Background and Policy Objectives
3.The Act makes provision for Northern Ireland corresponding to provision contained in the Pensions Act 2007 (c. 22) (“the 2007 Act”). It is part of the ongoing process of pensions reform.
4.Part 1 of the Act makes provision for:
a single contribution condition for Category A and B pensions for people reaching state pension age (a term interchangeable with “pensionable age”) from 6th April 2010;
the removal, from the same date, of the condition for a person’s entitlement to a Category B pension requiring an individual’s spouse or civil partner to have made a claim for their Category A pension;
new crediting arrangements to allow a parent, a registered foster parent or a carer reaching state pension age from 6th April 2010 to build up, in certain circumstances, entitlement to a Category A basic state pension, and for their spouse or civil partner to build up entitlement to an associated Category B pension. In addition, bereavement allowance and widowed parent’s allowance, payable to a surviving spouse or civil partner, will be calculated by reference to the new credits in circumstances where the contributor dies on or after 6th April 2010. For those people reaching state pension age on or after that date, each complete year (subject to specified upper limits) of home responsibilities protection awarded under the existing rules of the scheme will be converted into a qualifying year for a Category A basic state pension and relevant bereavement benefits;
abolition of adult dependency increases with effect from 6th April 2010 and for entitlements up to this date to be protected to 5th April 2020;
the basic state pension and the standard minimum guarantee in state pension credit to be uprated annually in line with earnings rather than prices;
increasing the number of people who are deemed to be earning at the low earnings threshold, and so accruing state second pension until the proposed new simplified state second pension is introduced;
restructuring state second pension;
state pension age to increase by one year per decade between 2020 and 2050, with each change phased in over two consecutive years in each decade.
5.Part 2 of the Act makes provision in relation to non-state pensions. It allows the rights to a guaranteed minimum pension accrued under a defined benefit pension scheme to be converted into ordinary scheme benefits and provides for the abolition of contracting-out for defined contribution pension schemes. It also makes amendments regarding dispute resolution arrangements and the Department’s role in approving actuarial guidance.
6.Part 3 of the Act sets out provisions regarding the initial functions of the Personal Accounts Delivery Authority (a body established by section 20 of the 2007 Act) and for the management of that Authority.
