# Pensions Act 2014

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U.K.

# Pensions Act 2014

# 2014 CHAPTER 19

An Act to make provision about pensions and about benefits payable to people in connection with bereavement; and for connected                        purposes.                     

[14th May 2014]

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:—                        

## **Part 1**E+W+SState pension

### IntroductionE+W+S

#### 1State pensionE+W+S

### State pension at the full or reduced rateE+W+S

#### 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

### State pension at the transitional rateE+W+S

#### 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 5Transitional rate of state pensionE+W+S

#### 6Recalculation and backdating of transitional rate in special casesE+W+S

### Transitional entitlement based on contributions of othersE+W+S

#### 7Survivor's pension based on inheritance of additional old state pensionE+W+S

#### 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

### Transition: women who have had a reduced rate electionE+W+S

#### 11Reduced rate elections: effect on section 4 pensionsE+W+S

#### 12Reduced rate elections: pension for women with no section 4 pensionE+W+S

### Transition: pension sharing on divorce etcE+W+S

#### 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

### Postponing or suspending state pensionE+W+S

#### 16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

### Prisoners and overseas residentsE+W+S

#### 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

### DefinitionsE+W+S

#### 21“Old state pension”E+W+S

#### 22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

### Consequential and other amendmentsE+W+S

#### 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

## **Part 2**E+W+SOption to boost old retirement pensions

### 25Option to boost old retirement pensionsE+W+S

In Schedule 15—
          -  Part 1 contains amendments to allow certain people to pay additional contributions to boost their retirement pensions; 
          -  Part 2 contains amendments to allow corresponding legislation to be put in place for Northern Ireland. 

## **Part 3**E+W+SPensionable age

### 26Increase in pensionable age to 67E+W+S

(1)Paragraph 1 of Schedule 4 to the Pensions Act 1995 is amended as follows.                  

(2)In sub-paragraph (6) for “6th April 1968” substitute “ 6th April 1960 ”.                  

(3)For sub-paragraph (7) and table 3 substitute—                  

“(7)A person born on any day in a period mentioned in column 1 of table 3 attains pensionable age when the person attains the                           age shown against that period in column 2.                  

#### TABLE 3

(7A)For the purposes of table 3—                  

(a)a person born on 31st July 1960 is to be taken to attain the age of 66 years and 4 months at the commencement of 30th November                           2026;                  

(b)a person born on 31st December 1960 is to be taken to attain the age of 66 years and 9 months at the commencement of 30th                           September 2027;                  

(c)a person born on 31st January 1961 is to be taken to attain the age of 66 years and 10 months at the commencement of 30th                           November 2027.”                  

(4)In sub-paragraph (8) for “5th April 1969” substitute “ 5th March 1961 ”.                  

### 27Periodic review of rules about pensionable ageE+W+S

(1)The Secretary of State must from time to time—                  

(a)review whether the rules about pensionable age are appropriate, having regard to life expectancy and other factors that the                        Secretary of State considers relevant, and                  

(b)prepare and publish a report on the outcome of the review.                  

(2)The first report must be published before 7 May 2017.                  

(3)Each subsequent report must be published before the end of the period of 6 years beginning with the day on which the previous                        report was published.                  

(4)For the purposes of each review, the Secretary of State must require the Government Actuary or Deputy Government Actuary to                        prepare a report for the Secretary of State on—                  

(a)whether the rules about pensionable age mean that, on average, a person who reaches pensionable age within a specified period                        can be expected to spend a specified proportion of his or her adult life in retirement, and                  

(b)if not, ways in which the rules might be changed with a view to achieving that result.                  

(5)The Secretary of State must, for the purposes of a review, appoint a person or persons to prepare a report for the Secretary                        of State on other specified factors relevant to the review.                  

(6)The Secretary of State must lay before Parliament any report prepared under this section.                  

(7)For the purposes of subsection (4)—                  

(a)a person's adult life is the part of the person's life after he or she reaches the specified age;                  

(b)the proportion of a person's adult life spent in retirement is the proportion of his or her adult life spent after reaching                        pensionable age.                  

(8)In this section—                  
          -  “pensionable age” has the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995 (and “the rules about pensionable age” means those rules);                         
          -  “specified” means specified by the Secretary of State.                         

## **Part 4**E+W+SState pension credit

### 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

### 29Preserving indefinite status of certain existing assessed income periodsE+W+S

(1)If this section comes into force before 6 April 2014—                  

(a)section 105(6) of the Pensions Act 2008 (which provides that section 9(6) of the State Pension Credit Act 2002 ceases to have                        effect on 6 April 2014) is repealed, and                  

(b)in section 9(6)(a) of the State Pension Credit Act 2002 (duration of assessed income period for certain transitional cases                        to be treated as indefinite), after “brought to an end” insert “ , on or after 6 April 2009 but before 6 April 2014, ”.                  

(2)If this section comes into force on or after 6 April 2014—                  

(a)section 105(6) of the Pensions Act 2008 (which provides that section 9(6) of the State Pension Credit Act 2002 ceases to have                        effect on 6 April 2014) is repealed and is to be treated as never having had effect, and                  

(b)in section 9(6)(a) of the State Pension Credit Act 2002 (duration of assessed income period for certain transitional cases                        to be treated as indefinite) as restored by this section, after “brought to an end” insert “ , on or after 6 April 2009 but before 6 April 2014, ”.                  

## **Part 5**E+W+SBereavement support payment

### 30Bereavement support paymentE+W+S

### 31Bereavement support payment: contribution condition and amendmentsE+W+S

### 32Bereavement support payment: prisonersE+W+S

## **Part 6**E+W+SPrivate pensions

### Transfer of pension benefitsE+W+S

#### 33Automatic transfer of pension benefits etcE+W+S

#### 34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  

#### 35Expiry of power in section 34E+W+S

#### 36Short service benefit for scheme member with money purchase benefitsE+W+S

### Automatic enrolmentE+W+S

#### 37Automatic re-enrolment: exceptions where automatic enrolment deferredE+W+S

#### 38Automatic enrolment: powers to create general exceptionsE+W+S

#### 39Alternative quality requirements for UK defined benefits schemesE+W+S

#### 40Automatic enrolment: transitional period for hybrid schemesE+W+S

#### 41Penalty notices under sections 40 and 41 of the Pensions Act 2008 etcE+W+S

#### 42Unpaid scheme contributionsE+W+S

### OtherE+W+S

#### 43Power to restrict charges or impose requirements in relation to schemesE+W+S

#### 44Disclosure of information about transaction costs to members etcE+W+S

#### 45Power to require pension levies to be paid in respect of past periodsE+W+S

#### 46Prohibition and suspension orders: directors of corporate trusteesE+W+S

#### 47Preparation of guidance for pensions illustrationsE+W+S

#### 48Pensions Regulator's objectivesE+W+S

#### 49Maximum period between scheme returns to be 5 years for micro schemesE+W+S

#### 50Pension Protection Fund: increased compensation cap for long serviceE+W+S

#### 51Pension Protection Fund: compensation cap to apply separately to certain benefitsE+W+S

#### 52Public service pension schemes: transitional arrangementsE+W+S

## **Part 7**U.K.Final provisions

### 53Power to make consequential amendments etcU.K.

(1)The Secretary of State or the Treasury may by order make consequential, incidental or supplementary provision in connection                        with any provision made by this Act.                  

(2)An order under this section may amend, repeal, revoke or otherwise modify any enactment (whenever passed or made).                  

(3)“Enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978.                  

### 54Regulations and ordersU.K.

(1)Regulations and orders under this Act are to be made by statutory instrument.                  

(2)A statutory instrument containing (whether alone or with other provisions)—                  

(a)regulations under section 3, 17, 18(3) or (5), 19, 20, 30, 32 or 34,                  

(b)the first regulations under section 10,                  

(c)an order under section 53 that amends or repeals a provision of an Act,                  

(d)regulations under Schedule 17,                  

(e)regulations under paragraph 2 of Schedule 18 or regulations under paragraph 7 of that Schedule that amend a provision of an                        Act, or                  

(f)the first regulations under paragraph 1 or 3 of that Schedule,                  

may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(3)Any other statutory instrument containing regulations or an order under this Act is subject to annulment in pursuance of a                        resolution of either House of Parliament.                  

(4)Subsection (3) does not apply to a statutory instrument containing an order under section 56(1), (6) or (8) only.                  

(5)A power to make regulations or an order under this Act may be used—                  

(a)to make different provision for different purposes;                  

(b)in relation to all or only some of the purposes for which it may be used.                  

(6)Regulations or orders under this Act may include incidental, supplementary, consequential, transitional, transitory or saving                        provision.                  

