PENSION SCHEMES ACT 1995 SOCIAL SECURITY ACT 2000 PENSIONS ACT 2011 (APPLICATION) ORDER 2012

Transcription

1 Statutory Document No. 0152/12 PENSION SCHEMES ACT 1995 SOCIAL SECURITY ACT 2000 PENSIONS ACT 2011 (APPLICATION) ORDER 2012 Approved by Tynwald 17th April 2012 Coming into operation in accordance with article 2 The Department of Social Care makes this Order under section 1 of the Pension Schemes Act and section 1 of the Social Security Act Title This is the Pensions Act 2011 (Application) Order Commencement (1) This Order comes into operation on the day that it is approved by Tynwald. (2) However, once it is approved by Tynwald, each provision of the applied legislation (as modified) (a) is deemed to have come into operation on the same day as it did so in Great Britain; or (as the case may be) (b) comes into operation on the same day as it does so in Great Britain c c.5 1

2 3 Interpretation (1) In this Order "the applied legislation" means the following provisions of the Pensions Act (a) Part 1 and Schedules 1 to 3 (State pension); (b) in Part 3 (occupational pension schemes), sections 19, 21 and 27; (c) in Part 4 (money purchase benefits), section 29; and (d) in Part 6 (miscellaneous and general), section 39. (2) Unless the context otherwise requires - (a) a reference in the applied legislation to any provision in an instrument of a legislative character which is not itself a provision of the applied legislation shall be construed as if the provision so referred to had been applied to the Island from the date on which that instrument of a legislative character had effect in Great Britain; (b) a reference in the applied legislation to a provision of any such legislation or of any other legislation applied to the Island by an order under section 1 of the Pension Schemes Act 1995 or section 1 of the Social Security Act 2000 shall be construed as a reference to that legislation as it has effect in the Island. 4 Application to the Island of the Pensions Act 2011 The applied legislation applies to the Island as part of the law of the Island, subject to the exceptions, adaptations and modifications which are shown in the Schedule to this Order c.19 2

3 Made ) xif CAP\ Minister for Social Care 3

4 Pensions Act 2011 a 19 SCHEDULE (Article 4) This Schedule sets out the text of the Pensions Act 2011 (of Parliament) as applied by this Order with such exceptions, adaptations and modifications made where necessary, which appear in bold italic type. Pensions Act 2011 CHAPTER 19 CONTENTS PART 1 STATE PENSION 1. Equalisation of and increase in pensionable age for men and women 2. Abolition of certain additions to the state pension 3. Consolidation of additional pension PART 2 AUTOMATIC ENROLMENT 4. Automatic re-enrolment where scheme membership interrupted (Omitted) 5. Earnings trigger for automatic enrolment and re-enrolment (Omitted) 6. Postponement or disapplication of automatic enrolment (Omitted) 7. Timing of automatic re-enrolment (Omitted) 8. Review of earnings trigger and qualifying earnings band (Omitted) 9. Rounded figures for earnings trigger and qualifying earnings band (Omitted) 10. Qualifying schemes: administration charges (Omitted) 11. Test scheme standard for schemes that produce sum of money for provision of benefits (Omitted) 12. Certification that alternative to quality requirement is satisfied (Omitted) 13. Certification for non-uk schemes Omitted 14. Transitional period for defined benefits and hybrid schemes to be optional (Omitted) 15. Arrangements where transitional conditions cease to be satisfied (Omitted) 16. Power of managers to modify by resolution (Omitted) 17. No indemnification for civil penalties (Omitted) 18. Power to exempt certain cross-border employment from enrolment duty (Omitted) PART 3 OCCUPATIONAL PENSION SCHEMES Indexation and revaluation 19. Indexation and revaluation 20. Pension compensation: annual increases in periodic compensation (Omitted) 21. Indexation requirements for cash balance benefits

5 Pensions Act 2011 c Pension Protection Fund (Omitted) Pension Protection Fund Financial assistance scheme 23. Financial assistance scheme: amount of payments (Omitted) 24. Financial assistance scheme: transfer of assets (Omitted) Miscellaneous 25. Payment of surplus to employer: transitional power to amend scheme (Omitted) 26. Contribution notices and financial support directions (Omitted) 27. Technical amendment to Schedule 4 to the Pensions Act Technical amendment to section 42(6) of the Pension Schemes Act 1993 (Omitted) PART 4 MONEY PURCHASE BENEFITS 29. Definition of money purchase benefits 30. Transitional (Omitted) 31. Consequential and supplementary (Omitted) 32. Power to make further provision (Omitted) 33. Regulations (Omitted) PART 5 JUDICIAL PENSIONS 34. Contributions towards cost of judicial pensions etc (Omitted) PART 6 MISCELLANEOUS AND GENERAL Miscellaneous 35. Grants by the Secretary of State to advisory bodies etc (Omitted) 36. Service of documents and electronic working (Omitted) 37. Extent (Omitted) 38. Commencement (Omitted) 39. Short title General Schedule 1 Equalisation of and increase in pensionable age for men and women: consequential amendments Schedule 2 Abolition of certain additions to the state pension: consequential amendments etc Schedule 3 Consolidation of additional pension Schedule 4 Pension Protection Fund (Omitted) Schedule 5 Contributions towards cost of judicial pensions etc (Omitted) 5

