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New Clause—(Approval Of Retirement Benefit Schemes)

Volume 439: debated on Wednesday 9 July 1947

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(1) Subject to the provisions of the next succeeding section the Commissioners of Inland Revenue shall approve a retirement benefits scheme for the purpose of subsection (2) of the last preceding section unless it appears to them that the scheme does not fall within the said subsection (2) by reason of the fact that the main benefit afforded thereby is not such as is therein mentioned, or that, although the main benefit is such as aforesaid, the scheme fails to satisfy some one or more of the following conditions, that is to say—

  • (a) that that benefit will accrue only on retirement at a specified age or on earlier retirement through incapacity or on death;
  • (b) that the nature of the benefits afforded by the scheme is the same in relation to all the persons to whom the scheme relates;
  • (c) that the proportion between the value of the pensions or annuities provided for by the scheme, in so far as they are not com-mutable, and the value of all other benefits afforded thereby, including the value of so much, if any, of the said pensions or annuities as is commutable, is reasonably comparable to the proportion between the values of such benefits respectively as are usually afforded by statutory superannuation schemes;
  • (d) that the aggregate value of the benefits, of whatever nature, afforded by the scheme is reasonably comparable to the aggregate value of the benefits usually afforded by statutory superannuation schemes in like circumstances;
  • (e)that the pensions or annuities provided for by the scheme are not assignable. either in whole or in part; and
  • (f) that no service of a person, in whatever capacity, rendered by him while he is a controlling director of the body corporate is taken into account for any of the purposes of the scheme:
  • Provided that the said Commissioners may, if they think fit, having regard to the facts of the particular case, approve a scheme the main benefit afforded whereby is such as is mentioned in subsection (2) of the last preceding section notwithstanding that it may not, in one or more respects, satisfy the whole of the aforesaid conditions.

    (2) Where the said Commissioners have given their approval to a scheme, they may at any time, by notice in writing to the body corporate in question, withdraw their approval on such grounds and as from such date as may be specified in the notice.

    (3) In the case of a scheme in existence at the passing of this Act the main benefit afforded whereby is not then such as is mentioned in subsection (2) of the last preceding section, or which does not then satisfy the conditions specified in subsection (1) of this section, but which is so altered before the sixth day of April, nineteen hundred and forty-eight, or within such further time as the said Commissioners may allow, as to be approvable under this section, approval there of after the sixth day of April, nineteen hundred and forty-seven shall, if the said Commissioners so direct, be deemed to have had effect as from that day.— [ The Solicitor-General.]

    Brought up, and read the First time.

    Again I have one or two short questions. Subsection (1, a)says:

    "Benefit will accrue only on retirement at a specified age…"
    Supposing that a scheme is approved in which the retirement age is 60, and then it happens that a man is useful to the company, which wants him to go on working. It might be—and I am not a lawyer—that he will have to retire at 60 if he is to be exempt. I would be grateful if that point were cleared up. Paragraph (d)of the same Subsection talks about "the aggregate value of benefits, of whatever nature." I am not clear what "aggregate value" means, and how it will be calculated. In regard to that Subsection in general, I assume there is no restriction on the limits of this aggregate value—provided that the aggregate value bears a reasonable relation to the scale of salary and the length of service? Those are my three points.

    With regard to the first question, it would depend on the exact situation. Supposing he was to retire at 60 and the age was put up to 65, that would still be the specified age. There is still discretion, notwithstanding developments of that sort. The important thing is that there should be a reasonable comparison between superannuation schemes in similar circumstances and the scheme under consideration.

    Question put, and agreed to.

    Clause read a Second time, and added to the Bill.