### 55ExtentU.K.

(1)This Act extends to England and Wales and Scotland only, subject to the following provisions of this section.                  

(2)Any amendment or repeal made by this Act has the same extent as the enactment to which it relates.                  

(3)This Part extends also to Northern Ireland.                  

### 56CommencementU.K.

(1)This Act comes into force on such day or days as the Secretary of State may by order appoint, subject as follows.                  

(2)The following come into force on the day on which this Act is passed—                  

(a)section 29;                  

(b)section 51;                  

(c)this Part.                  

(3)The following come into force at the end of the period of 2 months beginning with the day on which this Act is passed—                  

(a)Part 3 ;                  

(b)sections 34 and 35;                  

(c)section 41;                  

(d)sections 47 and 48;                  

(e)paragraph 30(2) of Schedule 13.                  

(4)Part 1 comes into force on 6 April 2016, so far as not brought into force earlier by an order under subsection (1).                  

(5)The Secretary of State may by order—                  

(a)amend subsection (4) so as to replace the reference to 6 April 2016 with a later date, and                  

(b)make corresponding amendments in Part 1 or any enactment amended by it.                  

(6)Section 52 comes into force on such day or days as the Treasury may by order appoint.                  

(7)An order under subsection (1) or (6) may appoint different days for different purposes.                  

(8)The Secretary of State may by order make transitional, transitory or saving provision in connection with the coming into force                        of any provision of this Act.                  

### 57Short titleU.K.

This Act may be cited as the Pensions Act 2014.

# SCHEDULES

 Section 5

## SCHEDULE 1E+W+STransitional rate of state pension: calculating the amount

### **Part 1**E+W+SIntroduction

1(1)This Schedule sets out how to calculate the amounts used to work out the transitional rate of a person's state pension.E+W+S

(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 2**E+W+SAmount for pre-commencement qualifying years

#### How to calculate the amount for pre-commencement qualifying yearsE+W+S

2E+W+SA 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 systemE+W+S

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—E+W+S

(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 systemE+W+S

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.E+W+S

(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—

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—E+W+S

(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: revaluationE+W+S

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.E+W+S

(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 3**E+W+SAmount for post-commencement qualifying years

7(1)A person's amount for post-commencement qualifying years (if any) is calculated as follows.E+W+S

(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—

 Section 5

## SCHEDULE 2E+W+STransitional rate of state pension: up-rating

1E+W+SThis Schedule sets out how to up-rate the transitional rate of a person's state pension.

2E+W+SIn 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.E+W+S

(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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

 Section 7

## SCHEDULE 3E+W+SSurvivor's pension under section 7: inherited amount

### IntroductionE+W+S

1E+W+SThis 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 etcE+W+S

2(1)A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—E+W+S

(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—E+W+S

(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—E+W+S

(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 systemE+W+S

5(1)A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—E+W+S

(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—E+W+S

(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—E+W+S

(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)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 day of the death.

8(1)A pensioner whose spouse or civil partner has died is entitled to an inherited amount under this paragraph if—E+W+S

(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.

### SupplementaryE+W+S

9E+W+SWhen 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.

 Section 7

## SCHEDULE 4E+W+SSurvivor's pension under section 7: up-rating

### IntroductionE+W+S

1E+W+SThis Schedule sets out how to up-rate the rate of a person's state pension under section 7.

2E+W+SIn 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.

3E+W+SIn 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 rateE+W+S

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.E+W+S

(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 rateE+W+S

5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

Prospective

### Priority pension alone is equal to or higher than the full rateE+W+S

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.E+W+S

(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.

Modifications etc. (not altering text)

C1Sch. 4 para. 6 sums amended (with effect in accordance with arts. 1(4), 7 of the amending S.I.) by The Social Security Benefits Up-rating Order 2017 (S.I. 2017/260), arts. 1(2)(c), **6(4)(c)**

C2Sch. 4 para. 6 sums amended (with effect in accordance with arts. 1(3)(4), 7 of the amending S.I.) by The Social Security Benefits Up-rating Order 2018 (S.I. 2018/281), arts. 1(2)(c), **6(4)(c)**

 Section 9

## SCHEDULE 5E+W+SSurvivor's pension under section 9: inherited deferral amount

### IntroductionE+W+S

1E+W+SThis 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 increaseE+W+S

2(1)A pensioner whose spouse or civil partner has died is entitled to an inherited deferral amount under this paragraph if—E+W+S

(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 deathE+W+S

3(1)A pensioner whose spouse or civil partner has died is entitled to an inherited deferral amount under this paragraph if—E+W+S

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

(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 ActE+W+S

4E+W+SFor the purposes of this Schedule “the relevant provisions” of the Contributions and Benefits Act are those mentioned in section                        8(9)(b).

### SupplementaryE+W+S

5E+W+SWhen 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.

 Section 11

## SCHEDULE 6E+W+SReduced rate elections: effect on rate of section 4 pension

### IntroductionE+W+S

1E+W+SThis 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 etcE+W+S

2(1)This paragraph applies to the woman if on reaching pensionable age—E+W+S

(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 etcE+W+S

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.E+W+S

(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 full amount of the basic pension.

(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 changeE+W+S

4E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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)—E+W+S

(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.

6E+W+SNothing 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.

 Section 12

## SCHEDULE 7E+W+SReduced rate elections: basic amount of state pension under section 12

1E+W+SThis 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—E+W+S

(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—E+W+S

(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.

4E+W+SA woman who is entitled to a basic amount under paragraph 3 is not entitled to a basic amount under paragraph 2.

 Section 13

## SCHEDULE 8E+W+SPension sharing: appropriate weekly rate under section 13

### IntroductionE+W+S

1E+W+SThis 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 creditE+W+S

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.E+W+S

(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 creditE+W+S

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.E+W+S

(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.

### SupplementaryE+W+S

4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

 Section 13

## SCHEDULE 9E+W+SPension sharing: up-rating state pension under section 13

### IntroductionE+W+S

1E+W+SThis Schedule sets out how to up-rate the rate of a person's state pension under section 13.

2E+W+SIn 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—E+W+S

(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, 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 rateE+W+S

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.E+W+S

(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 rateE+W+S

5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

### Priority pension alone is equal to or higher than the full rateE+W+S

6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

 Section 14

## SCHEDULE 10E+W+SPension sharing: appropriate weekly reduction under section 14

### IntroductionE+W+S

1E+W+SThis 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 debitE+W+S

2(1)This paragraph sets out the appropriate weekly reduction if the person is subject to an old state scheme pension debit.E+W+S

(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 debitE+W+S

3(1)This paragraph sets out the appropriate weekly reduction if the person is subject to a new state scheme pension debit.E+W+S

(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.

### SupplementaryE+W+S

4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

 Section 15

## SCHEDULE 11E+W+SPension sharing: amendments

### Family Law (Scotland) Act 1985 (c. 37)E+W+S

1E+W+SIn 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 ”.

### Social Security Contributions and Benefits Act 1992 (c. 4)E+W+S

2E+W+SThe Contributions and Benefits Act is amended as follows.

3E+W+SIn section 21 (contribution conditions), in subsection (1), after “section 55A” insert “ or 55AA ”.

4E+W+SIn section 43 (persons entitled to more than one retirement pension), in subsection (6), after “section 55A” insert “ or 55AA ”.

5(1)Section 55A (shared additional pension) is amended as follows.E+W+S

(2)For subsection (1) substitute—

“(1)A person is entitled to a shared additional pension under this section if—                  

(a)the person attained pensionable age before 6 April 2016, and                  

(b)the person is entitled to an old state scheme pension credit.”                  

(3)In subsections (2) and (3), after “shared additional pension” insert “ under this section ”.

(4)In subsections (3), (4), (5) and (7) before “state scheme pension credit” (in each place) insert “ old ”.

(5)At the end of the heading insert “ because of an old state scheme pension credit ”.

6E+W+SAfter section 55A insert—

#### “55AAShared additional pension because of a new state scheme pension credit

7(1)Section 55B (reduction of additional pension in Category A retirement pension: pension sharing) is amended as follows.E+W+S

(2)In subsection (1)(a), for “a” substitute “ an old ”.

(3)In subsection (5), for “55A above” substitute “ 55A or 55AA (as the case may be) ”.

(4)In subsection (8), in the definition of “state scheme pension debit”, before “state” insert “ old ”.

### Social Security Administration Act 1992 (c. 5)E+W+S

8E+W+SIn the Administration Act, after section 148AC (inserted by Schedule 12 to this Act) insert—

#### “148ADRevaluation of new state scheme pension debits and credits

### Welfare Reform and Pensions Act 1999 (c. 30)E+W+S

9E+W+SThe Welfare Reform and Pensions Act 1999 is amended as follows.