6 Pensions Act 2011 c.19 Pensions Act CHAPTER 19 PART 1 STATE PENSION Equalisation of and increase in pensionable age for men and women 1. (1) In Schedule 4 to the Pensions Act (equalisation of and increase in pensionable age for men and women) paragraph 1 is amended as follows. (2) In sub-paragraph (1)5 for "6th April 1959" substitute "6th December 1953". (3) Omit sub-paragraph (4)6. (4) In table 17 for the entries (in both columns) relating to each of the periods from"6th April 1953 to 5th May 1953" to "6th March 1955 to 5th April 1955" substitute "6th April 1953 to 5th May th May 1953 to 5th June th June 1953 to 5th July th July 1953 to 5th August th August 1953 to 5th September1953 6th September 1953 to 5th October th October 1953 to 5th November th November 1953 to 5th December 1953 (5) For table 28 substitute "TABLE 2 6th July th November th March th July th November th March th July th November 2018". (1) (2) Period within which birthday falls Day pensionable age attained 6th December 1953 to 5th January th January 1954 to 5th February th February 1954 to 5th March th March th May th July c.26 (see SD 501/97) 5 Sub-paragraph (1) amended by paragraph 4(2) of Schedule 3 to the Pensions Act 2007 c.22 (see SD 193/09). 6 Sub-paragraph (4) substituted by paragraph 4(4) of Schedule 3 to the Pensions Act 2007 c.22 (see SD 193/09). Table heading substituted by paragraph 4(5) of Schedule 3 to Pensions Act 2007 c.22 (see SD 193/09). s Table 2 inserted by paragraph 4(6) of Schedule 3 to Pensions Act 2007 c.22 (see SD 193/09).

7 Pensions Act 2011 c.19 6th March 1954 to 5th April th April 1954 to 5th May th May 1954 to 5th June th June 1954 to 5th July th July 1954 to 5th August th August 1954 to 5th September th September 1954 to 5th October th September th November th January th March th May th July th September 2020". (6) In sub-paragraph (6)9 for "5th April 1960" substitute "5th October 1954". (7) Schedule 1 (equalisation of and increase in pensionable age for men and women: consequential amendments) has effect. Abolition of certain additions to the state pension 2. (1) to (4) Omitted. (5) In Schedule 5 to the Social Security Contributions and Benefits Act 1992 (pension increase or lump sum where entitlement to retirement pension is deferred) omit paragraphs 510 5A11, 612, 6A13 and 714. (6) Schedule 2 (repeals and amendments consequential on subsection (5)) has effect. (7) The repeals made by subsection (5) do not affect the application of paragraphs 5 to 6A of Schedule 5 to the Social Security Contributions and Benefits Act 1992 in a case where (a) W became entitled to a Category A or Category B retirement pension before the day on which subsection (5) comes into force, and (b) S died before that day; (and section 150(1)(d) of the Social Security Administration Act 1992 (as it has effect in Great Britain) continues to apply accordingly for the purposes of those paragraphs). (8) The enactments amended by Schedule 2 have effect in relation to such a case as if the repeals and amendments made by that Schedule (apart from the amendments made by paragraph 3(7) and (8)) had not been made. (9) In subsection (7) "W" and "S" have the same meaning as in paragraph 5 of Schedule 5 to the Social Security Contributions and Benefits Act Sub-paragraph (6) inserted by paragraph 4(6) of Schedule 3 to Pensions Act 2007 c.22 (see SD 193/09). 10 Paragraph 5 substituted by paragraph 21 of Schedule 4 to the Pensions Act 1995 c.26 (see SD 501/97) and amended by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05). 11 Paragraph 5A inserted by paragraph 21 of Schedule 4 to the Pensions Act 1995 c.26 (see SD 501/97) and amended by section 39 of the Child Support, Pensions and Social Security Act 2000 c.19 (see SD 378/01) and paragraph 20 of Schedule 1 and Part 3 of Schedule 7 to the Pensions Act 2007 c.22 (see SD 193/09). 2 Paragraph 6 substituted by paragaph 21 of Schedule 4 to the Pensions Act 1995 c.26 (see SD 501/97) and amended by section 39 of the Child Support, Pensions and Social Security Act 2000 c.19 (see SD 378/01) and paragraph 20 of Schedule 1 and Part 3 of Schedule 7 to the Pensions Act 2007 c.22 (see SD 193/09). '3 Paragraph 6A inserted by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05) and paragraph 20 of Schedule 1 and Part 3 of Schedule 7 to the Pensions Act 2007 c.22 (see SD 193/09). 14 Paragraph 7 inserted by paragraph 40 of Schedule 1 to the Social Security (Incapacity for Work) Act 1994 c.18 (see SD 508/94) and amended by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05). 1

8 Pensions Act 2011 (10) In this section a reference to becoming entitled to a pension before a day includes a reference to becoming entitled on or after that day to the payment of a pension in respect of a period before that day. Consolidation of additional pension 3. Schedule 3 (consolidation of additional pension) has effect. PART 2 AUTOMATIC ENROLMENT Automatic re-enrolment where scheme membership interrupted 4. Omitted. Earnings trigger for automatic enrolment and re-enrolment 5. Omitted. Postponement or disapplication of automatic enrolment 6. Omitted. Timing of automatic re-enrolment 7. Omitted. Review of earnings trigger and qualifying earnings band 8. Omitted. Rounded figures for earnings trigger and qualifying earnings band 9. Omitted. Qualifying schemes: administration charges 10. Omitted. Test scheme standard for schemes that produce sum of money for provision of benefits 11 Omitted. Certification that alternative to quality requirement is satisfied 12. Omitted. Certification for non-uk schemes 13. Omitted. Transitional period for defined benefits and hybrid schemes to be optional 14. Omitted. Arrangements where transitional conditions cease to be satisfied 15. Omitted. 8

