New Clause 12 - Valuations of closed schemes

Pensions Bill – in a Public Bill Committee at 9:30 am on 27th April 2004.

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No. NC12, to move the following Clause:—

'(1) Regulations may make provision requiring the trustees or managers of closed schemes to obtain actuarial valuations of the scheme at such intervals as may be prescribed for the purposes of enabling them to determine—

(a) the benefits payable under the scheme;

(b) whether to make an application under section [applications and notifications where closed schemes have insufficient assets].

(2) Regulations under this section may prescribe how—

(a) the assets, the full scheme liabilities and the protected liabilities in relation to closed schemes, and

(b) their amount or value,

are to be determined, calculated and verified.

(3) Subject to any provision made under subsection (2), those matters are to be determined, calculated and verified in accordance with guidance issued by the Board.

(4) In calculating the amount of any liabilities for the purposes of a valuation required by virtue of this section, a provision of the scheme which limits the amount of its liabilities by reference to the value of its assets is to be disregarded.

(5) In this section, in relation to a scheme—

''actuarial valuation'' means a written valuation of—

(a) the scheme's assets,

(b) the full scheme liabilities, and

(c) the protected liabilities in relation to the scheme;

''the actuary'' means—

(a) the actuary appointed under section 47(1)(b) of the Pensions Act 1995 (professional advisers) in relation to the scheme, or

(b) if no such actuary has been appointed, a person with prescribed qualifications;

''assets'' do not include assets representing the value of any rights in respect of money purchase benefits under the scheme;

''closed scheme'' has the same meaning as in section [treatment of closed schemes required to wind up];

''full scheme liabilities'' means—

(a) the liabilities under the scheme to or in respect of members of the scheme,

(b) other liabilities of the scheme, and

(c) the estimated cost of winding up the scheme;

''liabilities'' does not include liabilities in respect of money purchase benefits under the scheme.'.—[Malcolm Wicks.]

Brought up, read the First and Second time, and added to the Bill.