Clause 9 - Pensions promise obtained from third party

Part of Pension Schemes Bill – in a Public Bill Committee at 11:00 am on 28th October 2014.

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Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions 11:00 am, 28th October 2014

The purpose of amendment 8 is to clarify that regulations made under clause 9 may impose requirements on trustees in the context of a trust-based scheme, and on managers in the context of a scheme  not established under trust. Clause 9 includes a regulation-making power which provides that the trustees or managers of a DB scheme or a shared-risk scheme must not obtain a pensions promise from a third party unless conditions specified in the regulations are met.

The amendment inserts a definition of “trustees or managers” into subsection (3) of clause 9 which confirms that

“trustees or managers means… in relation to a scheme established under a trust, the trustees, and… in relation to any other scheme, the managers.”

Amendment 26 inserts the same definition of “trustees or managers” into clause 36 to clarify that regulations made under part 3 may impose obligations on trustees in the context of a trust-based scheme, and on managers in the context of a scheme not established under trust. That is a bit like we did in the last group. We are doing it here and, to save us coming back to it when we get to the collectives bit, we are doing exactly the same thing with clause 36.

Amendment 26 clarifies how the regulatory requirements should apply in schemes offering collective benefits where there may be both trustees and managers. The amendment makes it clear that regulations made under part 3 may impose obligations on trustees in the context of a trust-based scheme, and on managers in the context of a scheme not established under trust.

We have used the term “trustees or managers” in various parts of the Bill. Our main aim in inserting a definition for the term “trustees or managers” is to make it clear that where either an occupational or a personal pension scheme is established under trust, any regulatory requirement on “trustees or managers” will fall on the trustees even if there are other people, other managers effectively. But if the scheme is not established under trust we want the requirements to bite on the person responsible for the management of the scheme.

There is a kind of hierarchy going on here. If it is a trust-based pension scheme where we use the phrase “trustees or managers” in the legislation, we do not mean managers if there is a trustee knocking around, or if there is no trustee, because it is not a trust-based scheme, then we mean the person responsible for the management of the scheme. I hope that has helped with what I hope are relatively uncontentious amendments. I commend them to the Committee.