10(1)Section 47 (shareable state scheme rights) is amended as follows.E+W+S

(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).”                  

11E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12(1)Section 49 (creation of state scheme pension debits and credits) is amended as follows.E+W+S

(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 ”.

13E+W+SAfter section 49 insert—

#### “49ACreation of debits and credits: transferor in new state pension system and sharing activated on or after 6 April 2016

14(1)Section 51 (interpretation) is amended as follows.E+W+S

(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)E+W+S

15E+W+SIn 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)E+W+S

16E+W+SIn Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions), in paragraph 9(1)(a) and (3), after “section 55A”                        insert “ or 55AA ”.

 Section 23

## SCHEDULE 12E+W+SState pension: amendments

### **Part 1**E+W+SAmendments to do with new state pension system

#### Forfeiture Act 1982 (c. 34)E+W+S

1E+W+SIn 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, ”.

#### Social Security Contributions and Benefits Act 1992 (c. 4)E+W+S

2E+W+SThe Contributions and Benefits Act is amended as follows.

3E+W+SIn section 1 (outline of contributory system), in subsection (1)(a), after “this Act” insert “ or any other Act ”.

4E+W+SIn section 13 (Class 3 contributions), in subsection (2), omit “contribution”.

5E+W+SAfter section 19A insert—

##### “19BExtended meaning of “benefit” etc in Part 1

6(1)Section 22 (earnings factors) is amended as follows.E+W+S

(2)In subsection (2)—

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

(b)after paragraph (b) insert “; and 

(c)establishing entitlement to a state pension under Part 1 of the Pensions Act 2014 and, where relevant, calculating the rate                           of a state pension under that Part.”                  

(3)After subsection (5) insert—

“(5ZA)Regulations may provide for crediting—                  

(a)for 1987-88 or any subsequent tax year, earnings or Class 2 or Class 3 contributions, or                  

(b)for any earlier tax year, contributions of any class,                  

for the purpose of bringing an earnings factor for that tax year to a figure which will make that year a “qualifying year”,                        “pre-commencement qualifying year” or “post-commencement qualifying year” of a person for the purposes of Part 1 of the Pensions                        Act 2014 (see sections 2(4) and 4(4) of that Act).                  

(5ZB)Regulations under subsection (5ZA) must provide for crediting a person with such contributions as may be specified in respect                           of periods on or after 6 April 1975 during which the person was—                  

(a)a spouse or civil partner of a member of Her Majesty's forces,                  

(b)accompanying the member on an assignment outside the United Kingdom, and                  

(c)not of a description specified in the regulations.”                  

7E+W+SIn section 122(1) (interpretation), in the definition of “benefit”, after paragraph (c) insert— “ (For the meaning of “benefit” in Part 1, see also section 19B) ”.

#### Social Security Administration Act 1992 (c. 5)E+W+S

8E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9E+W+SIn section 1 (entitlement to benefit dependent on claim), in subsection (4), after paragraph (za) insert—

“(zb)state pension or a lump sum under Part 1 of the Pensions Act 2014;”.                  

10E+W+SIn section 5 (regulations about claims for and payments of benefits), in subsection (2), after paragraph (za) insert—

“(zb)state pension or a lump sum under Part 1 of the Pensions Act 2014;”.                  

11E+W+SIn section 71 (overpayments - general), in subsection (11), before paragraph (a) insert—

“(za)state pension or a lump sum under Part 1 of the Pensions Act 2014;”.                  

12E+W+SIn section 73 (overlapping benefits - general)—

(a)in subsection (1), after “adjusting” insert “ state pension under Part 1 of the Pensions Act 2014 or ”;

(b)in subsection (4), before paragraph (a) insert—

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

13E+W+SIn section 121DA (interpretation of Part 6), in subsection (1), after paragraph (hk) insert—

“(hl)Part 1 of the Pensions Act 2014;”.                  

14E+W+SIn section 122B (supply of other government information for fraud prevention and verification), in subsection (3)(b), after                        “Part 4 of that Act” insert “ , Part 1 of the Pensions Act 2014 ”.

15E+W+SIn section 124 (age, death and marriage), in subsection (1), after paragraph (ae) insert—

“(af)of the provisions of Part 1 of the Pensions Act 2014; and”.                  

16E+W+SIn section 125 (regulations as to notification of deaths), in subsection (1), after “Part 4 of that Act” insert “ , Part 1 of the Pensions Act 2014 ”.

17E+W+SAfter section 148AB insert—

##### “148ACRevaluation for transitional pensions under Pensions Act 2014

18E+W+SIn section 150 (annual up-rating of benefits), in subsection (1), after paragraph (o) insert—

“(p)which are the increases in the rates of state pensions under section 17 of the Pensions Act 2014;”.                  

19E+W+SIn section 150A (annual up-rating), in subsection (1), before paragraph (a) insert—

“(za)the amount specified in regulations under section 3(1) of the Pensions Act 2014 (full rate of state pension);”.                  

20E+W+SIn section 151 (up-rating: supplementary), in subsection (2)—

(a)for “(dza) or (e)” substitute “ (dza), (e) or (p) ”;

(b)after “order and” insert “— 

(a)”;

(c)at the end insert “, and 

(b)in the case of the sums mentioned in subsection (1)(p) of that section, shall apply only in relation to sums calculated under                           section 17 of the Pensions Act 2014 by reference to periods which have ended before the coming into force of the order.”                  

21E+W+SAfter section 151 insert—

##### “151AUp-rating of transitional state pensions under Pensions Act 2014

22(1)Section 155A (power to anticipate pensions up-rating order) is amended as follows.E+W+S

(2)In subsection (1)(a)—

(a)for “150 or 150A” substitute “ 150, 150A or 151A ”;

(b)in sub-paragraph (i), after “by way of” insert “ state pension under the Pensions Act 2014, ”.

(3)In subsection (2), after “an award is made of” insert “ a state pension, ”.

23(1)Section 163 (general financial arrangements) is amended as follows.E+W+S

(2)In subsection (1), before paragraph (a) insert—

“(za)state pension and lump sums under Part 1 of the Pensions Act 2014;”.                  

(3)In subsection (2)(a), after “Contributions and Benefits Act” insert “ , Part 1 of the Pensions Act 2014 ”.

(4)In subsection (3)(b), after “that Act” insert “ or Part 1 of the Pensions Act 2014 ”.

24E+W+SIn section 170 (Social Security Advisory Committee), in subsection (5)—

(a)in the definition of “the relevant enactments”, after paragraph (al) insert—

“(am)the provisions of Part 1 of the Pensions Act 2014;”;                  

(b)in the definition of “the relevant Northern Ireland enactments”, after paragraph (al) insert—

“(am)any provisions in Northern Ireland which correspond to the provisions of Part 1 of the Pensions Act 2014;”.                  

25(1)Section 179 (reciprocal agreements) is amended as follows.E+W+S

(2)In subsection (3)(a), after “Part 4 of that Act” insert “ , Part 1 of the Pensions Act 2014 ”.

(3)In subsection (4), after paragraph (ah) insert—

“(ai)to Part 1 of the Pensions Act 2014;”.                  

(4)In subsection (5)—

(a)after “Act 2007” insert “ or Part 1 of the Pensions Act 2014 ”;

(b)after paragraph (ac) insert—

“(ad)state pension under Part 1 of the Pensions Act 2014;”.                  

26E+W+SIn section 187 (inalienability), in subsection (1), after paragraph (za) insert—

“(zb)state pension under Part 1 of the Pensions Act 2014;”.                  

27E+W+SIn section 190 (parliamentary control of orders and regulations), in subsection (1)(a) after “150A,” insert “ 151A, ”.

28E+W+SIn section 191 (interpretation), in the definition of “benefit”, after “universal credit,” insert “ state pension under Part 1 of the Pensions Act 2014, ”.

#### Social Security Act 1993 (c. 3)E+W+S

29E+W+SIn section 2 of the Social Security Act 1993 (payments into National Insurance Fund out of money provided by Parliament),                        in subsection (4)(a), after “paragraphs” insert “ (za), ”.

#### Pensions Act 1995 (c. 26)E+W+S

30E+W+SIn 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 ”.

#### Social Security Act 1998 (c. 14)E+W+S

31E+W+SThe Social Security Act 1998 is amended as follows.

32E+W+SIn section 2 (use of computers), in subsection (2)—

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

(b)after paragraph (l) insert—

“(m)Part 1 of the Pensions Act 2014;”.                  

