Social Security Act 1980

3 Amendments of Social Security Pensions Act 1975

(1) In section 62(1) of the [1975 c. 60.] Social Security Pensions Act 1975 (which provides among other things that regulations under section 9(3) of that Act prescribing a maximum for the additional component of a Category A retirement pension are subject to the affirmative resolution procedure) the words " or 9(3)" shall be omitted; and accordingly a statutory instrument containing regulations under the said section 9(3) is subject to annulment in pursuance of a resolution of either House of Parliament by virtue of section 66(2) of that Act (hereafter in this Act referred to as " the Pensions Act " ) and section 167(3) of the principal Act.

(2) At the end of section 11 of the Pensions Act (which excludes certain sums from the rate of a pension mentioned in section 30(1) of the principal Act) there shall be inserted the words " ; but the preceding provisions of this section shall be disregarded for the purposes of section 27(3)(b)(ii) of that Act (which provides for a person to be treated as retired by reference to the said section 30(1)) ".

(3) In subsection (3) of section 21 of the Pensions Act (which provides that if on a review under that section of the general level of earnings the Secretary of State concludes that certain earnings factors have not retained their value during the review period he shall prepare and lay before Parliament the draft of an order increasing the factors so as to make up the fall in their value together with falls made up by earlier orders) for the words from " prepare " to " draft of " there shall be substituted the word " make " ; and accordingly—

(a) the same amendment shall be made in subsection (5) of that section (which provides that where the Secretary of State determines that he is not required to prepare and lay such a draft he shall report to Parliament his reasons for the determination); and

(b) a statutory instrument containing an order under the said subsection (3) is subject to annulment as mentioned in subsection (1) of this section.

(4) In section 21(1) of the [1977 c. 5.] Social Security (Miscellaneous Provisions) Act 1977 (which provides that, unless the prescribed person otherwise elects, section 35(5) of the Pensions Act shall have effect, in a case where pension rights are preserved under approved arrangements, without taking into account any orders under section 21 of the Pensions Act which were made in the five years ending with the year in which the scheme ceases to be contracted-out and as if relevant earnings factors were increased by 12 per cent, for each of the years there mentioned), for the words from " have effect" onwards there shall be substituted the words " in a case where one or more of the five tax years ending with the tax year in which the scheme ceases to be contracted-out is a relevant year in relation to the earner, have effect, unless the prescribed person otherwise elects in the prescribed manner, subject to the following provisions, that is to say—

(a) any order made under section 21 above in any of those five tax years increasing an earnings factor shall be disregarded (but without prejudice to any increase made by the last order made under that section before the beginning of those five tax years); and

(b) any relevant earnings factor derived from contributions in respect of any year (hereafter in this subsection referred to as ' the relevant contributions year') shall be treated as increased by 12 per cent, compound for each of those five tax years, other than any of those years which—

(i) constitutes or begins before the relevant contributions year, or

(ii) begins after the final relevant year in relation to the earner.".

(5) In section 38(1) of the Pensions Act (which among other things provides that where a person leaves employment which is contracted-out by reference to a scheme, the scheme may provide for his rights to benefits under the scheme to be transferred to another scheme but, except in prescribed cases, only with his consent and to another contracted-out scheme) for the words "to another contracted-out scheme" there shall be substituted the words " if the other scheme is a contracted-out scheme in relation to an employment of his at the time of the transfer ".

(6) In section 41 of the Pensions Act, after subsection (1) (which provides that for an occupational pension scheme, other than a public service scheme, to be contracted-out the Occupational Pensions Board must be satisfied that the scheme's resources are sufficient for meeting claims in respect of guaranteed minimum pensions as mentioned in paragraph (a), for paying state scheme premiums as mentioned in paragraph (b) and for meeting on winding up the liabilities and expenses mentioned in paragraph (c) of that subsection) there shall be inserted the following subsection—

(1A) Regulations may—

(a) provide for subsection (1) above to have effect, in cases specified in the regulations, with the omission of paragraphs (b) and (c) of that subsection or either of those paragraphs or with the substitution for those paragraphs or either of them of provisions so specified ; and

(b) make such amendments to section 22(9)(a) of the [1977 c. 5.] Social Security (Miscellaneous Provisions) Act 1977 (which refers to paragraphs (b) and (c) of subsection (1) above) as the Secretary of State considers appropriate in consequence of regulations made by virtue of paragraph (a) of this subsection.

(7) It is hereby declared—

(a) that an approval of arrangements relating to a scheme may be withdrawn in pursuance of section 44(4) of the Pensions Act at any time notwithstanding that the scheme has been wound up ; and

(b) that on the withdrawal of such an approval after the winding up of the scheme a premium becomes payable in pursuance of section 44(2) of that Act;

and in subsection (10) of section 22 of the Social Security (Miscellaneous Provisions) Act 1977 (which provides for the cancellation of a certificate issued under subsection (9) of that section if the Secretary of State considers that it was issued in consequence of a mistake and provides for the payment of a premium in pursuance of the said section 44(2) on the cancellation of such a certificate) after the word " considers" there shall be inserted the word " (a) " and after the word " mistake " there shall be inserted the words “; or

(b) that the person upon whom an obligation to pay benefits in respect of an employment is imposed by the policy of insurance or annuity contract to which such a certificate relates is likely to fail to discharge the obligation,”.

