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19 Jul 2005 : Column 1646W—continued
Pension Credit
Andrew Rosindell: To ask the Secretary of State for Work and Pensions whether it is his policy to uprate pension credit in proportion to average earnings for the length of this Parliament. [7532]
Mr. Plaskitt: The Government have given an undertaking to increase the guarantee credit in line with earnings up to March 2008.
Pension Protection Fund
Mr. Jim Cunningham: To ask the Secretary of State for Work and Pensions if he will assess the effectiveness of the Pension Protection Fund. [12508]
Margaret Hodge: The Pension Protection Fund (PPF) is up and running very successfully. Since its launch on 6 April 2005 10 schemes have entered an assessment period.
Since the PPF is a brand new organisation, involving a huge raft of new legislation, we have been closely monitoring the effectiveness of our regulations to ensure the PPF's smooth operation.
The PPF is working well with the pensions regulator and effective information flows have been established. The PPF also report that they have developed constructive relationships with a number of independent trustees.
There has been a broad welcome from the pensions industry to the publication of the PPF's Statement of Investment Principles and consultation on the Risk Based Levy.
Pension Schemes/Service
Mike Penning: To ask the Secretary of State for Work and Pensions how the Government calculated the funding required for the financial assistance scheme. [12544]
Mr. Plaskitt: I refer the hon. Member to the reply I gave him on 13 July 2005, Official Report, column 1120W.
Mr. Frank Field: To ask the Secretary of State for Work and Pensions if he will break down the proportion of the total national insurance contracted out rebate going into (a) public and (b) private pension schemes by type of scheme for the latest year for which figures are available. [12146]
Mr. Plaskitt
[holding answer 14 July 2005]: The information is in the table and is based on the number of people in contracted-out schemes during the 2002–03 tax year, the latest year for which information is available:
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Note:
Percentages rounded to nearest whole figure.
Source:
Second Tier Pensions provision" published by the Department for Work and Pensions using the Lifetime Labour Market Database which uses a 1 per cent. sample of national insurance records.
Mrs. James: To ask the Secretary of State for Work and Pensions (1) what the levels of (a) sickness and (b) other staff absence were at the Pension Service Centre in Swansea in the most recent period for which figures are available; and if he will make a statement; [11395]
(2) how many staff there are at the Pension Service Centre in Swansea, broken down by grade pay scales; and if he will make a statement. [11400]
Mr. Plaskitt: A breakdown of numbers of staff at Swansea pension centre is given in Tables 1 and 2. In June 2005 the average number of working days lost per member of staff as a result of sickness was 8.06 days and the average absence due to other factors was 12.63 days.
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| Grade | Whole-time equivalent staff | Headcount |
|---|---|---|
| Administrative Officer | 59.07 | 61 |
| Administrative Assistant | 43.00 | 45 |
| Total | 102.07 | 106 |
Mrs. James: To ask the Secretary of State for Work and Pensions (1) what work has been transferred to the Pension Service Centre in Swansea following closure of other offices in North Devon and Cornwall; and if he will make a statement; [11401]
(2) what volume of work was processed at the Pension Centre in Swansea in each of the last 12 months for which figures are available; and if he will make a statement. [11426]
Mr. Plaskitt: Table 1 sets out the volumes of work processed at Swansea Pension Centre between July 2004 and June 2005. Table 2 indicates the volumes of work processed at the Pension Centre in respect of North Devon, Cornwall and Wales. Work in respect of North Devon and Cornwall was transferred to Swansea between September 2004 and March 2005.
Notes:
1. Swansea pension centre currently covers the whole of Wales, plus North Devon and Cornwall.
2. Figures for state pension live accounts for North Devon and Cornwall are approximate only.
Source:
Swansea pension centre
Mr. Jim Cunningham: To ask the Secretary of State for Work and Pensions how many pension schemes in the Coventry South area would be eligible for assistance from the Financial Assistance Scheme; and if he will make a statement. [12509]
Margaret Hodge:
On 22 February the Government published an indicative list of schemes potentially eligible for the Financial Assistance Scheme (FAS). The list is based on information from a data collection exercise at the end of last year. From the information available none of the schemes on that list appears to be in the Coventry South area. After the FAS regulations
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have come into force, there will be a six-month period during which other schemes will have the opportunity to notify their details to the FAS.
The list of schemes is available in the Library.
Mr. Jim Cunningham: To ask the Secretary of State for Work and Pensions how many pension schemes inCoventry South operate under a defined benefit scheme. [12510]
Margaret Hodge: Information relating specifically to Coventry South is not available. There are around 110 such schemes in Coventry.