33E+W+SIn section 8 (decisions by Secretary of State)—

(a)in subsection (3), after paragraph (aa) insert—

“(ab)state pension or a lump sum under Part 1 of the Pensions Act 2014;”;                  

(b)in subsection (4), for “or Part 4 of that Act” substitute “ , Part 4 of that Act or Part 1 of the Pensions Act 2014 ”.

34E+W+SIn section 11 (regulations with respect to decisions), in subsection (3), in the definition of “the current legislation”,                        for “and Part 4 of that Act” substitute “ , Part 4 of that Act and Part 1 of the Pensions Act 2014 ”.

35E+W+SIn section 27 (restrictions on entitlement to benefit in certain cases of error), in subsection (7), in the definition of                        “benefit”, after paragraph (f) insert—

“(g)state pension or a lump sum under Part 1 of the Pensions Act 2014.”                  

36E+W+SIn section 28 (correction of errors in decisions etc), in subsection (3)—

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

(b)after paragraph (i) insert “or 

(j)Part 1 of the Pensions Act 2014.”                  

37E+W+SIn Schedule 3 (decisions against which an appeal lies), after paragraph 6B insert—

##### “State pension: prisoners and overseas residentsE+W+S

6CA decision that a state pension under Part 1 of the Pensions Act 2014 is not payable by reason of regulations under section                           19 of that Act (prisoners).

6DA decision that a person is not entitled to increases in the rate of a state pension under Part 1 of the Pensions Act 2014                           by reason of regulations under section 20 of that Act (overseas residents).”

#### Child Support, Pensions and Social Security Act 2000 (c. 19)E+W+S

38(1)Section 42 of the Child Support, Pensions and Social Security Act 2000 (disclosure of state pension information) is amended                        as follows.E+W+S

(2)In subsection (7), after paragraph (a) insert—

“(aa)the amount of any state pension under Part 1 of the Pensions Act 2014 a present or future entitlement to which has already                           accrued to that individual;                  

(ab)a projection of the amount of any state pension under Part 1 of the Pensions Act 2014 to which that individual is likely to                           become entitled, or might become entitled in particular circumstances;”.                  

(3)In subsection (11), in the definition of “lump sum”, after “under” insert “ section 8 of the Pensions Act 2014 or ”.

#### Social Security Fraud Act 2001 (c. 11)E+W+S

39E+W+SThe Social Security Fraud Act 2001 is amended as follows.

40E+W+SIn section 6A (definitions), in subsection (1)—

(a)in the definition of “disqualifying benefit”, after paragraph (za) insert—

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

(b)in the definition of “sanctionable benefit”, before paragraph (b) insert—

“(aa)state pension or a lump sum under Part 1 of the Pensions Act 2014;”.                  

41E+W+SIn section 10 (power to supplement and mitigate loss of benefit provisions), in subsection (3), after paragraph (be) insert—

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

#### State Pension Credit Act 2002 (c. 16)E+W+S

42E+W+SThe State Pension Credit Act 2002 is amended as follows.

43E+W+SIn 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 ”.

44E+W+SIn 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)E+W+S

45E+W+SIn 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)E+W+S

46E+W+SThe Gender Recognition Act 2004 is amended as follows.

47E+W+SIn 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.E+W+S

(2)After paragraph 6 insert—

##### “Pension under Part 1 of the Pensions Act 2014E+W+S

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)E+W+S

49E+W+SThe 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.E+W+S

(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.”                  

51E+W+SIn 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)E+W+S

Prospective

52E+W+S[F1In section 96 of the Welfare Reform Act 2012 (benefit cap), in subsection (11), before paragraph (a) insert—

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

Textual Amendments

F1Sch. 12 para. 52 omitted (16.3.2016 for specified purposes) by virtue of Welfare Reform and Work Act 2016 (c. 7), **ss. 8(7)**, 36(3)

### **Part 2**E+W+SAmendments to do with old state pension system

#### Graduated retirement benefitE+W+S

53(1)Section 36 of the National Insurance Act 1965 (graduated retirement benefit), so far as continuing in force, is amended as                        follows.E+W+S

(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 pensionsE+W+S

54E+W+SThe Contributions and Benefits Act is amended as follows.

55E+W+SIn 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.E+W+S

(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 pensionsE+W+S

57E+W+SThe Contributions and Benefits Act is amended as follows.

58E+W+SIn section 23A (contributions credits for relevant parents and carers), in subsection (1)(b), after “section 48A” insert “ or 48AA ”.

59E+W+SIn section 46 (modification of section 45 for calculating additional pension in certain benefits), in subsection (2), omit                        “48A(4) or” (in both places).

60E+W+SFor section 48A substitute—

##### “48ACategory B retirement pension for married person or civil partner

##### 48AACategory B retirement pension for divorcee or former civil partner

61(1)Section 48B (Category B retirement pension for widows and widowers) is amended as follows.E+W+S

(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.E+W+S

(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.E+W+S

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

(3)In subsection (4), omit “48A(4),”.

64E+W+SFor section 51 substitute—

##### “51Category B retirement pension for widows, widowers and surviving civil partners who attained pensionable age before 6 April                           2010

65E+W+SAfter section 51 insert—

##### “51ZASpecial provision for married person whose spouse changed gender

66E+W+SIn 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.E+W+S

(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.”                  

68E+W+SIn Part 1 of Schedule 4 (rates of certain benefits), in paragraph 5, for “section 48A(3)” substitute “ section 48A(4) or 48AA(4) ”.

69E+W+SIn Schedule 4A (additional pension: accrual rates for purposes of section 45(2)(c)), in paragraph 1(2), omit “, 48A(4)” (in                        both places).

70E+W+SIn 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;”.                  

71E+W+SIn 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,”.

72E+W+SIn section 128 of the Pensions Act 1995 (additional pension: calculation of surpluses), in subsection (6), omit “48A,”.

73E+W+SIn Schedule 4 to the Pensions Act 1995 (equalisation of, and increase in, pensionable age for men and women), omit paragraph                        3(2) and (3).

74E+W+SIn 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 ”.

75E+W+SIn Schedule 24 to the Civil Partnership Act 2004, omit paragraphs 25(6) and 28(6).

76E+W+SIn Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions), in paragraph 8(1)(a) and (3), after “48A,” insert                        “ 48AA, ”.

77E+W+SIn Schedule 4 to the Marriage (Same Sex Couples) Act 2013, omit paragraphs 11, 12, 13 and 16.

#### Category C retirement pensions: repeal of spent provisionsE+W+S

78E+W+SThe Contributions and Benefits Act is amended as follows.

79E+W+SIn 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.E+W+S

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

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

81E+W+SIn 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.

82E+W+SIn 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;”.                  

83E+W+SIn Schedule 5 to the Gender Recognition Act 2004 (benefits and pensions) omit paragraph 11 and the heading above it.

#### Category D retirement pensionsE+W+S

84E+W+SIn 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 additionE+W+S

85E+W+SIn 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 bonusE+W+S

86E+W+SIn 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 marriagesE+W+S

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.E+W+S

(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 3**E+W+SAmendments to do with state pension credit

88E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89E+W+SIn 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).”                  

90E+W+SAfter that section insert—

#### “3ZAPower to limit savings credit for certain mixed-age couples

91E+W+SIn Schedule 1 to the Pensions Act 2007, omit paragraph 44.

### **Part 4**E+W+SOther amendments to do with Part 1

#### Social Security Contributions and Benefits Act 1992 (c. 4)E+W+S

92E+W+SThe Contributions and Benefits Act is amended as follows.

93(1)Section 39C (rate of widowed parent's allowance and bereavement allowance) is amended as follows.E+W+S

(2)In subsection (1), for the words from “45AA” to “as they apply” substitute “ 45AA and Schedules 4A and 4B below as they apply ”.

(3)In subsection (3), for the words from “45AA” to “by virtue of subsection (1) above” substitute “ 45AA and Schedules 4A and 4B below by virtue of subsection (1) above ”.

(4)In subsection (4), for the words from “45AA” to “below” substitute “ 45AA and Schedules 4A and 4B below ”.

94(1)Schedule 5 (pension increase or lump sum where entitlement to retirement pension is deferred) is amended as follows.E+W+S

(2)In the following provisions omit “(as those provisions have effect by virtue of section 2(7) of the Pensions Act 2011)”—
          -  paragraph 4(1A)(a), (b) and (c); 
          -  paragraph 7B(5)(b)(i). 

(3)After paragraph 7 insert—

“7ZA(1)This paragraph modifies paragraphs 5A to 6A in cases where—                  

(a)W became entitled to a Category A or Category B retirement pension before 6 April 2012, and                  

(b)S died before 6 April 2012.                  

(“W” and “S” have the same meaning as in paragraph 5.)                  