9 Pensions Act 2011 c.19 Power of managers to modify by resolution 16. Omitted. No indemnification for civil penalties 17. Omitted. Power to exempt certain cross-border employment from enrolment duty 18. Omitted. Indexation and revaluation PART 3 OCCUPATIONAL PENSION SCHEMES Indexation and revaluation 19. (1) Section 84 of the Pension Schemes Act (basis of revaluation of accrued benefits) is amended as follows. (2) In subsection (5)(b)16 for the words from "maintains" to "index" substitute ", in the opinion of the Secretary of State, maintains the value of the pension or other benefit by reference to the rise in the general level of prices in Great Britain". (3) Omit subsection (6)17. (4) Schedule 3 to the 1993 Act (which sets out methods for revaluing accrued benefits for the purposes of section 84 of the 1993 Act) is amended as follows. (5) After paragraph 1(4) insert "(5) The sub-paragraphs above are subject to sub-paragraph (6). (6) If paragraph 2A applies to the pension or other benefit, the final salary method is to apply the requirement of the rules of the scheme mentioned in paragraph 2A(1).". (SA) For paragraph 218 substitute "2. The revaluation percentage and the appropriate revaluation percentage (1) For the purposes of paragraph I there shall be (a) (b) a higher revaluation percentage, and a lower revaluation percentage, as is specified in each calendar year by order by the Secretary of State (so far as it is necessary to do so) for each period which is a revaluation period in relation to that order c.48 (see SD 531/95) 16 Subsection (5)(b) inserted by section 281(2) of the Pensions Act 2004 c.35 (see SD 220/05). 17 Subsection (6) added by section 281(3) of the Pensions Act 2004 c.35 (see SD 220/05). 18 Paragraph 2 amended by paragraph 19 of Part 3 of the Schedule to S.I. 2005/2053 (see SD 745/05) and paragraphs 2 and 3 of Schedule 2 to the Pensions Act 2008 c.30 (see SD 851/09). 9

10 Pensions Act c.19 (2) A period is a "revaluation period", in relation to an order under this paragraph, if it is a period which (a) (b) begins with 1St January 1986 or with an anniversary of that date falling before the making of the order; and ends with the next day after the making of the order which is 31g December. (3) The higher revaluation percentage specified in relation to a revaluation period is the lesser of - (a) (b) the percentage which appears to the Secretary of State to be the percentage increase in the general level of prices in Great Britain during the period which is the reference period in relation to the revaluation period ("the inflation percentage"), and the higher maximum rate. (3A) The lower revaluation percentage specified in relation to a revaluation period is the lesser of - (a) (b) the percentage which appears to the Secretary of State to be the inflation percentage, and the lower maximum rate. (4) Omitted. (5) For the purposes of sub-paragraph (3)(a), the reference period in relation to a revaluation period is (a) in the case of the revaluation period beginning on 131 January 1986, the period which begins with 1g October 1985 and ends with the last day before the making of the order which is 30th September; and (b) in the case of the revaluation periods with later commencement dates, the period which- (i) (ii) begins with the last day before the commencement of the revaluation period which is 1g October; and ends with the last day before the making of the order which is 30th September. (6) For the purposes of sub-paragraph (3)(b) and (3A)(b) "the higher maximum rate" in relation to a revaluation period, is (a) in the case of a revaluation period of 12 months, 5 per cent; and (b) in any other case, the percentage that would be the inflation percentage had the general level of prices increased at the rate of 5 per cent compound per annum during the reference period in question; "the lower maximum rate", in relation to a revaluation period, is (a) in the case of a revaluation period of 12 months, 2.5 per cent; and 10

11 Pensions Act 2011 c.19 (7) In paragraph 1 - (6) After paragraph 219 insert (b) in any other case, the percentage that would be the inflation percentage had the general level of prices increased at the rate of 2.5 per cent compound per annum during the reference period in question. "the appropriate higher revaluation percentage" means the higher revaluation percentage specified in the last calendar year before the date on which the member attains normal pension age as the higher revaluation percentage for the revaluation period which is of the same length as the number of complete years in the prepension period; "the appropriate lower revaluation percentage" has a corresponding meaning."". "2A (1) This paragraph applies to the pension or other benefit if the rules of the scheme under which it is payable contain a requirement that the accrued benefit be revalued by adding to the accrued benefit an amount of at least the relevant amount. (2) "The accrued benefit" has the same meaning as in paragraph 1. (3) "The relevant amount" means the amount which, ignoring paragraph 1(5) and (6), would be the additional amount specified in paragraph 1(1A), (1B), (1C) or (1D) (as the case may be) were the appropriate higher revaluation percentage and the appropriate lower revaluation percentage to be determined on the following basis. (4) The higher revaluation percentage and the lower revaluation percentage for the revaluation period mentioned in paragraph 2(7) are to be taken to be the percentages which would have been specified in the Secretary of State's order (a) had the following been substituted for paragraph 2(3)(a) "(a) the percentage increase in the retail prices index for the reference period in relation to the revaluation period ("the inflation percentage"), and", (b) had, in paragraph 2(3A)(a), the words "the percentage which appears to the Secretary of State to be" been omitted, (c) (d) omitted, omitted, (e) had, in paragraph (b) of the definitions of "the higher maximum rate" and "the lower maximum rate" in paragraph 2(6), the words "retail prices index" been substituted for "general level of prices", and (f) had the following been inserted after paragraph 2(6)- "(6A) In this paragraph "retail prices index" means (a) the general index of retail prices (for all items) published by the Statistics Board (or any predecessor), or 19 Paragraph 2 amended by paragraph 3 of Schedule 2 to the Pensions Act 2008 c.30 (see SD 851/09). 11