Mr. Jim Cunningham: To ask the Secretary of State for Work and Pensions when the Government plan to review the (a) Pension Protection Fund and (b) Financial Assistance Scheme to evaluate their efficiency and the quality of assistance they provide. [12511]
Margaret Hodge: While the Department has no responsibilities in the operational activities of the Pension Protection Fund, it has a primary role of stewardship. This involves active engagement with the organisation to ensure value for money and effective delivery against objectives.
The Pension Protection Fund must adhere to formal reporting and audit requirements and engage in regular Accountability Reviews with the Department. As a non-departmental public body, the Pension Protection Fund is accountable to Parliament and is legally required to lay its annual report and accounts before Parliament.
Board members are accountable for their decisions and performance—they must adhere to the legal framework of the organisation, and they can be removed from office for not meeting their terms and conditions. The Government made clear, on introducing the Financial Assistance Scheme (FAS) in May 2004, that its operation will be reviewed after three years. In addition, a report on FAS's operation for each financial year will be laid before Parliament.
Mr. Denham: To ask the Secretary of State for Work and Pensions if he will estimate the national insurance rebates for pension provision that will be payable in 2026. [12794]
Mr. Plaskitt: The Government Actuary's Department has estimated that, assuming real earnings growth of 2 per cent. a year, the national insurance rebate for pension provision in Great Britain that would be payable in 2026 is £17.3 billion in cash terms, or £10.3 billion in constant 2005–06 prices. These estimates are based on the projections carried out for the update of the Quinquennial Review of the National Insurance Fund published in December 2004.
Derek Wyatt: To ask the Secretary of State for Work and Pensions what the level of the core benefit in the Financial Assistance Scheme is; and if he will make a statement. [13316]
Margaret Hodge:
A qualifying member or former member of a scheme who was within three years of his or her normal retirement age for that scheme, on 14 May 2004, will receive assistance that will top up his or her scheme pension to a level broadly equivalent to 80 per cent. of his or her expected pension. Payments will be subject to a de minimis level and a cap.
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The expected pension is the core component of the pension that a scheme member would have received each year had their scheme been able to meet its liabilities to in full. For non-pensioner members will look at the rate of accrued pension when active service ceased. For pensioner members we will look at the rate of unreduced pension that would have been in payment had the scheme not started to wind-up. Rights will be revalued to age 65.
If a qualifying member dies at any point after the start of scheme wind-up, his or her surviving spouse or civil partner will receive FAS payments at 50 per cent. of the member's entitlement.
Mr. Laws: To ask the Secretary of State for Work and Pensions pursuant to the answer of 11 July 2005, Official Report, column 679W, on the Financial Assistance Scheme, for what reasons the rate payable to the terminally ill is set at 60 per cent.; and whether this is the case even where the members' pension scheme has completed wind-up. [13513]
Margaret Hodge: Where a pension scheme qualifying for help from the Financial Assistance Scheme (FAS) has completed wind-up, assistance for eligible members (including terminally ill people) will top up to 80 per cent. of core pension rights.
The top-up rate for discretionary initial payments made to eligible members before wind-up has been completed, including terminally ill people, has been set at 60 per cent. of core pension rights. This is because at that stage scheme trustees will not know how the scheme's assets compare with its liabilities and how much pension individual members have lost. This follows the precedent whereby trustees may, where funds allow, make interim payments at a safe rate to pensioner members from the pension scheme itself before wind-up is completed. Initial payments from the FAS will take account of any interim payments from the pension scheme. The top-up rate will be adjusted to 80 per cent. on the completion of wind-up and, if needed, arrears will be paid to compensate for the lower rate of payment during wind-up.
Mr. Laws: To ask the Secretary of State for Work and Pensions pursuant to the answer of 11 July 2005, Official Report, column 679W, on the Financial Assistance Scheme, if he will list the occasions when his Department has encouraged the trustees of schemes eligible for the Financial Assistance Scheme to start making payments as quickly as possible. [13514]
Margaret Hodge: In the written ministerial statement on 2 December 2004, Official Report, columns 64–66WS, we made clear that trustees should fulfil their duty to wind-up schemes in an expeditious manner (including annuitisation where appropriate). That remains the Government's position.
Once the formal scheme notification period for the Financial Assistance Scheme (FAS) starts on 1 September 2005, guidance will be available for trustees to explain the FAS and the requirements it places upon them, and to re-emphasise the importance of their making payments to their members as soon as they can.
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