(2)Paragraph 5A applies as if—                  

(a)in sub-paragraph (2), after paragraph (a), there were inserted—                  

“(b)the appropriate amount; and”;                  

(b)in sub-paragraph (3), after “following—”, there were inserted—                  

“(a)one half of the appropriate amount; and”.                  

(3)Paragraph 6 applies as if—                  

(a)in sub-paragraph (2), after paragraph (a), there were inserted—                  

“(b)the appropriate amount; and”;                  

(b)in sub-paragraph (3), after paragraph (b), there were inserted—                  

“(c)the appropriate amount reduced by the amount of any increases under section 109 of the Pensions Act; and”;                  

(c)in sub-paragraph (4), after paragraph (a), there were inserted—                  

“(b)one half of the appropriate amount; and”.                  

(4)Paragraph 6A applies as if in sub-paragraph (2), after paragraph (a), there were inserted—                  

“(b)one half of the appropriate amount; and”.                  

(5)In paragraphs 5A to 6A as modified by this paragraph, the “appropriate amount” means the greater of—                  

(a)the amount by which the deceased person's Category A or Category B retirement pension had been increased under section 150(1)(e)                           of the Administration Act; or                  

(b)the amount by which his or her Category A or Category B retirement pension would have been so increased had he or she died                           immediately before the surviving spouse or civil partner became entitled to a Category A or Category B retirement pension.                  

(6)In sub-paragraph (1)(a) the reference to becoming entitled to a pension before 6 April 2012 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.”                  

#### Pension Schemes Act 1993 (c. 48)E+W+S

95E+W+SSection 46A of the Pension Schemes Act 1993 (retirement in tax year after 5 April 2020) is repealed.

#### Pensions Act 2008 (c. 30)E+W+S

96E+W+SIn 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)E+W+S

97E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

 Section 24

## SCHEDULE 13E+W+SAbolition of contracting-out for salary related schemes

### **Part 1**E+W+SPension Schemes Act 1993: amendments

1E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2E+W+SFor “the abolition date” (in each place) substitute “ the first abolition date ”.

3E+W+SIn 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”.

4E+W+SFor the heading to Chapter 1 of Part 3 substitute “ Schemes that were contracted-out: guaranteed minimum pensions and alteration of scheme rules etc ”.

5E+W+SSection 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).

6E+W+SAfter section 7 insert—

#### “7AMeaning of “the first abolition date” and “the second abolition date”

#### 7BMeaning of “contracted-out scheme” and “appropriate scheme” etc.

7(1)Section 8 (meaning of “contracted-out employment”, “guaranteed minimum pension” and “minimum payment”) is amended as follows.E+W+S

(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.”                  

8E+W+SThe italic heading above section 9 is repealed.

9E+W+SSections 9 and 11 (requirements for certification of schemes: general) are repealed.

10E+W+SThe italic heading above section 12A is repealed.

11E+W+SSections 12A to 12D (requirements for certification applying to employment from 6 April 1997) are repealed.

12E+W+SFor the italic heading above section 13 substitute “ Guaranteed minimum pensions ”.

13(1)Before section 13 insert—E+W+S

#### “12EFormer salary related contracted-out schemes to comply with GMP requirements

(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.

14E+W+SIn 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.E+W+S

(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) ”.

16E+W+SIn 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.E+W+S

(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.”                  

18E+W+SIn 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 ”.

19E+W+SIn section 23 (securing of benefits), in subsection (2), omit paragraph (d).

20E+W+SIn 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.”                  

21E+W+SIn section 25 (power for HMRC to impose conditions as to investments and resources), in subsection (2), after “A” insert “ scheme that was a ”.

22E+W+SSections 34 to 36 (cancellation, variation, surrender and refusal of certificates) are repealed.

23E+W+SIn the italic heading above section 37, for “scheme rules after certification” substitute “ rules by former salary related contracted-out schemes ”.

24E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26E+W+SFor the heading to Chapter 2 of Part 3 substitute “ Reduction in social security benefits for members of schemes that were contracted-out ”.

27E+W+SIn 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 ”.

28E+W+SThe italic heading above section 41 is repealed.

29E+W+SSection 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.E+W+S

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

31E+W+SIn 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,”.                  

32E+W+SSection 49 (women, married women and widows) is repealed.

33E+W+SSection 50 (powers of HMRC to approve arrangements for scheme ceasing to be certified) is repealed.

34E+W+SIn section 51 (calculation of guaranteed minimum pensions under approved arrangements), in subsection (1)(b), for “ceases”                        substitute “ ceased ”.

35E+W+SFor section 52 substitute—

#### “52Supervision of former salary related contracted-out schemes

36E+W+SIn section 53 (supervision: former contracted-out schemes), omit subsection (3).

37E+W+SSections 55 to 68 (state scheme premiums) are repealed.

38E+W+SIn 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;”.                  

39E+W+SIn 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”.

40E+W+SIn section 109 (annual increase of guaranteed minimum pensions), in subsection (3A)(b), omit “for the purposes of Part 3 of                        the Pensions Act 1995”.

41E+W+SIn section 171 (questions arising in proceedings), in subsection (1), omit paragraph (b) and the “or” before it.

42E+W+SIn 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.E+W+S

(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 ”.

44E+W+SSection 181A (interpretation of references to money purchase contracted-out schemes or appropriate schemes after first abolition                        date) is repealed.

45E+W+SIn section 185 (consultation about other regulations), omit subsection (9).

46(1)Schedule 2 (certification regulations) is amended as follows.E+W+S

(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.E+W+S

(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 2**E+W+SOther Acts: amendments

#### Social Security Contributions and Benefits Act 1992 (c. 4)E+W+S

48E+W+SThe Contributions and Benefits Act is amended as follows.

49E+W+SIn section 1 (outline of contributory system), in subsection (3), omit the words after paragraph (b).

50E+W+SIn section 4C (power to make provision in consequence of provision made by virtue of section 4B(2) etc), in subsection (5),                        in each of paragraphs (a) and (b) omit the words from “, including” to the end.

51E+W+SIn section 8 (calculation of primary Class 1 contributions), in subsection (3), omit paragraph (c) and the “and” before it.

52E+W+SIn section 9 (calculation of secondary Class 1 contributions), in subsection (3), omit paragraph (c) and the “and” before                        it.

53E+W+SIn section 20 (descriptions of contributory benefits), in subsection (3), for “(reduction in state scheme contributions and                        benefits for members of certified schemes)” substitute “ (reduction in benefits for members of schemes that were contracted-out) ”.

54E+W+SIn Schedule 1 (supplementary provisions relating to national insurance contributions), in paragraph 1, omit sub-paragraphs                        (2), (3), (6) and (9) to (11).

#### Social Security Administration Act 1992 (c. 5)E+W+S

55E+W+SThe Administration Act is amended as follows.

56E+W+SIn section 150 (annual up-rating of benefits), in subsection (10A), for “the abolition date, as defined by section 181(1)                        of the Pensions Act,” substitute “ 6 April 2012 (the date appointed for the commencement of section 15(1) of the Pensions Act 2007) ”.

57E+W+SIn section 191 (interpretation - general)—

(a)in the definition of “money purchase contracted-out scheme”, for “section 181A” substitute “ section 7B ”;

(b)in the definition of “personal pension scheme” etc, for “section 181A(6)” substitute “ section 7B(6) ”.

#### Pensions Act 1995 (c. 26)E+W+S

58E+W+SThe Pensions Act 1995 is amended as follows.

59(1)Section 51 (annual increase in rate of pension) is amended as follows.E+W+S

(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.”                  

60E+W+SIn section 54 (sections 51 to 53: supplementary), in subsection (3), omit the definition of “the appointed day”.

61E+W+SFor section 69 substitute—

##### “69Grounds for applying for modifications: winding up registered schemes

62E+W+SIn section 70 (section 69: supplementary), omit subsection (3).

63E+W+SIn 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) ”.

65E+W+SSections 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)E+W+S

66E+W+SThe Employment Rights Act 1996 is amended as follows.

67E+W+SIn section 3 (note to be included in statement of initial employment particulars), omit subsection (5).

68E+W+SIn section 11 (references to employment tribunals), in subsection (3), omit paragraph (a) (including the “and” at the end                        of it).

#### Child Support, Pensions and Social Security Act 2000 (c. 19)E+W+S

69E+W+SThe Child Support, Pensions and Social Security Act 2000 is amended as follows.

70(1)Section 42 (disclosure of state pension information) is amended as follows.E+W+S

(2)In subsection (3)(d), omit “which is not contracted-out employment”.

(3)In subsection (11), omit the definition of “contracted-out employment”.