12 Pep..Flans Act 2011 c.19 (b) where that index is not published for a month, any substituted index or figures published by the Board (or any predecessor)."". (7) Section 51 of the Pensions Act (annual increase in rate of certain pensions) is amended as follows. (8) For subsections (3) and (4)21 substitute "(3) Subsection (2) does not apply to the annual rate of a pension under an occupational pension scheme, or to a part of that rate, if under the rules of the scheme the rate or part is for the time being being increased at intervals of not more than twelve months by at least the relevant percentage. (4) For the purposes of subsection (3) the relevant percentage is (a) the percentage increase in the UK consumer prices index for the reference period, being a period determined, in relation to each periodic increase, under the rules, or (b) if lower, the default percentage for that period. (4ZA) Subsection (2) does not apply to the annual rate of a pension under an occupational pension scheme, or to a part of that rate, if subsection (4ZB) applies to the rate or part. (4ZB) Subject to subsection (4ZD), this subsection applies to the rate or part if, under the rules of the scheme, the rate or part is for the time being being increased, and since the relevant time has always been increased, at intervals of not more than twelve months by at least (a) the percentage increase in the UK retail prices index for the reference period, being a period determined, in relation to each periodic increase, under the rules, or (b) if lower, the default percentage for that period. (4ZC) In subsection (4ZB) "the relevant time" means (a) the beginning of 2011 or, if later, the time when the pension became a pension in payment, or (b) if the pension was transferred to the scheme from another occupational pension scheme as a pension in payment after the beginning of 2011, the time of the transfer. (4ZD) If the pension was transferred to the scheme as mentioned in subsection (4ZC)(b), subsection (4ZB) does not apply to the rate or part unless, immediately before the transfer, subsection (4ZB) (read with this subsection if relevant) applied to the rate or part by reference to the scheme from which the pension was transferred (or would have applied had subsection (4ZB) been in force immediately before the transfer). (4ZE) If only part of the pension is attributable to pensionable service or, as the case may be, to payments in respect of employment carried on on or after the appointed day, in subsections (3) to (4ZD) references to the annual rate of the pension are references to so much of that rate as is attributable to that part c.26 (see SD 501/97). 21 Subsection (4) amended by section 278(4) of the Pensions Act 2007 c.22 (see SD 193/09). ih

13 Pensions Act 2011 c.19 (4ZF) For the purposes of subsections (4) and (4ZB) the default percentage for a period is the percentage for that period which corresponds to (a) in the case of a category X pension, 5% per annum, and (b) in the case of a category Y pension, 2.5% per annum. (4ZG) In subsections (4) and (4ZB)- "UK consumer prices index" means (a) the general index of consumer prices (for all items) published by the Statistics Board, or (b) where that index is not published for a month, any substituted index or figures published by the Board; "UK retail prices index" means (a) the general index of retail prices (for all items) published by the Statistics Board, or (b) where that index is not published for a month, any substituted index or figures published by the Board.". (9) Section 40 of the Welfare Reform and Pensions Act (indexation of certain pensions giving effect to pension credit rights) is amended as follows. (10) In subsection (1)23 for "increases in the retail prices index" substitute "relevant percentage increases". (11) After subsection (2A)24 insert- "(2AA) In subsection (1) "relevant percentage increases for the United Kingdom" means percentage increases estimated by the Secretary of State from time to time for the purposes of paragraph 2(3)(a) of Schedule 3 to the Pension Schemes Act 1993 for revaluation periods of 12 months.". (11A) In subsection (3) omit the definition of "retail prices index for the United Kingdom"25. Pension compensation: annual increases in periodic compensation 20. Omitted. Indexation requirements for cash balance benefits 21. (1) Section 51 of the Pensions Act 1995 (annual increase in rate of certain pensions) is amended as follows. (2) In subsection (1)26 for "subsection (6)" substitute "subsections (6) and (7)". (3) After subsection (6)27 insert c.30 (see SD 291/01) 23 Subsection (1) amended by section 280(2) of the Pensions Act 2004 c.35 (see SD 220/05). 24 Subsection (2A) inserted by section 280(4) of the Pensions Act 2004 c.35 (see SD 220/05). 25 Definition inserted by article 2 of SD 462/ Subsection (1) amended by section 278 of the Pensions Act 2004 c.35 (see SD 220/05). 27 Subsection (6) amended by paragraph 51 of Schedule 12 to the Welfare Reform and Pensions Act 1999 c.30 (see SD 291/01). 13

