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Mr. Flight: Will the Minister tell us what is the difference between a member of a pension scheme with fewer than 50 members who gets an annuity when they retire and someone with a money purchase pension who buys an annuity when they retire? Is she aware of any insurance company that offers some kind of magic formula that puts a defined benefit label on to a defined contribution scheme? I think that she will find that no such product exists. There is no difference between a bought annuity and a defined contribution pension.
Ruth Kelly: I agree that such products may not exist yet, because there is no demand for them. However, as I said in Committee, I firmly believe that there is a market for this kind of financial product. It is not for me to tell the market what to do, but if there is a market for such a product, I am sure that the market will supply it. If not, presumably it will not. The Revenue's contacts in the pensions industry have confirmed that this is also their expectation.
We could continue to debate this matter at length, but we will not know the answer unless someone identifies a demand and proceeds to provide such a product. I would expect that any such demand will be met, and I am sure that the hon. Gentleman would accept that that is likely to be the case, given his feelings on the matter. In that case, the unfairness that he supposes to exist, and which I refute, will not exist at all. On that basis, perhaps he will acknowledge that his amendments are unnecessary.
Amendment agreed to.
7 Jul 2004 : Column 930
Clause 212
Amendment made: No. 118, in page 184, line 44, at end insert 'qualifying'.—[Dawn Primarolo.]
Schedule 32
Amendments made: No. 119, in page 472, line 27, leave out from 'that' to end of line 38 and insert
'at the time when the annual rate of the individual's pension is increased there are at least 50 pensioner members of the pension scheme, and
(b) all the scheme pensions being paid under the pension scheme to all the pensioner members of the pension scheme are at that time increased at the same rate.'.
No. 120, in page 473, line 2, leave out 'its previous rate' and insert
'the rate at which it was payable on the day on which the individual became entitled to it'.
No. 121, in page 473, line 6, leave out
'pension was first payable at the previous rate'
and insert
'individual became entitled to the pension'.
No. 122, in page 473, line 20, leave out
'first month in which the pension was payable at the previous rate'
and insert
'month in which the individual became entitled to the pension'.
No. 123, in page 473, line 30, leave out 'its previous rate' and insert
'the rate at which it was payable on the day on which the individual became entitled to it'.
No. 124, in page 473, line 38, leave out from 'is' to end of line 40 and insert
'(subject to sub-paragraph (2)) the amount by which—
(a) the increased annual rate of the pension, exceeds
(b) the rate at which it was payable on the day on which the individual became entitled to it, as increased by the permitted margin.
(2) But if one or more benefit crystallisation events has or have previously occurred by reason of the individual having become entitled to payment of the pension at an increased rate, XP does not include the amount crystallised by that event or the aggregate of the amounts crystallised by those events.'.
No. 125, in page 474, line 15, at end insert—
'Benefit crystallisation event 8: prevention of overlap with other events
18 (1) This paragraph applies for the purposes of benefit crystallisation event 8.
(2) Where any of the sums or assets transferred represent the whole or part of the individual's unsecured pension fund, the amount crystallised by the event is to be reduced by the amount (or the appropriate proportion of the amount) previously crystallised on the designation of the sums or assets as available for the payment of unsecured pension.
7 Jul 2004 : Column 931
(3) Where after the transfer a scheme pension to which the individual has become entitled before the transfer is to be payable out of sums or assets transferred, the amount crystallised by the event is to be reduced by the amount (or the appropriate proportion of the amount) previously crystallised in relation to the scheme pension.'.—[Dawn Primarolo.]
Clause 220
Amendment made: No. 126, in page 191, line 19, leave out
'that is not a registered pension scheme'.—[Dawn Primarolo.]
Clause 228
Amendment made: No. 127, in page 196, line 41, after 'a' insert 'qualifying'.—[Dawn Primarolo.]
Clause 232
Amendment made: No. 128, in page 199, line 11, after 'a' insert 'qualifying'.—[Dawn Primarolo.]
Clause 239
Amendments made: No. 129, in page 203, line 19, at end insert—
'(c) in respect of contributions under a qualifying overseas pension scheme in respect of an individual who is a relevant migrant member of the pension scheme in relation to the contributions,".'.
No. 130, in page 203, leave out lines 27 to 29 and insert—
' " "qualifying overseas pension scheme" has the same meaning as in Schedule (Overseas pension schemes: migrant member relief) to the Finance Act 2004 (see paragraphs 5 and 6 of that Schedule);
"registered pension scheme" has the same meaning as in Part 4 of that Act (see section 147 of that Act);
"relevant migrant member" has the same meaning as in Schedule (Overseas pension schemes: migrant member relief) to that Act (see paragraph 4 of that Schedule);'.—[Dawn Primarolo.]
Clause 243
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