New Clause 45 - Meaning of ''service company'' and ''insufficiently resourced''

Pensions Bill – in a Public Bill Committee at 2:45 pm on 27th April 2004.

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'(1) This section applies for the purposes of section [Financial support directions] (financial support directions).

(2) A company (''C'') is a ''service company'' at the relevant time if C's turnover, as shown in the latest available accounts for C prepared in accordance with section 226 of the Companies Act 1985 (c. 6), is solely or principally derived from amounts charged for the provision of the services of employees of C to other companies who are members of the same group of companies as C.

(3) The employer in relation to a scheme is insufficiently resourced at the relevant time if—

(a) at that time the employer has insufficient net assets to enable it to meet a prescribed percentage of the estimated section 75 debt in relation to the scheme, and

(b) there is at that time a person who is connected with, or an associate of, the employer and who has sufficient net assets to meet that percentage of that debt.

(4) For the purposes of subsection (3) a person's net assets are to be determined, calculated and verified in a prescribed manner.

(5) In this section the ''estimated section 75 debt'', in relation to a scheme, means the amount which the Regulator estimates to be the amount of the debt which would become due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets) if—

(a) subsection (2) of that section applied, and

(b) the time designated by the trustees or managers of the scheme for the purposes of that subsection were the relevant time.

(6) When calculating the estimated section 75 debt in relation to a scheme under subsection (5), the amount of any debt due at the relevant time from the employer under section 75 of the Pensions Act 1995 (c. 26) is to be disregarded.

(7) In this section ''the relevant time'' has the same meaning as in section [Financial support directions].'.—[Malcolm Wicks.]

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