71E+W+SPart 2 of Schedule 5 (alternative to anti-franking rules) is repealed.

#### Employment Act 2002 (c. 22)E+W+S

72E+W+SIn 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)E+W+S

73E+W+SIn 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)E+W+S

74E+W+SThe Companies Act 2006 is amended as follows.

75E+W+SIn 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”.

76E+W+SIn 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)E+W+S

77E+W+SThe Pensions Act 2007 is amended as follows.

78(1)Section 15 (abolition of contracting-out for defined contribution pension schemes) is amended as follows.E+W+S

(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 ”.

79E+W+SIn 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.E+W+S

(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)E+W+S

81E+W+SThe Pensions Act 2008 is amended as follows.

82E+W+SFor section 21 substitute—

##### “21Quality requirement: UK defined benefits schemes

83E+W+SIn 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.”                  

 Section 24

## SCHEDULE 14E+W+SPower to amend schemes to reflect abolition of contracting-out

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

 Section 25

## SCHEDULE 15E+W+SOption to boost old retirement pensions

### **Part 1**E+W+SGreat Britain

#### Social Security Contributions and Benefits Act 1992 (c. 4)E+W+S

1E+W+SThe Social Security Contributions and Benefits Act 1992 is amended as follows.

2(1)Section 1 (outline of contributory system) is amended as follows.E+W+S

(2)In subsection (2)—

(a)omit “six”;

(b)in paragraph (d), after “making up entitlement;” insert—

“(da)Class 3A, payable by eligible people voluntarily under section 14A with a view to obtaining units of additional pension;”.                  

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

3E+W+SAfter section 14 insert—

##### “Class 3A contributionsE+W+S

###### 14AClass 3A contributions in return for units of additional pension

###### 14BClass 3A contributions: repayment

###### 14CClass 3A contributions: power to change eligibility or remove the option to pay

4E+W+SIf paragraph 3 comes into force before the day mentioned in section 56(4) of this Act, section 14A(2) as inserted by that                        paragraph has effect as if the reference to entitlement included the prospective entitlement of a person who—

(a)has not yet reached pensionable age, but

(b)will reach pensionable age before that day (assuming that the person lives until pensionable age).

5E+W+SIn section 43 (persons entitled to more than one retirement pension), in subsection (1), after “subsection (2) below” insert                        “ and section 61ZC below (which deals with unusual cases involving units of additional pension) ”.

6E+W+SIn section 44 (Category A retirement pension), in subsection (3)—

(a)in paragraph (b), at the end insert “ or where the pensioner has one or more units of additional pension ”;

(b)after paragraph (b) insert—

“For units of additional pension, see section 14A.”                  

7(1)Section 45 (rate of additional pension in a Category A retirement pension) is amended as follows.E+W+S

(2)In subsection (1)—

(a)after “shall be” insert “the sum of the following— 

(a)in relation to any surpluses in the pensioner's earnings factors,”;                  

(b)at the end insert “; and 

(b)if the pensioner has one or more units of additional pension, a specified amount for each of those units.”                  

(3)In subsection (2), at the end of paragraph (d) insert “; and 

(e)if the pensioner has one or more units of additional pension, a specified amount for each of those units.”                  

(4)After subsection (2) insert—

“(2A)For the purposes of subsections (1)(b) and (2)(e) the “specified amount” is an amount to be specified by the Secretary of                           State in regulations.”                  

8E+W+SIn section 52 (special provision for surviving spouses), after subsection (3) insert—

“(3A)In subsection (3) the references to additional pension in a Category A or Category B retirement pension do not include any                           amount of additional pension attributable to units of additional pension.                  

(3B)If an amount of additional pension in the Category B retirement pension is attributable to units of additional pension, the                           additional pension in the Category A retirement pension is increased by that amount (in addition to any increase under subsection                           (3)).”                  

9E+W+SAfter section 61 insert—

##### “61ZAShortfall in contributions: people with units of additional pension

##### 61ZBShortfall in contributions: people whose dead spouse had units of additional pension

##### 61ZCEntitlement to more than one pension: sections 61ZA and 61ZB

10E+W+SIn section 122 (interpretation), in subsection (1), at the appropriate place insert—

““unit of additional pension” means a unit of additional pension for which a person has paid a Class 3A contribution under section 14A;”.                  

11E+W+SIn section 176 (parliamentary control), in subsection (1)(a), at the appropriate places insert— “ section 14A; ”“ section 45(2A); ”.

12E+W+SIn the heading to Schedule 1, for “and 3” substitute “ , 3 and 3A ”.

#### Social Security Administration Act 1992 (c. 5)E+W+S

13(1)Section 162 of the Social Security Administration Act 1992 (destination of contributions) is amended as follows.E+W+S

(2)In subsection (5)(e), after “those contributions;” insert—

“(ea)in the case of Class 3A contributions, 15.5 per cent of the amount estimated to be the total of those contributions;”.                  

(3)In subsection (8)(c), for “or (e)” substitute “ , (e) or (ea) ”.

#### Welfare Reform and Pensions Act 1999 (c. 30)E+W+S

14E+W+SIn section 47 of the Welfare Reform and Pensions Act 1999 (shareable state scheme rights), in subsection (2)(a), omit “earnings-related”.

### **Part 2**E+W+SNorthern Ireland

#### Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)E+W+S

15E+W+SThe Social Security Contributions and Benefits (Northern Ireland) Act 1992 is amended as follows.

16(1)Section 1 (outline of contributory system) is amended as follows.E+W+S

(2)In subsection (2)—

(a)omit “six”;

(b)in paragraph (d), after “making up entitlement;” insert—

“(da)Class 3A, payable by eligible people voluntarily under section 14A with a view to obtaining units of additional pension;”.                  

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

17E+W+SAfter section 14 insert—

##### “Class 3A contributionsE+W+S

###### 14AClass 3A contributions in return for units of additional pension

###### 14BClass 3A contributions: repayment

###### 14CClass 3A contributions: power to change eligibility or remove the option to pay

18(1)If paragraph 17 comes into force before the new state pension commencement date for Northern Ireland, section 14A(2) as inserted                        by that paragraph has effect as if the reference to entitlement included the prospective entitlement of a person who—E+W+S

(a)has not yet reached pensionable age, but

(b)will reach pensionable age before that day (assuming that the person lives until pensionable age).

(2)In this paragraph “the new state pension commencement date for Northern Ireland” means the date on which legislation in Northern Ireland corresponding to section 2 of this Act comes fully into force.

19E+W+SIn section 121 (interpretation), in subsection (1), at the appropriate place insert—

““unit of additional pension” means a unit of additional pension for which a person has paid a Class 3A contribution under section 14A;”.                  

20E+W+SIn section 172 (procedure for regulations etc), in subsection (11A), after “11(3)” insert “ , 14A ”.

21E+W+SIn the heading to Schedule 1, for “and 3” substitute “ , 3 and 3A ”.

#### Social Security Administration (Northern Ireland) Act 1992 (c. 8)E+W+S

22(1)Section 142 of the Social Security Administration (Northern Ireland) Act 1992 (destination of contributions) is amended as                        follows.E+W+S

(2)In subsection (5)(e), after “those contributions;” insert—

“(ea)in the case of Class 3A contributions, 15.5 per cent of the amount estimated to be the total of those contributions;”.                  

(3)In subsection (8)(c), for “or (e)” substitute “ , (e) or (ea) ”.

 Section 31

## SCHEDULE 16E+W+SBereavement support payment: amendments

### Forfeiture Act 1982 (c. 34)E+W+S

1E+W+SIn 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, ”.

### Social Security Contributions and Benefits Act 1992 (c. 4)E+W+S

2E+W+SThe Social Security Contributions and Benefits Act 1992 is amended as follows.

3(1)Section 20 (descriptions of contributory benefits) is amended as follows.E+W+S

(2)In subsection (1), for paragraph (ea) substitute—

“(ea)widowed parent's allowance;”.                  

(3)In subsection (2), in the definition of “long-term benefit” omit paragraph (bb).

4(1)Section 21 (contribution conditions) is amended as follows.E+W+S

(2)In the table in subsection (2) omit the entries for bereavement payment and bereavement allowance.

(3)Omit subsection (4).

5E+W+SIn section 22 (earnings factors), in subsection (2), after paragraph (c) (inserted by Schedule 12 to this Act) insert “and 

(d)establishing entitlement to bereavement support payment under section 30 of the Pensions Act 2014.”                  

6(1)Section 23A (contributions credits for relevant parents and carers) is amended as follows.E+W+S

(2)In subsection (1) omit paragraph (e).

(3)In subsection (6)(b) omit “or (e)”.

