible pension credit rights of a member under a qualifying occupational pension scheme, and
 
    (b) a pension provided to give effect to safeguarded rights of a member under a personal pension scheme.
      (3) In this section-
 
 
    "eligible", in relation to pension credit rights, means of a description prescribed by regulations made by the Secretary of State;
 
    "pension credit rights", in relation to an occupational pension scheme, means rights to future benefits under the scheme which are attributable (directly or indirectly) to a credit under section 26(1)(b) or under corresponding Northern Ireland legislation.
 
    "qualifying occupational pension scheme" means an occupational pension scheme which is not a public service pension scheme;
 
    "safeguarded rights" has the meaning given in section 68A of the Pension Schemes Act 1993.
 
Charges by pension arrangements
Charges in respect of pension sharing costs.     38. - (1) The Secretary of State may by regulations make provision for the purpose of enabling the person responsible for a pension arrangement involved in pension sharing to recover from the parties to pension sharing prescribed charges in respect of prescribed descriptions of pension sharing activity.
 
      (2) Regulations under subsection (1) may include-
 
 
    (a) provision for the start of the implementation period for a pension credit to be postponed in prescribed circumstances;
 
    (b) provision, in relation to payments in respect of charges recoverable under the regulations, for reimbursement as between the parties to pension sharing;
 
    (c) provision, in relation to the recovery of charges by deduction from a pension credit, for the modification of Schedule 5;
 
    (d) provision for the recovery in prescribed circumstances of such additional amounts as may be determined in accordance with the regulations.
      (3) For the purposes of regulations under subsection (1), the question of how much of a charge recoverable under the regulations is attributable to a party to pension sharing is to be determined as follows-
 
 
    (a) where the relevant order or provision includes provision about the apportionment of charges under this section, there is attributable to the party so much of the charge as is apportioned to him by that provision;
 
    (b) where the relevant order or provision does not include such provision, the charge is attributable to the transferor.
      (4) For the purposes of subsection (1), a pension arrangement is involved in pension sharing if section 26 applies by virtue of an order or provision which relates to the arrangement.
 
      (5) In that subsection, the reference to pension sharing activity is to activity attributable (directly or indirectly) to the involvement in pension sharing.
 
      (6) In subsection (3)-
 
 
    (a) the reference to the relevant order or provision is to the order or provision which gives rise to the pension sharing, and
 
    (b) the reference to the transferor is to the person to whose rights that order or provision relates.
      (7) In this section "prescribed" means prescribed in regulations under subsection (1).
 
 
Adaptation of statutory schemes
Extension of scheme-making powers.     39. - (1) Power under an Act to establish a pension scheme shall include power to make provision for the provision, by reference to pension credits which derive from rights under-
 
 
    (a) the scheme, or
 
    (b) a scheme in relation to which the scheme is specified as an alternative for the purposes of paragraph 2 of Schedule 5,
  of benefits to or in respect of those entitled to the credits.
 
      (2) Subsection (1) is without prejudice to any other power.
 
      (3) Subsection (1) shall apply in relation to Acts whenever passed.
 
      (4) No obligation to consult shall apply in relation to the making, in exercise of a power under an Act to establish a pension scheme, of provision of a kind authorised by subsection (1).
 
      (5) Any provision of, or under, an Act which makes benefits under a pension scheme established under an Act a charge on, or payable out of-
 
 
    (a) the Consolidated Fund,
 
    (b) the Scottish Consolidated Fund, or
 
    (c) the Consolidated Fund of Northern Ireland,
  shall be treated as including any benefits under the scheme which are attributable (directly or indirectly) to a pension credit which derives from rights to benefits charged on, or payable out of, that fund.
 
      (6) In this section-
 
 
    "pension credit" includes a credit under Northern Ireland legislation corresponding to section 26(1)(b);
 
    "pension scheme" means a scheme or arrangement providing benefits, in the form of pensions or otherwise, payable on termination of service, or on death or retirement, to or in respect of persons to whom the scheme or arrangement applies.
Power to extend judicial pension schemes.     40. - (1) The appropriate minister may by regulations amend the Sheriffs' Pensions (Scotland) Act 1961, the Judicial Pensions Act 1981 or the Judicial Pensions and Retirement Act 1993 for the purpose of-
 
 
    (a) extending a pension scheme under the Act to include the provision, by reference to pension credits which derive from rights under-
 
      (i) the scheme, or
 
      (ii) a scheme in relation to which the scheme is specified as an alternative for the purposes of paragraph 2 of Schedule 5,
 
    of benefits to or in respect of those entitled to the credits, or
 
    (b) restricting the power of the appropriate minister to accept payments into a pension scheme under the Act, where the payments represent the cash equivalent of rights under another pension scheme which are attributable (directly or indirectly) to a pension credit.
      (2) Regulations under subsection (1)-
 
 
    (a) may make benefits provided by virtue of paragraph (a) of that subsection a charge on, and payable out of, the Consolidated Fund;
 
    (b) may confer power to make subordinate legislation, including subordinate legislation which provides for calculation of the value of rights in accordance with guidance from time to time prepared by a person specified in the subordinate legislation.
      (3) The appropriate minister for the purposes of subsection (1) is-
 
 
    (a) in relation to a pension scheme whose ordinary members are limited to those who hold judicial office whose jurisdiction is exercised exclusively in relation to Scotland, the Secretary of State, and
 
    (b) in relation to any other pension scheme, the Lord Chancellor.
      (4) In this section-
 
 
    "pension credit" includes a credit under Northern Ireland legislation corresponding to section 26(1)(b);
 
    "pension scheme" means a scheme or arrangement providing benefits, in the form of pensions or otherwise, payable on termination of service, or on death or retirement, to or in respect of persons to whom the scheme or arrangement applies.
 
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Prepared 22 July 1999