14 Pensions Act 2011 c. 19 "(7) This section does not apply to any pension (or part of a pension) under a relevant occupational pension scheme which (a) is a cash balance benefit (see section 51ZB), and (b) first comes into payment on or after the day on which section 21 of the Pensions Act 2011 comes into force. (8) An occupational pension scheme is a "relevant occupational pension scheme" if (a) it has not, on or after the appointed day28, been contracted-out by virtue of satisfying section 9(2) of the Pension Schemes Act 1993, or (b) it has, on or after the appointed day, been so contracted-out, but no person is entitled to receive, or has accrued rights to, benefits under the scheme attributable to the period on or after that day when it was so contracted-out.". (4) After section 51ZA29 of the Pensions Act 1995 insert- "51ZB Meaning of "cash balance benefit" (1) For the purposes of section 51(7)(a), a pension provided to or in respect of a member of an occupational pension scheme is a "cash balance benefit" if conditions 1 and 2 are met. (2) Condition 1 is that the rate of the pension is calculated by reference to a sum of money ("the available sum") which is available under the scheme for the provision of benefits to or in respect of the member. (3) Condition 2 is that under the scheme (a) there is a promise about the amount of the available sum, but (b) there is no promise about the rate or amount of the benefits to be provided. (4) The promise mentioned in subsection (3)(a) includes in particular a promise about the change in the value of, or the return from, payments made under the scheme by the member or by any other person in respect of the member. (5) The promise mentioned in subsection (3)(b) includes a promise that (a) the amount of the available sum will be sufficient to provide benefits of a particular rate or amount; (b) the rate or amount of a benefit will represent a particular proportion of the available sum. (6) But a pension is not prevented from being a cash balance benefit merely because under the scheme there is a promise that- 28 See section 54(3) of the Pensions Act 1995 c.26 (see S.D. 501/97) for the definition of "the appointed day". 29 Section 51ZA inserted by section 278(7) of the Pensions Act 2004 c.35 (see SD 220/05).

15 Pensions Act 2011 c.19 Pension Protection Fund 22. Omitted. (a) the rate or amount of a benefit payable in respect of a deceased member will be a particular proportion of the rate or amount of a benefit which was (or would have been) payable to the member; (b) the amount of a lump sum payable to a member, or in respect of a deceased member, will represent a particular proportion of the available sum.". Pension Protection Fund Financial assistance scheme Financial assistance scheme: amount of payments 23. Omitted. Financial assistance scheme: transfer of assets 24. Omitted. Miscellaneous Payment of surplus to employer: transitional power to amend scheme 25. Omitted. Contribution notices and financial support directions 26. Omitted. Technical amendment to Schedule 4 to the Pensions Act In Schedule 4 to the Pensions Act (abolition of contracting-out for defined contribution pension schemes) in paragraph 60(4)31 for paragraphs (b) and (c) substitute "(b) in the definition of "the percentage for contributing earners"32 (i) omit the words "(a) in relation to a salary related contractedout scheme,"; (ii) omit paragraph (b) and the preceding "and"; (c) in the definition of "the percentage for non-contributing earners 33 (i) omit the words "(a) in relation to a salary related contractedout scheme, ; (ii) omit paragraph (b) and the preceding "and"." c.22 (see SD 193/09) 31 Paragraph 60(4) amended paragraph 2(5) of Schedule 4 to the Pension Schemes Act 1993 c.48 (see SD 531/95). 32 Definition of "the percentage for contributing earners" substituted by paragraph 60(4)(b) of Schedule 4 to the Pensions Act 2007 c.22 (see SD 193/09). 33 Definition of "the percentage for non-contributing earners" substituted by paragraph 60(4)(c) of Schedule 4 to the Pensions Act 2007 c.22 (see SD 193/09). I 5

16 Pensions Act 2011 c.19 Technical amendment to section 42(6) of the Pension Schemes Act Omitted. Definition of money purchase benefits PART 4 MONEY PURCHASE BENEFITS 29. (1) In section 181 of the Pension Schemes Act 1993 (interpretation), in the definition of "money purchase benefits"34 in subsection (1), for "which are not average salary benefits" substitute "which fall within section 181B". (2) After section 181A35 of that Act insert "Money purchase benefits: supplementary 181B. (1) This section applies for the purposes of the definition of "money purchase benefits" in section 181(1). (2) A benefit other than a pension in payment falls within this section if its rate or amount is calculated solely by reference to assets which (because of the nature of the calculation) must necessarily suffice for the purposes of its provision to or in respect of the member. (3) A benefit which is a pension in payment falls within this section if (a) its provision to or in respect of the member is secured by an annuity contract or insurance policy made or taken out with an insurer, and (b) at all times before coming into payment the pension was a benefit falling within this section by virtue of subsection (2). (4) For the purposes of subsection (2) it is immaterial if the calculation of the rate or amount of the benefit includes deductions for administrative expenses or commission. (5) In this section references to a pension do not include withdrawal of funds in accordance with section 4A36 or 6A37 of the Income Tax Act (of Tynwald) (withdrawal of funds during lifetime of member and withdrawal of funds after death of member).". (3) to (6) Omitted. (7) The amendments made by subsections (1) and (2) are to be regarded as having come into force on 1 January (8) Omitted. Transitional 30. Omitted. 34 Definition of "money purchase benefits" amended by paragraph 18 of Part 3 of the Schedule to SI 2005/2053 (see SD 745/05). 5 Section 181A inserted by paragraph 35 of Schedule 4 to the Pensions Act 2007 c.22 (see SD 193/09) from "the abolition date" (see section 15 of the Pensions Act 2007). 36 Section 4A was inserted by section 2(3) of the Income Tax (Pensions) Act 2008 c Section 6A was inserted by section 2(5) of the Income Tax (Pensions) Act 2008 c c.10 16