(8) For subsection (6) of section 44 of the Pensions Act (which provides that the costs which an accrued rights premium or a pensioner's rights premium is to defray shall, unless the person liable for the premium elects otherwise, be calculated on the basis there mentioned) there shall be substituted the following subsection—

(6) In determining the amount of any state scheme premium payable under this section where one or more of the five tax years ending with the tax year in which the scheme ceases to be contracted-out is a relevant year in relation to the earner, the costs referred to in subsection (5) (a) and (b) above shall, unless the person liable for the premium elects in the prescribed manner that this subsection shall not apply, be calculated as follows—

(a) any order made under section 21 above in any of those five tax years increasing a relevant earnings factor shall be disregarded (but without prejudice to any increase made by the last order made under that section before the beginning of those five tax years); and

(b) any relevant earnings factor derived from contributions in respect of any year (hereafter in this subsection referred to as " the relevant contributions year ") shall be treated as increased by 12 per cent, compound for each of those five tax years, other than any of those years which—

(i) constitutes or begins before the relevant contributions year, or

(ii) begins after the final relevant year in relation to the earner ;

and in this subsection " relevant year " and " final relevant year " have the same meanings as in section 35 above and references to the earner shall be construed as references to the earner in respect of whom or, as the case may be, in respect of whose widow the premium in question has become payable.

(9) In subsection (3) of section 45 of the Pensions Act (which provides that the costs the difference between which, a limited revaluation premium is to defray shall, unless the person liable for the premium elects otherwise, be calculated on the basis there mentioned) for the words from " be calculated " onwards there shall be substituted the words " unless the person liable for the premium elects in the prescribed manner that this subsection shall not apply, be calculated as follows—

(a) any order made under section 21 above increasing an earnings factor and made in any of the five tax years ending with the tax year in which the scheme ceases to be contracted-out shall be disregarded (but without prejudice to any increase made by the last order made under that section before the beginning of those five tax years); and

(b) any relevant earnings factor derived from contributions in respect of any year (hereafter in this subsection referred to as ' the relevant contributions year') shall be treated as increased by 12 per cent, compound for each of those five tax years, other than any of those years which constitutes or begins before the relevant contributions year.".

(10) Without prejudice to their powers apart from this subsection, the Occupational Pensions Board may withhold or cancel by virtue of this subsection a contracting-out certificate in respect of a scheme if they consider that the rules of the scheme are such that persons over particular ages may be prevented from participating in the scheme; and without prejudice to the effect apart from this subsection of subsections (1) and (2) of section 50 of the Pensions Act (which among other things provide that certain alterations of the rules of certain schemes are not to be made without the consent of the Board), those subsections shall apply to an alteration of the rules of a scheme mentioned in subsection (1) of that section which would make the rules such as aforesaid as those subsections apply to an alteration mentioned in that subsection.

(11) In Schedule 1 to the Pensions Act (into which a paragraph 4A providing for further increases of a retirement pension was inserted by the [1979 c. 18.] Social Security Act 1979), after the words " increase under paragraph 4 " in paragraph 2(4) there shall be inserted the words " or 4A ".

(12) In paragraph 6 of Schedule 2 to the Pensions Act—

(a) after paragraph (b) of sub-paragraph (3) (under which regulations may provide for treating a premium as actually paid in certain circumstances) there shall be inserted the following paragraph—

(bb) for treating part of a premium payable in prescribed circumstances in respect of a person as actually paid and for modifying Part III of this Act in relation to a case in which such a part is so treated;

(b) at the end of sub-paragraph (3) there shall be inserted the words " and the Secretary of State may accept payments in connection with a case in which a premium or part of it is treated as actually paid and shall pay into the National Insurance Fund any sums received by him by way of such payments. "; and

(c) after sub-paragraph (3) there shall be inserted the following sub-paragraph—

(4) Without prejudice to sub-paragraph (3) above, regulations may provide—

(a) that for the purpose of extinguishing accrued rights to guaranteed minimum pensions and rights to receive such pensions a state scheme premium is to be treated as actually paid on a date determined under the regulations;

(b) for disregarding the effect of regulations made by virtue of paragraph (a) of this subparagraph in a case where the premium in question is not paid on or before the date when it becomes payable or such later date as may be determined under the regulations; and

(c) for obtaining repayment of benefits paid by virtue of regulations so made in a case where the effect of the regulations is to be disregarded, and, where the repayment is obtained from assets of the relevant scheme, for reducing the sums payable under the scheme to the beneficiary by the amount of the repayment.