17.— Section 50 of the Principal Act is amended—

(a) by the substitution of the following subsections for subsection (1):

“(1) The Board may, by notice in writing, direct the trustees of a relevant scheme to take such measures in respect of members of the scheme then in relevant employment, who have not reached normal pensionable age, or members whose service in relevant employment has ceased, who have not reached normal pensionable age and who have an entitlement to a preserved benefit or any other benefit under the scheme, the payment of which has not commenced, as may be necessary to reduce the benefits that would be payable to or in respect of those members from the scheme where—

(a) the trustees of the scheme fail to submit an actuarial funding certificate within the period specified in section 43,

(b) the actuarial funding certificate certifies that the scheme does not satisfy the funding standard and the trustees of the scheme have not submitted a funding proposal in accordance with section 49,

(c) the actuarial funding certificate certifies that the scheme does not satisfy the funding standard and the trustees of the scheme have submitted a funding proposal in accordance with section 49, or

(d) the Board consents to the amendment of a scheme in accordance with section 50A (inserted by section 18 of the Social Welfare and Pensions Act 2009).

(1A) The Board may, by notice in writing, direct the trustees of a scheme to take such measures as may be necessary to reduce future increases in benefits payable from the scheme to or in respect of persons receiving benefits under the scheme or persons who have reached normal pensionable age, where—

(a) the trustees of the scheme fail to submit an actuarial funding certificate within the period specified in section 43,

(b) the actuarial funding certificate certifies that the scheme does not satisfy the funding standard and the trustees of the scheme have not submitted a funding proposal in accordance with section 49,

(c) the actuarial funding certificate certifies that the scheme does not satisfy the funding standard and the trustees of the scheme have submitted a funding proposal in accordance with section 49, or

(d) the Board consents to the amendment of a scheme in accordance with section 50A (inserted by section 18 of the Social Welfare and Pensions Act 2009).”,

(b) the substitution of the following subsection for subsection (2):

“(2) Paragraph 2(2) of the Second Schedule and paragraph 4(b)(i)(I) of the Third Schedule shall not apply in so far only as they conflict with a reduction in benefits pursuant to a direction under subsection (1).

(2A) A reduction in benefits effected pursuant to a direction under subsection (1) or (1A) shall—

(a) be such as, in the opinion of the actuary concerned, ensures that, immediately following the reduction, the scheme will satisfy the funding standard in accordance with section 44, or

(b) in the case of a scheme referred to in subsection (1)(c) or (1A)(c), be such as, in the opinion of the actuary concerned, ensures that the scheme could reasonably be expected to satisfy the funding standard at the effective date of the next actuarial funding certificate or, where applicable, any later date specified under section 49(3).”,

and

(c) in subsection (3), by—

(i) the substitution of “subsection (1) or (1A)” for “subsection (1)”, and

(ii) the substitution of the following subparagraph for subparagraph (i) of paragraph (a) (inserted by section 19 of the Pensions (Amendment) Act 1996):

“(i) take such measures to reduce, in respect of—

(I) members of the scheme then in relevant employment who had not reached normal pensionable age,

(II) members whose service in relevant employment has ceased and who have not reached normal pensionable age and who have an entitlement to a preserved benefit or any other benefit under the scheme, and

(III) persons receiving benefits under the scheme or who have reached normal pensionable age,

the benefits that would be payable to or in respect of them from the scheme as—

(A) are necessary for the purpose of ensuring that the scheme will, in the opinion of the actuary concerned, satisfy the funding standard in accordance with section 44 immediately following the reduction, or

(B) in the opinion of the actuary concerned, will, in the case of a scheme in respect of which a funding proposal has been submitted to the Board pursuant to section 49, ensure that the scheme could reasonably be expected to satisfy the funding standard at the effective date of the next actuarial funding certificate or, where applicable, any later date specified under section 49(3), and”.