17 Pensions Act 2011 c.19 Consequential and supplementary 31. Omitted. Power to make further provision 32. Omitted. Regulations 33. Omitted. PART 5 JUDICIAL PENSIONS Contributions towards cost of judicial pensions etc 34. Omitted. PART 6 MISCELLANEOUS AND GENERAL Miscellaneous Grants by the Secretary of State to advisory bodies etc 35. Omitted. Service of documents and electronic working 36. Omitted. General Extent 37. Omitted. Commencement 38. Omitted. Short title 39. This Act may be cited as the Pensions Act 2011.

18 Pensions Act 2011 c.19 SCHEDULES SCHEDULE 1 Section 1 EQUALISATION OF AND INCREASE IN PENSIONABLE AGE FOR MEN AND WOMEN: CONSEQUENTIAL AMENDMENTS Gas Act 1986 (c. 44) 1. Omitted. Social Security Administration Act 1992 (c. 5) 2. to 5. Omitted. Pensions Act 1995 (c. 26) 6. In section 126 of the Pensions Act 1995 (equalisation of and increase in pensionable age etc) in paragraph (a)39 for the words from "progressively" (where it appears first) to the end of the paragraph substitute "and then to increase it". Consumers, Estate Agents and Redress Act 2007 (c. 17) 7. Omitted. Pensions Act 2007 (c. 22) 8. The Pensions Act 2007 is amended as follows. 9. In section 13 (increase in pensionable age for men and women) (a) in subsection (1) omit from "progressively" to the end; (b) in subsection (3) for "6th April 2024" substitute "6th December 2018". 10. In Schedule 3 (increase in pensionable age for men and women) omit paragraph 4(4)4. SCHEDULE 2 Section 2 ABOLITION OF CERTAIN ADDITIONS TO THE STATE PENSION: CONSEQUENTIAL AMENDMENTS ETC Social Security Contributions and Benefits Act 1992 (c. 4) 1. The Social Security Contributions and Benefits Act 1992 is amended as follows. 2. In section 5541 (pension increase or lump sum where entitlement to retirement pension is deferred) in subsection (2) for "paragraphs 4 to 7 make" substitute "paragraph 4 makes". 39 Paragraph (a) amended by paragraph 2 of Schedule 3 to the Pensions Act 2007 c.22 (see SD 193/09). 4 Paragraph 4(4) substituted for paragraph 1(4) of Schedule 4 to the Pensions Act 1995 c.26 (see SD 501/97). 41 Section 55 substituted by section 297 of the Pensions Act 2004 c.35 (see SD 220/05) and amended by paragraph 3 of the Schedule to SI 2005/2053 (see SD 655/05). 18

19 Pensions Act 2011 c (1) Schedule 5 (pension increase or lump sum where entitlement to retirement pension is deferred) is amended as follows. (2) Omit paragraph A1(4)42. (3) In paragraph 2(5)(a)43 omit ", 5, 5A, 6 or 6A". (4) Omit paragraph 2A44. (5) ht paragraph 3B(5)(b)(i)45 omit "or paragraphs 5 to 6A of this Schedule". (6) Omit paragraph 3C(5)46. (7) In paragraph 4(1A)47 after "6A" (in each place) insert "(as those provisions have effect by virtue of section 2(7) of the Pensions Act 2011)". (8) In paragraph 7B(5)(b)( i)48 after "Schedule" insert "(as those provisions have effect by virtue of section 2(7) of the Pensions Act 2011)". Repeals of spent enactments 4. The following provisions are repealed- (a) paragraph 40 of Schedule 1 to the Social Security (Incapacity for Work) Act 1994,9; (b) paragraph 21(15) and (16) of Schedule 4 to the Pensions Act ; (c) paragraph 7 of Schedule 11 to the Pensions Act ; (d) paragraph 20 of Schedule 1 to the Pensions Act Paragraph Al inserted by paragraph 4 of Part 1 of Schedule 11 to the Pensions Act 2004 c.35 (see SD 68/05) and paragraph Al (4) amended by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05). 43 Paragraph 2(5)(a) amended by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05). 44 Paragraph 2A inserted by paragraph 7 of Part 1 of Schedule 11 to the Pensions Act 2004 c.35 (see SD 68/05) and amended by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05). 45 Paragraph 3B inserted by paragraph 8 of Part 1 of Schedule 11 to the Pensions Act 2004 c.35 (see SD 220/05) and amended by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05). 46 Paragraph 3C inserted by paragraph 9 of Part 1 of Schedule 11 to the Pensions Act 2004 c.35 (see SD 68/05) and amended by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05). 47 Paragraph 4(1A) substituted by paragraph 10 of Part 1 of Schedule 11 to the Pensions Act 2004 c.35 (see SD 68/05) and amended by paragraph 5of the Schedule to SI 2005/2053 (see SD 655/05). 48 Paragraph 7B inserted by paragraph 11 of Part 1 of Schedule 11 to Pensions Act 2004 c.35 (see SD 220/05) and amended by paragraph 5 of the Schedule to SI 2005/2053 (see SD 655/05). 49 Paragraph 40 amends paragraph 7(1)(a) of Schedule 5 to the Social Security Contributions and Benefits Act 1992 c.4 (see SD 505/94). 5 Paragraph 21(15) substituted paragraphs 5, 5A and 6 of Schedule 5 to the Social Security Contributions and Benefits Act 1992 c.4 (see SD 505/94). 51 Paragraph 7 inserted paragraph 2A into Schedule 5 to the Social Security Contributions and Benefits Act 1992 c.4 (see SD 505/94). 52 Paragraph 20 amended paragraph 5A(3)(a), 6(4)(b) and 6A(2)(b) of Schedule 5 to the Social Security Contributions and Benefits Act 1992 c.4 (see SD 505/94). 19

