Pensions Act 2008

Part 2 Simplification etc

Private pensions

100 Abolition of safeguarded rights

Part 3A of the Pension Schemes Act 1993 (safeguarded rights) ceases to have effect.

101 Revaluation of accrued benefits etc

(1) Schedule 2, which—

(a) amends Schedule 3 to the Pension Schemes Act 1993 (methods of revaluing accrued pension benefits),

(b) amends Schedule 7 to the Pensions Act 2004 (c. 35) (pension compensation provisions), and

(c) makes consequential amendments,

has effect.

(2) The amendments made by Parts 1 and 3 of Schedule 2 do not apply in relation to a revaluation period ending before this section comes into force.

(3) In subsection (2), “revaluation period” has the same meaning as in paragraph 2 of Schedule 3 to the Pension Schemes Act 1993.

State pensions etc

102 Consolidation of additional pension

(1) The Social Security Contributions and Benefits Act 1992 (c. 4) (the 1992 Act) is amended as follows.

(2) Section 45 (the additional pension in a Category A retirement pension) is amended as follows.

(3) In subsection (2), after “1999” insert “but before 6th April 2020”.

(4) After subsection (2) insert—

“(2A) The weekly rate of the additional pension in a Category A retirement pension in any case where the pensioner attained pensionable age in a tax year after 5th April 2020 shall be the sum of the following—

(a) in relation to any tax year before the flat rate introduction year, the revalued consolidated amount, calculated in accordance with Schedule 4C to this Act; and

(b) in relation to the flat rate introduction year and subsequent years, the amount referred to in subsection (2)(d).”

(5) Schedule 3, which inserts Schedule 4C to the 1992 Act, has effect.

(6) In section 47 (increase of Category A retirement pension for invalidity), after subsection (4) insert—

“(4A) Any part of an additional pension resulting from an amount calculated under paragraph 2 of Schedule 4C to this Act by virtue of paragraph 5(a) of that Schedule (the GRB amount) is to be disregarded for the purposes of this section.”

(7) Section 36 of the National Insurance Act 1965 (c. 51) (graduated retirement benefit), as it continues in force as mentioned in section 62 of the 1992 Act, has effect in relation to a person over pensionable age only if the person attained pensionable age before 6th April 2020.

103 Effect of entitlement to guaranteed minimum pension

(1) The Pension Schemes Act 1993 (c. 48) is amended as follows.

(2) In section 46 (effect of entitlement to guaranteed minimum pensions on payment of social security benefits) after subsection (1) insert—

“(1A) Subsection (1) does not apply in relation to a relevant benefit if the weekly rate of the additional pension in that benefit is determined under section 45(2A) of the Social Security Contributions and Benefits Act 1992 (retirement in tax year after 5th April 2020).

(1B) In subsection (1A) “a relevant benefit” means—

(a) a Category A or Category B retirement pension, or

(b) a widowed parent’s allowance.”

(3) After section 46 insert—

“46A Retirement in tax year after 5th April 2020

(1) Subsection (2) applies where—

(a) for any period a person is entitled to a Category A or Category B retirement pension, or a widowed parent’s allowance, under the 1992 Act (“the benefit”),

(b) the person is entitled to one or more guaranteed minimum pensions for that period, and

(c) the weekly rate of the additional pension in the benefit is determined under section 45(2A) of the 1992 Act (retirement in tax year after 5th April 2020).

(2) The weekly rate of the benefit shall, for the period mentioned in subsection (1)(a), be reduced by an amount calculated in accordance with regulations.

(3) Regulations under subsection (2) must provide for the amount of the reduction to be calculated in such a way that it does not exceed such part of the weekly rate of the additional pension in the benefit as is attributable to earnings factors for tax years ending before the principal appointed day.

(4) The effect of the reductions made under subsection (2) in relation to any person must be actuarially equivalent to the effect of the reductions that, but for section 46(1A), would be made under section 46(1) in relation to that person.

(5) The Secretary of State must require the Government Actuary or Deputy Government Actuary (“the Actuary”) to prepare a report on how actuarial equivalence should be determined for the purposes of this section.

(6) In preparing the report the Actuary must consult such persons as appear to the Actuary to be appropriate.

(7) The Secretary of State must lay the report before Parliament.

(8) Having considered the report, the Secretary of State must by regulations make provision for determining actuarial equivalence for the purposes of this section.

(9) If any recommendation in the report is not followed in the regulations, the Secretary of State must prepare and lay before Parliament a report explaining why.

(10) In this section “the 1992 Act” means the Social Security Contributions and Benefits Act 1992.”

(4) In section 185(2) (consultation) at the end of paragraph (c) insert “or 46A(2); or”.

(5) In section 186(3) (parliamentary control) before paragraph (a) insert—

“(za) regulations made by virtue of section 46A(8), or”.

104 Additional pension etc: minor and consequential amendments

Schedule 4 (additional pension etc: minor and consequential amendments) has effect.

105 State pension credit: extension of assessed income period for those aged 75 or over

(1) Section 9 of the State Pension Credit Act 2002 (c. 16) (duration of assessed income period) is amended as set out in subsections (2) to (4).

(2) For subsection (1) substitute—

“(1) An assessed income period shall (subject to the following subsections) be—

(a) in the case of a claimant who is under the age of 75 on the day on which the relevant decision takes effect, the period of 5 years beginning with that day;

(b) in the case of a claimant who is aged 75 or over on that day, an indefinite period beginning with that day.”

(3) In paragraph (b) of subsection (2), for the words from “may” to “years” substitute “shall specify a period that is shorter than 5 years”.

(4) After subsection (5) insert—

“(6) Where—

(a) an assessed income period is brought to an end by the expiry of a period of 5 years or more, and

(b) the claimant is aged 80 or over at that time,

the assessed income period shall be treated as not ending at that time but, subject to subsection (4) and provision made under subsection (5), as continuing indefinitely.”

(5) The amendments made by subsections (2) and (3) apply only where the relevant decision (within the meaning given by section 6(5) of the State Pension Credit Act 2002 (c. 16)) takes effect on or after 6 April 2009.

(6) The subsection inserted by subsection (4) ceases to have effect on 6 April 2014.

106 Contracting-out: abolition of all protected rights

(1) As from the contracting-out abolition date, pension schemes are not required to make special provision in relation to the protected rights of members.

(2) Accordingly—

(a) the provisions of the Pension Schemes Act 1993 (c. 48) (“the 1993 Act”) within subsection (3) cease to have effect as from that date, and

(b) sections 25A, 27A and 32A of the 1993 Act (as inserted by paragraphs 9, 10 and 12 of Schedule 4 to the Pensions Act 2007 (c. 22)) are not to have any effect as from that date (in spite of section 15(4) of that Act of 2007).

(3) The provisions of the 1993 Act within this subsection are—

(a) section 10 (protected rights and money purchase benefits),

(b) section 26 (persons who may establish scheme),

(c) section 27 (identification and valuation of protected rights),

(d) section 30 (securing of liability for protected rights),

(e) section 32 (suspension or forfeiture), and

(f) section 33A (appropriate schemes: “blowing the whistle”).

(4) In this section—

• “the contracting-out abolition date” means the day appointed under section 30 of the Pensions Act 2007 (c. 22) for the coming into force of section 15(1) of that Act (abolition of contracting-out for defined contribution pension schemes), and

• “protected rights” has the same meaning as in the 1993 Act (see section 10 of that Act).