Commentary on Sections Public body pension schemes Section 32: Restriction of certain existing public body pension schemes
Section 32 contains provision for the Department of Finance and Personnel to specify public bodies whose pension schemes would be restricted, so that no benefits are provided under the scheme to or in respect of a person in relation to their service in the schemes after a date to be specified.
Subsection (1) provides powers for the Department to specify by order named bodies, offices, or descriptions of bodies or offices, to which the section would apply.
Subsection (2) places a duty on the public authority which is responsible for such a scheme to close the scheme for future service after a date determined by the authority.
Subsection (3) sets out that subsection (2) does not apply to defined contributions schemes or injury and compensation schemes. The obligation to secure that no further benefits are accrued beyond the date set will only apply to defined benefits schemes.
Subsection (4) allows pension schemes which are required to be closed under subsection (2) to continue to provide benefits by way of exception for certain members who are eligible for transitional protection. Where transitional protection is offered, it is expected to be offered on the same basis and timing as transitional protection in the schemes that are closed to future accruals under section 18. This will mean that the transitional protection is expected to be based upon a starting date of 1st April 2012, rather than any later date, despite the later progress of reform to public body pension schemes. Subsections (7) and (8) of section 18 will apply to transitional arrangements in the public body schemes closed to future accruals.
Subsection (5) allows for the obligation to prevent future accrual of rights in public body defined benefit schemes, and exceptions to that, to be achieved by amending existing public body defined benefit schemes.
Subsection (6) explicitly sets out that subsection (2) also applies to death in service benefits.
Subsection (7) allows the public authorities responsible for a public body scheme to establish new pension schemes for staff or office-holders where it is not possible for those persons to become members of one of the major schemes established under section 1. Section 31 provides details of the types of scheme that may be established in such cases.
Subsection (8) prevents a public authority which closes a scheme in accordance with subsection (2) from exercising any existing statutory function or other power so as to establish a new defined benefits scheme. Its purpose is to ensure that replacement schemes will only be made using the power in subsection (7).
Subsection (9) provides that where an existing public body scheme was established by trust deed, subsections (2) and (4) supersede any conflicting provision of the deed or of the law relating to trusts.
Subsection (10) provides that an order made by the Department of Finance and Personnel under subsection (1) may also make consequential and supplementary provision, including amendments to legislation.
Subsection (11) provides that an order made by the Department of Finance and Personnel under subsection (1) is subject to the negative resolution.
Subsection (12) allows subsection (1) to be used to close to future accrual schemes made before or after section 31 comes into force.
Subsection (13) indicates that the provisions of Schedule 7, which provides for a “final salary link”, apply for the benefit of members of public body schemes restricted under this section.