Select Committee on Social Security Fifth Report


Letter to the Clerk of the Committee from Professor Heather Joshi, Institute of Education, and Dr Hugh Davies, Economics Department, Birkbeck College, University of London (PS 2)

  Thank you for asking for our opinion on the Welfare Reform and Pensions Bill and its Explanatory Notes. We have only two observations to offer.

  1. We found no reference to pension rights earned overseas. In some cases, at least, these might not be `shareable' under British law. Perhaps this contingency could be mentioned, together with the instruction that where such rights exist they should be taken into account in negotiation.

  2. The notes to Clause 23 contain an example of how a windfall gain might occur in a final salary scheme, where a pension had been divided. It provides for that windfall to be passed to the scheme member (rather than the scheme itself, or the ex spouse). As we noted in our evidence,[50] it seems a little odd to us that the gain should not be `shared' between the member and the former spouse. If this rule is to remain in place, its operation should be sufficiently obvious to be taken into account in the negotiations. At the moment it is not at all clear that Clause 23 subsection (2) is setting such an arrangement in place. The example given in the notes may just serve to confirm the worries of divorcing women that the method of calculation of pension rights is weighted against them (or could be under certain circumstances).

  We hope that this helps to bring about a speedy and comprehensible conclusion to the legislation.

18 February 1999

50   Not printed. See HC 869 p. 222, para 4.2. Back

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