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9 Oct 2006 : Column 22W—continued
Pensioners
Jo Swinson: To ask the Secretary of State for Work and Pensions pursuant to the answer of 23 May 2006, Official Report, column 1682W, on pensioners, what factors were taken into account in deciding to collect information on eligibility for pension credit only at Great Britain level. [89897]
James Purnell: The information is not available from administrative data and therefore needs to be collected by specific surveys. The cost of developing and conducting a survey where all local areas are adequately represented would be prohibitive.
Pensions
Dr. Cable: To ask the Secretary of State for Work and Pensions what plans he has (a) to meet and (b) encourage other provision to meet the need for independent professional financial advice in the workplace on pension savings identified in the Pensions White Paper. [89292]
James Purnell: The White Paper endorsed the Pensions Commission's view that it is vital that communication with members of the new scheme is designed to enable them, as best as possible, to make informed decisions about their saving. However, it did not specifically identify a need for independent professional financial advice.
Recognising the importance of information, the White Paper consultation asks for comments on what individuals would need in each proposed approach. The responses will inform the work we are doing in the period before implementation of the new system, when we are actively pursuing three distinct strands of work: developing the information and communications strategy to support the introduction of personal accounts; continuing our work on improving public understanding of pensions, and working with the FSA and others on the broader financial capability strategy. This work includes testing the workplace as a delivery mechanism for financial information, in particular information about pensions.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions (1) how many occupational pension schemes have (a) completed winding up and (b) started the process of winding up since 1997; and how many pension scheme members are affected; [90196]
(2) how many active members there were in defined benefit schemes which have closed to new members since 1997 in (a) 1997 and (b) 2005; [90343]
(3) how many defined benefit schemes have closed to new members in each year since 1995; and how many active members there were in aggregate in these schemes at the time that they closed to new members; [90410]
(4) how many people who joined a private sector workplace pension scheme during the latest 12 month period for which figures are available will receive (a) a defined benefit pension linked to final salary, (b) any other pension with a defined benefit component, (c) a defined contribution pension with no employer contribution, (d) a defined contribution pension with an employer contribution worth less than 3 per cent. of gross salary, excluding contracted-out rebates, (e) a defined contribution pension with an employer contribution at least 3 per cent. of gross salary but no more than 6 per cent. of gross salary, excluding contracted-out rebates and (f) an employer contribution worth more than 6 per cent. of gross salary, excluding contracted-out rebates; [90442]
(5) how many individuals aged 22 years or over and earning at least £5,000 a year are employed by organisations outside the public sector, including the BBC and Post Office, which operate workplace pension schemes with employer contributions worth (a) at least 2.5 per cent. of gross salary and (b) at least 3 per cent. of gross salary. [90443]
James Purnell: This information is not available.
Mr. Philip Hammond:
To ask the Secretary of State for Work and Pensions (1) how many private sector employers automatically enrol all employees aged
22 years or over and earning more than £5,000 a year into a workplace pension scheme; and how many people in aggregate work for these employers; [90340]
(2) how many people joined a private sector workplace pension scheme during the latest 12 month period for which figures are available. [90342]
James Purnell: This information is not available.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions how many people are projected to reach state pension age in each financial year from 2007-08 to 2067-68 on the assumption that Parliament legislates to raise state pension age in the way proposed in the Pensions White Paper, Security in retirement: Towards a New Pension System and that no further changes to state pension age occur. [90393]
James Purnell: The answer is given in the following table:
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions if he will publish an example illustrating how a pension scheme could convert guaranteed minimum pension rights into scheme benefits on an actuarially equivalent basis as proposed in paragraph 2.31 of the Pensions White Paper. [90396]
James Purnell: The example given as follows is for illustrative purposes only. It is not intended to cover all the details of the calculation and the figures are indicative only. The results of any Guaranteed Minimum Pension (GMP) conversion will depend on the precise characteristics of the specific scheme and the members involved.
A contracted-out, defined benefit scheme increases deferred pensions in line with the minimum statutory requirements (including the requirements on the GMP). They decide to convert the GMP of a deferred member who left the scheme on 1 July 1995. On leaving he had a total deferred pension of £1,000 a year, of which £150 was underpinned by the GMP.
The pension scheme’s actuary, based on a set of assumptions about the future, calculates that the current actuarial value of all the existing benefits (including the GMP) is £20,000.
Using the same actuarial assumptions, the actuary calculates that, for £20,000, a pension of £1,200 a year could be provided based on scheme rules.
This member’s entitlement is increased to £1,200. He no longer has a GMP underpin and the new pension entitlement is governed by the rules of the scheme and any legislation that applies to scheme benefits.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions if he will estimate the aggregate value of guaranteed minimum pension rights belonging to deferred members of occupational pension schemes that are subject to fixed rate revaluation at the rate of (a) 8.5 per cent. for individuals who ceased to be active members between 6 April 1978 and 5 April 1988, (b) 7.5 per cent. for individuals who ceased to be active members between 6 April 1988 and 5 April 1993, (c) 7.0 per cent. for individuals who ceased to be active members between 6 April 1993 and 5 April 1997, (d) 6.25 per cent. for individuals who ceased to be active members between 6 April 1997 and 5 April 2002 and (e) 4.5 per cent. for individuals who ceased to be active members on or after 6 April 2002. [90397]
James Purnell: The information is not available and could be obtained only at disproportionate cost.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions when it will be necessary for the Government to publish its proposals for the design of personal accounts in order to introduce the new system by April 2012. [90429]
James Purnell: We intend to outline further proposals for personal accounts later this year.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions pursuant to his oral statement of 16 March 2006, Official Report, column 1627, on occupational pensions, what assumptions underlie his estimate of the cost of rising life expectancy since 1997 for UK pension funds. [90430]
James Purnell: During the oral statement I said that both the stock market fall of the late 1990s and rising longevity had cost UK pension funds £250 billion. To clarify, between 1999 and 2002 the market value of occupational pension scheme assets reduced by a total of around £250 billion. We believe this reduction was largely a result of the impact of the stock market fall. Rising longevity would have increased pension fund liabilities during this period, also leading to increases in scheme costs.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions whether it is the Government's intention that the timetable for increasing the state pension age as set out in the Pensions White Paper, Security in Retirement: Towards a New Pension System, will be amended if changes are made to projected increases in life expectancy. [90431]
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