20 Pensions Act 2011 c.19 SCHEDULE 3 Section 3 CONSOLIDATION OF ADDITIONAL PENSION Social Security Contributions and Benefits Act 1992 (c. 4) 1. The Social Security Contributions and Benefits Act 1992 is amended as follows. 2. (1) Section 45 (the additional pension in a Category A retirement pension) is amended as follows. (2) In subsection (2) (as amended by section 102(3) of the Pensions Act ) for "6th April 2020" substitute "a date specified for the purposes of this subsection by order ("the specified date")". (3) In subsection (2A) (as inserted by section 102(4) of the Pensions Act 2008)- (a) in the opening words for "a tax year after 5th April 2020" substitute "the tax year beginning with the specified date or a subsequent tax year"; (b) in paragraph (a) for "flat rate introduction" substitute "additional pension consolidation"; (c) for paragraph (b) substitute "(b) in relation to the additional pension consolidation year and subsequent years, the weekly equivalent of the amount calculated in accordance with Schedule 4B to this Act.". 3. In section 46 (modifications of section 45 for calculating the additional pension in certain benefits) in subsection (5)(a) (as inserted by paragraph 6(3) of Schedule 4 to the Pensions Act 2008) for "6th April 2020" substitute "a date specified for the purposes of this subsection by order ("the specified date")". 4. In section 122(1) (interpretation of Parts 1 to 6) insert at the appropriate place 5. Omitted. ""the additional pension consolidation year" means such tax year as may be designated as such by order;". 6. (1) Schedule 4B54 (additional pension: accrual rates for purposes of section 45(2)(d)) is amended as follows. (2) In paragraph 1- (a) in sub-paragraph (1) in the opening words after "45(2)(d)" insert "or (2A)(b)"; (b) in sub-paragraphs (1)(a) and (b) and (2) after "45(2)(d)" insert "or (2A)(b) (as the case may be)". (3) In paragraph 11 after "45(2)(d)" insert "or (2A)(b)". 7. (1) Schedule 4C (additional pension: calculation of revalued consolidated amount) (as inserted by Schedule 3 to the Pensions Act ) is amended as follows. 53 See SD 193/09 54 Schedule 4B inserted by paragraph 1 of Schedule 2 to the Pensions Act 2007 c.22 (see SD 193/09). 55 See SD 851/09

21 Pensions Act 2011 c.19 (2) In paragraphs 1 and 2 for "flat rate introduction" substitute "additional pension consolidation". (3) Omit paragraph 3. (4) In paragraphs 5(b) and 7(1) for "and (c)" (in each place) substitute ", (c) and (d)". (5) In paragraph 6 for "6th April 2020" substitute "the date specified for the purposes of section 45(2) of this Act". (6) In paragraph 7(1) for "6th April 2020" substitute "the date specified for the purposes of section 45(2)". (7) In paragraph 7(2) (a) in paragraph (b) after "2(2)(b)," insert "5(2)(b),"; (b) after paragraph (b) insert "(c) in Schedule 4B, paragraphs 4, 5(b), 8(3), 9(2)(b) and (3) and 10(1)(b).". (8) After paragraph 7(2) insert "(3) Paragraph 1(1) of Schedule 4B applies as if a reference to the relevant years within section 45(2)(d) were a reference to the relevant years falling within the period beginning with the flat rate introduction year and ending immediately before the consolidation date.". Social Security Administration Act 1992 (c. 5) 8. Omitted. Pension Schemes Act 1993 (c. 48) 9. The Pension Schemes Act 1993 is amended as follows. 10. In section 46 (effect of entitlement to guaranteed minimum pensions on payment of social security benefits) in subsection (1A) (as inserted by section 103(2) of the Pensions Act 2008) for "in tax year after 5th April 2020" substitute "on or after the date specified for the purposes of section 45(2) of that Act". 11. In section 46A (retirement in tax year after 5th April 2020) (as inserted by section 103(3) of the Pensions Act )- (a) in subsection (1)(c) for "in tax year after 5th April 2020" substitute "on or after the date specified for the purposes of section 45(2) of that Act"; (b) in the heading for "in tax year after 5th April 2020" substitute "on or after the specified date". Pensions Act 2008 (c. 30) 12. The Pensions Act 2008 is amended as follows. 13. In section 102 (consolidation of additional pension) in subsection (7)57 for "6th April 2020" substitute "the date specified for the purposes of section 45(2) of the 1992 Act". 56 See SD 851/09 57 Subsection (7) amended by substituted by article 3 of SD 342/10. 21