7E+W+SFor the italic heading above section 36 substitute “ Bereavement benefits: deaths before the day on which section 30 of the Pensions Act 2014 comes into force ”.

8E+W+SSection 36 (bereavement payment) is repealed.

9E+W+SSection 36A (cases in which sections 37 to 41 apply) is repealed.

10(1)Section 37 (widowed mother's allowance) is amended as follows.E+W+S

(2)Before subsection (1) insert—

“(A1)This section applies only in cases where a woman's husband has died before 9 April 2001.”                  

(3)At the end of the heading insert “ : deaths before 9 April 2001 ”.

11(1)Section 38 (widow's pension) is amended as follows.E+W+S

(2)Before subsection (1) insert—

“(A1)This section applies only in cases where a woman's husband has died before 9 April 2001.”                  

(3)At the end of the heading insert “ : deaths before 9 April 2001 ”.

12E+W+SIn section 39A (widowed parent's allowance), for subsection (1) substitute—

“(1)This section applies where—                  

(a)a person's spouse or civil partner has died before the day on which section 30 of the Pensions Act 2014 comes into force (but                           see subsection (1A)),                  

(b)the person has not married or formed a civil partnership after the death but before that day, and                  

(c)the person is under pensionable age on that day.                  

(1A)This section does not apply in cases where a woman's husband has died before 9 April 2001.”                  

13E+W+SSection 39B (bereavement allowance where no dependent children) is repealed.

14(1)Section 39C (rate of widowed parent's allowance and bereavement allowance) is amended as follows.E+W+S

(2)Omit subsection (2).

(3)Omit subsection (5).

(4)In the heading omit “and bereavement allowance”.

15E+W+SIn section 48B (Category B retirement pension for widows and widowers), in subsection (8), for “the appointed day (as defined                        by section 36A(3))” substitute “ 9 April 2001 ”.

16E+W+SIn section 48BB (Category B retirement pension: entitlement by reference to benefits under section 39A or 39B), in subsection                        (3)(a)(i), after “bereavement allowance” insert “ under section 39B (before that section was repealed) ”.

17(1)Section 60 (complete or partial failure to satisfy contribution condition) is amended as follows.E+W+S

(2)In subsection (1) omit paragraph (ab).

(3)In subsection (3) omit paragraphs (a) and (bb).

18(1)Schedule 3 (contribution conditions for entitlement to benefit) is amended as follows.E+W+S

(2)Omit paragraph 4 and the italic heading above it.

(3)Omit paragraphs 7 and 9.

19E+W+SIn Schedule 4 (rates of benefits etc) omit Part 2.

### Social Security Administration Act 1992 (c. 5)E+W+S

20E+W+SThe Social Security Administration Act 1992 is amended as follows.

21(1)Section 1 (entitlement to benefit dependent on claim) is amended as follows.E+W+S

(2)For subsection (2) substitute—

“(2)Where under subsection (1) a person is required to make a claim or to be treated as making a claim for a benefit in order                           to be entitled to it, the person is not entitled to it in respect of any period more than 12 months before the date on which                           the claim is made or treated as made.                  

(2A)But subsection (2) does not apply—                  

(a)to disablement benefit or reduced earnings allowance, or                  

(b)in a case where a claim for the benefit is made or treated as made by virtue of section 3(2).”                  

(3)In subsection (4), after paragraph (zb) (inserted by Schedule 12 to this Act) insert—

“(zc)bereavement support payment under section 30 of the Pensions Act 2014;”.                  

22E+W+SIn section 2A (claim or full entitlement to certain benefits conditional on work-focused interview), in subsection (2)(d),                        omit “(other than a bereavement payment)”.

23(1)Section 3 (late claims for bereavement benefit where death is difficult to establish) is amended as follows.E+W+S

(2)Subsection (3) is repealed.

(3)After subsection (4) insert—

“(5)In subsection (2) “bereavement benefit” means—                  

(a)bereavement support payment, or                  

(b)widowed parent's allowance.”                  

24E+W+SIn section 5 (regulations about claims for and payments of benefits), in subsection (2), after paragraph (zb) (inserted by                        Schedule 12 to this Act) insert—

“(zc)bereavement support payment under section 30 of the Pensions Act 2014;”.                  

25E+W+SIn section 71 (overpayments - general), in subsection (11), after paragraph (ad) insert—

“(ae)bereavement support payment under section 30 of the Pensions Act 2014;”.                  

26E+W+SIn section 121DA (interpretation of Part 6), in subsection (1), after paragraph (hl) (inserted by Schedule 12 to this Act)                        insert—

“(hm)Part 5 of the Pensions Act 2014;”.                  

27E+W+SIn section 122B (supply of other government information for fraud prevention and verification), in subsection (3)(b), after                        “, Part 1 of the Pensions Act 2014” (inserted by Schedule 12 to this Act) insert “ , section 30 of that Act ”.

28E+W+SIn section 124 (age, death and marriage), in subsection (1), after paragraph (af) (inserted by Schedule 12 to this Act) insert—

“(ag)of section 30 of the Pensions Act 2014; and”.                  

29E+W+SIn section 125 (regulations as to notification of deaths), in subsection (1), after “, Part 1 of the Pensions Act 2014” (inserted                        by Schedule 12 to this Act) insert “ , section 30 of that Act ”.

30E+W+SIn section 150 (annual up-rating of benefits), in subsection (1), after paragraph (p) (inserted by Schedule 12 to this Act)                        insert—

“(q)specified in regulations under section 30 of the Pensions Act 2014 (bereavement support payment).”                  

31(1)Section 163 (general financial arrangements) is amended as follows.E+W+S

(2)In subsection (1), after paragraph (za) (inserted by Schedule 12 to this Act) insert—

“(zb)bereavement support payment under section 30 of the Pensions Act 2014;”.                  

(3)In subsection (2)(a), after “, Part 1 of the Pensions Act 2014” (inserted by Schedule 12 to this Act) insert “ , section 30 of that Act ”.

(4)In subsection (3)(b), after “or Part 1 of the Pensions Act 2014” (inserted by Schedule 12 to this Act) insert “ or section 30 of that Act ”.

32E+W+SIn section 170 (Social Security Advisory Committee), in subsection (5)—

(a)in the definition of “the relevant enactments”, after paragraph (am) (inserted by Schedule 12 to this Act) insert—

“(an)section 30 of the Pensions Act 2014;”;                  

(b)in the definition of “the relevant Northern Ireland enactments”, after paragraph (am) (inserted by Schedule 12 to this Act)                        insert—

“(an)any provisions in Northern Ireland which correspond to section 30 of the Pensions Act 2014;”.                  

33(1)Section 179 (reciprocal agreements) is amended as follows.E+W+S

(2)In subsection (3)(a), after “Pensions Act 2014” (inserted by Schedule 12 to this Act) insert “ , Part 5 of that Act ”.

(3)In subsection (4), after paragraph (ai) (inserted by Schedule 12 to this Act) insert—

“(aj)to Part 5 of the Pensions Act 2014;”.                  

(4)In subsection (5)—

(a)after “Pensions Act 2014” (inserted by Schedule 12 to this Act) insert “ or section 30 of that Act ”;

(b)after paragraph (ad) (inserted by Schedule 12 to this Act) insert—

“(ae)bereavement support payment;”.                  

34E+W+SIn section 187 (inalienability), in subsection (1), after paragraph (ad) insert—

“(ae)bereavement support payment under section 30 of the Pensions Act 2014;”.                  

35E+W+SIn section 191 (interpretation), in the definition of “benefit”, for “and personal independence payment” substitute “ , personal independence payment and bereavement support payment under section 30 of the Pensions Act 2014 ”.

### Social Security Act 1993 (c. 3)E+W+S

36E+W+SIn section 2 of the Social Security Act 1993 (payments into National Insurance Fund out of money provided by Parliament),                        in subsection (4)(a), after “(za),” (inserted by Schedule 12 to this Act) insert “ (zb), ”.

### Social Security Act 1998 (c. 14)E+W+S

37E+W+SThe Social Security Act 1998 is amended as follows.

38E+W+SIn section 2 (use of computers), in subsection (2), after paragraph (m) (inserted by Schedule 12 to this Act) insert “or 

(n)section 30 of the Pensions Act 2014;”.                  

39(1)Section 8 (decisions by Secretary of State) is amended as follows.E+W+S

(2)In subsection (3), after paragraph (ab) (inserted by Schedule 12 to this Act) insert—

“(ac)bereavement support payment under section 30 of the Pensions Act 2014;”.                  

(3)In subsection (4), after “Part 1 of the Pensions Act 2014” (inserted by Schedule 12 to this Act) insert “ or section 30 of that Act ”.