22 Pensions Act 2011 c. 19 SCHEDULE 4 PENSION PROTECTION FUND Omitted.

23 EXPLANATORY NOTE (This note is not part of the Order) 1. Section 1 of the Social Security Act 2000 and section 1 of the Pension Schemes Act 1995 (both Acts of Tynwald) enable the Department of Social Care ("the DSC") by order to apply to the Isle of Man as part of the law of the Isle of Man (incorporating such exceptions, adaptations and modifications as are appropriate) any legislation of the United Kingdom Parliament to which section 1 of each Act applies (subject to section 1(1A) of the 2000 Act). 2. Following the making of the Pension Schemes Order 2011 (SD 1080/11) and the Social Security Act 2000 (Amendment) Order 2011 (SD 1079/11), section 1 of both Acts mentioned applies to certain provisions of the Pensions Act 2011 (of Parliament) and to any statutory instrument made (or having effect as if made) under those provisions. 3. This Order now applies to the Island the appropriate provisions of the Pensions Act 2011 ("the Act"). A summary of the Act and an explanation of each applied provision follow. Reference below to any Act other than the Act is to that Act of Parliament as it has effect in the Isle of Man. The provisions of the Act applied to the Island by this Order come into operation at the same time as they do so in Great Britain (see article 2). 4. Summary of the Act 4.1 The Act has six Parts, but only provisions found in Parts 1, 3, 4 and 6 are being applied to the Island by this Order. The Act's other measures - in particular those found in Parts 2 and 5 (automatic enrolment into workplace pensions and judicial pensions) - are not relevant in the Island and are therefore not being applied to the Island by this Order Part 1 of the Act (made up of sections 1 to 3 and Schedules 1 to 3) contains amendments to three aspects of the State pension Section 1 and Schedule 1 amend the existing timetable prescribed in legislation for increasing State pension age. State pension age for men and women will now rise from 65 to 66 between April 2018 and April 2020 rather than between April 2024 and April To enable the increase in State pension age to 66, from 2016 the timetable for equalising women's State pension age with men's at 65 is brought forward. Women's State pension age will now reach 65 in 2018 rather than in April Consequential amendments to legislation specifying State pension age as being the qualifying age for certain benefits are also made. 23

24 4.2.3 Section 2 and Schedule 2 abolish new awards of small "top-up" amounts (called "Payable Uprated Contracted-out Deduction Increments") to a person's state pension from 6 April 2012 where that person has delayed taking their pension under a salary-related contracted-out scheme and earned "increments" on their Guaranteed Minimum Pension (GMP). The changes are made because the policy intent of ensuring parity in the matter of deferring pensions between persons who have contracted out of the additional state pension and persons who have not has been eroded by subsequent changes to the State Pension and contracted-out benefits Section 3 and Schedule 3 remove references in existing legislation to the date planned for the start of the consolidation of the additional state pension as being "the flat-rate introduction year" and replace it with a power to set the date by order. For these purposes the "additional pension" includes graduated retirement benefit, State Earnings Related Pension (SERPS) and State Second Pension (S2P). Provision for consolidating the additional pension of persons who reach State pension age on or after 6 April 2020 only is also removed. This change takes account of the fact that men's and women's State pension age will now be the same in 2018 rather than in 2020 as originally anticipated. 4.3 Part 3 contains amendments to pensions legislation relating to the indexation of defined benefit pensions in payment and the revaluation of the deferred pensions of early leavers from occupational pension schemes. The changes are made following the UK Government's decision to use the UK Consumer Prices Index (CPI) as the measure of increase in the general level of prices in place of the UK Retail Prices Index (RPI). The changes made address references to UK RPI appearing in legislation and ensure that occupational pension schemes are not required to increase pensions in payment by the higher of UK RPI and UK CPI, giving consistency with the revaluation of pension benefits provided by other recent changes to legislation (section 19). Part 3 also removes the requirement for cash balance pension benefits to be indexed, allowing members of such schemes to purchase any type of annuity they want on the open market and makes minor technical amendments to previous pension legislation (section 21). A technical amendment is made by section 27 to Schedule 4 to the Pensions Act 2007 to correct an inaccurate consequential amendment made to Schedule 4 to the Pension Schemes Act 1993, which also appears in Part 3. 24

25 4.4 Part 4 contains measures to amend the definition of "money purchase benefits" as it appears in pensions legislation, following a recent UK Supreme Court judgment (section 29). The amendments make it clear that only pension benefits which cannot develop a deficit in their funding (unlike a scheme paying final salary benefits) can be regarded in law as providing money purchase benefits. Therefore a scheme providing money purchase benefits cannot be subject to the statutory order of priority of beneficiaries if the scheme is underfunded when it is wound up. A scheme pension in payment must also be backed by an annuity contract or insurance policy to qualify as a money purchase benefit. The amendments made by section 29 are to be regarded as having come into force on 1st January 1997, when the relevant provisions of the Pensions Act 1995 of Parliament came into operation. 4.5 Part 6 contains section 39 (the Act's short title). 25

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