40E+W+SIn section 11 (regulations with respect to decisions), in subsection (3), in the definition of “the current legislation”,                        after “Part 1 of the Pensions Act 2014” (inserted by Schedule 12 to this Act) insert “ and section 30 of that Act ”.

41E+W+SIn section 27 (restriction on entitlement in cases of error), in subsection (7), in the definition of “benefit”—

(a)after paragraph (df) insert—

“(dg)bereavement support payment under section 30 of the Pensions Act 2014;”;                  

(b)in paragraph (e), for “to (df)” substitute “ to (dg) ”.

42E+W+SIn section 28 (correction of errors in decisions etc), in subsection (3)(j), after “Part 1 of the Pensions Act 2014” (inserted                        by Schedule 12 to this Act) insert “ or section 30 of that Act ”.

### Social Security Fraud Act 2001 (c. 11)E+W+S

43E+W+SThe Social Security Fraud Act 2001 is amended as follows.

44E+W+SIn section 6A (definitions), in subsection (1), in the definition of “disqualifying benefit”, after paragraph (ca) insert—

“(cb)bereavement support payment under section 30 of the Pensions Act 2014 or under any provision in Northern Ireland which corresponds                           to that section;”.                  

45E+W+SIn section 10 (power to supplement and mitigate loss of benefit provisions), in subsection (3), after paragraph (bf) (inserted                        by Schedule 12 to this Act) insert—

“(bg)bereavement support payment under section 30 of the Pensions Act 2014 or under any provision in Northern Ireland which corresponds                           to that section;”.                  

### Income Tax (Earnings and Pensions) Act 2003 (c. 1)E+W+S

46E+W+SThe Income Tax (Earnings and Pensions) Act 2003 is amended as follows.

47E+W+SIn 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).

48E+W+SIn 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).

 Section 33

## SCHEDULE 17E+W+SAutomatic transfer of pension benefits etc

Prospective

### **Part 1**E+W+SAutomatic transfer of pension benefits

#### Regulations providing for transfer of cash equivalent of transferable benefitsE+W+S

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—E+W+S

(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 [F2scheme 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.

[F3(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.]

Textual Amendments

F2Words in Sch. 17 para. 1(4)(d) substituted (6.4.2015) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), **Sch. 4 para. 46(a)** (with s. 87)

F3Sch. 17 para. 1(6) substituted (6.4.2015) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), **Sch. 4 para. 46(b)** (with s. 87)

#### Automatic transfer scheme to find out whether members have transferable benefitsE+W+S

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.E+W+S

(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 equivalentE+W+S

3(1)The regulations must require the trustees or managers of an automatic transfer scheme to give a transfer notice if—E+W+S

(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 transferE+W+S

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.E+W+S

(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 schemesE+W+S

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)—E+W+S

(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 requestE+W+S

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.E+W+S

(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 schemeE+W+S

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.E+W+S

(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 verificationE+W+S

8(1)The regulations may provide for the manner in which cash equivalents are to be calculated and verified.E+W+S

(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 databaseE+W+S

9(1)The regulations must make provision about disclosure of information.E+W+S

(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.

#### ComplianceE+W+S

10(1)The regulations may make provision with a view to ensuring compliance with any provision of the regulations.E+W+S

(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 keepingE+W+S

11(1)The regulations may require any person—E+W+S

(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 regulationsE+W+S

12E+W+SThe 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 equivalentE+W+S

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).E+W+S

(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.

Prospective

### **Part 2**E+W+SMerger 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.E+W+S

(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 3**E+W+SInterpretation etc

#### Interpretation etcE+W+S

15(1)In this Schedule—E+W+S
          -  “active member”—  (a)
in relation to an occupational pension scheme, has the meaning given by section 124(1) of the Pensions Act 1995, and
(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—                          (a)
an occupational pension scheme, or
(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—                          (a)
an occupational pension scheme,
(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                                 
(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—                          (a)
who is a worker for the purposes of Part 1 of the Pensions Act 2008, or
(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).

Prospective

#### Crown applicationE+W+S

16(1)This Schedule applies to a pension scheme managed by or on behalf of the Crown as it applies to other pension schemes.E+W+S

(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.

Prospective

#### Overriding provisionE+W+S

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.E+W+S

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

Prospective

#### Other provision relating to regulations under this ScheduleE+W+S

18(1)Regulations under this Schedule may amend or otherwise modify any enactment (whenever passed or made).E+W+S

(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.

19E+W+SBefore making any regulations under this Schedule, the Secretary of State must consult such persons as the Secretary of State                           considers appropriate.

Prospective

#### AmendmentsE+W+S

20(1)The Pension Schemes Act 1993 is amended as follows.E+W+S

(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;”.                     

21E+W+SIn 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 ”.

 Section 43

## SCHEDULE 18E+W+SPower to restrict charges or impose requirements in relation to schemes

### Power to restrict chargesE+W+S

1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

### Power to impose requirements relating to administration or governanceE+W+S

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.E+W+S

(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.

### ComplianceE+W+S

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.E+W+S

(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)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 regulations under paragraph 1 or 2;

(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.

### InterpretationE+W+S

4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

### Crown applicationE+W+S

5(1)This Schedule applies to a pension scheme managed by or on behalf of the Crown as it applies to other pension schemes.E+W+S

(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 provisionE+W+S

6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S

### Other provision relating to regulations under this ScheduleE+W+S

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.E+W+S

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

8E+W+SBefore making any regulations under this Schedule, the Secretary of State must consult such persons as the Secretary of State                        considers appropriate.

### AmendmentsE+W+S

9(1)The Pension Schemes Act 1993 is amended as follows.E+W+S

(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.”                  

10E+W+SIn 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.E+W+S

(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).

12E+W+SIn consequence of the amendments made by paragraph 11, section 10 of the Pensions Act 2011 (qualifying schemes: administration                        charges) is repealed.

 Section 46

## SCHEDULE 19E+W+SProhibition orders: consequential amendments

### Pensions Act 1995 (c. 26)E+W+S

1E+W+SThe Pensions Act 1995 is amended as follows.

2E+W+SIn 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 ”.

3E+W+SIn section 7 (appointment of trustees), in subsection (1), after “section 3,” insert “ by section 3A ”.

4E+W+SIn 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)E+W+S

5E+W+SThe Pensions Act 2004 is amended as follows.

6E+W+SIn 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);”.                  

7E+W+SIn 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.”                  

8E+W+SIn 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;”.                  

9E+W+SIn 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.E+W+S

(2)After paragraph 5 insert—

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

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

 Section 50

## SCHEDULE 20E+W+SPension Protection Fund: increased compensation cap for long service

### **Part 1**E+W+SThe new compensation cap

1E+W+SSchedule 7 to the Pensions Act 2004 (pension compensation provisions) is amended as follows.

2E+W+SIn 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;”.                  

3E+W+SAfter 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 2**E+W+SConsequential amendments

4E+W+SThe Pensions Act 2004 is amended as follows.

5E+W+SIn section 316(2)(s), for “paragraph 26(7)” substitute “ paragraph 26A(7) ”.

6(1)Schedule 7 is amended as follows.E+W+S

(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 ”.

7E+W+SIn 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 3**E+W+SEffect of change in transitional cases

#### Recalculation of periodic compensation going forwardsE+W+S

8(1)This paragraph applies in relation to a person if—E+W+S

(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”—  (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;                                 
(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 paymentsE+W+S

9(1)Nothing in this Schedule affects—E+W+S

(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' compensationE+W+S

10E+W+SWhen 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 compensationE+W+S

11E+W+SNothing 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 yearE+W+S

12(1)This paragraph applies in relation to a person who is alive on the commencement date if—E+W+S

(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 2004E+W+S

13E+W+SSection 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 4**E+W+SSchemes undergoing assessment or winding up on the commencement date

#### Schemes undergoing assessment on the commencement dateE+W+S

14(1)This paragraph applies in relation to an eligible scheme that is undergoing assessment on the commencement date.E+W+S

##### *Continue to use the old cap as the basis of assessment*

(2)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.

##### *Going forwards, pay pensions on the basis of the new cap*

(3)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 dateE+W+S

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.E+W+S

##### *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”E+W+S

16E+W+SFor 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”E+W+S

17E+W+SSection 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 5**E+W+SInterpretation and power to make further transitional provision

#### InterpretationE+W+S

18E+W+SIn this Schedule “the commencement date” means the date on which it comes fully into force.

19E+W+SOther expressions used in this Schedule have the same meaning as in Part 2 of the Pensions Act 2004.

#### Further transitional provisionE+W+S

20E+W+SThe 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—E+W+S

(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.E+W+S

(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.