House of Commons Public Bill Committee Proceedings

House of Commons

Session 2006 - 07
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Other Bills before Parliament

19

House of Commons

Tuesday 6th February 2007

Public Bill Committee Proceedings

Pensions Bill

[ninth and tenth sittings]

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Withdrawn  16

Schedule  6,  page  59,  line  13,  leave out from ‘contain’ to ‘of’ in line 14 and insert ‘a

majority of persons who are either members or employees’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  17

Schedule  6,  page  59,  line  18,  leave out paragraph 10.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  14

Schedule  6,  page  59,  line  20,  at end insert—

‘10A (1)
The Authority must establish a committee for the purpose of representing the

interests of scheme members and prospective scheme members.

      (2)
The chairman of the committee must be a consumer representative appointed

under paragraphs 1(1)(b) and 1(3A).’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Withdrawn  18

Schedule  6,  page  62,  line  28,  at end insert—

‘18A
Such grants shall be classified as—

(a)
policy grants; or

(b)
operational grants.

18B(1)
Policy grants shall be used in support of the Authority’s work on advising on

preparing for the implementation of, or the modification of, any relevant

proposals about personal accounts.

      (2)
Policy grants shall not be made more than two years after the commencement

of this Act.

Public Bill Committee Proceedings: 6th February 2007
20

Pensions Bill, continued

18C
Operational grants shall be used in support of the Authority’s work in

preparing for the implementation of proposals for personal accounts.’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  19

Schedule  6,  page  62,  line  34,  at end insert—

  ‘(2A)
A statement under sub-paragraph (1)(b) must show separately the purposes to

which policy grants and operational grants have been applied.

    (2B)
A statement under sub-paragraph (1)(b) must show the interest charges that

would have accrued on the operational grants if they had been loans taken out

at commercial rates of interest.’.

Schedule Agreed to.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Withdrawn  83

Clause  19,  page  20,  line  35,  leave out ‘appropriate’ and insert ‘strictly necessary’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  84

Clause  19,  page  21,  line  2,  leave out from ‘State’ to ‘which’ in line 3.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not selected  85

Clause  19,  page  21,  line  5,  leave out ‘pensions’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  20

Clause  19,  page  21,  line  11,  at end insert—

‘(2A)
It shall be the duty of the Authority to carry out their functions under subsection

(1) in such manner as—

(a)
appears to them to ensure, so far as they are facilitating the

implementation of any such proposals, that there is effective co-operation

in relation to the implementation of the proposals between themselves,

the Pensions Regulator, the Financial Services Authority and the

Secretary of State; and

(b)
does not interfere with the existing provision of personal or occupational

schemes.’.

Public Bill Committee Proceedings: 6th February 2007
21

Pensions Bill, continued

Mr David Laws

Lorely Burt

Not called  40

Clause  19,  page  21,  line  11,  at end insert—

‘(2A)
In discharging its functions under this Part, the Authority shall publish a report on

how it can ensure that individuals who have money invested in Personal Accounts

and those considering doing so in future will have access to generic financial

advice.’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  86

Clause  19,  page  21,  line  26,  leave out subsection (5).

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  21

Clause  19,  page  21,  line  27,  at end insert—

‘(5A)
In discharging its function under this section, the Authority shall ensure that its

actions and advice support the following objectives for the scheme—

(a)
ensuring that the overall outcome, taking account of the impact on the

existing market, is an increase in the number of people saving and the

overall amount being saved;

(b)
optimising levels of participation and contribution among the target

group;

(c)
setting an investment strategy in the best interests of members;

(d)
minimising burdens on employers;

(e)
minimising the impact on other high-quality pension provision;

(f)
assuring security of administration;

(g)
governing in the best interests of members and beneficiaries;

(h)
ensuring that the board acts impartially, prudently, responsibly and

honestly;

(i)
delivering appropriate levels of choice;

(j)
achieving charges that are fair and reasonable;

(k)
ensuring the funds are invested in the best interests of the members.

(5B)
Her Majesty may from time to time by Order in Council make provision for

amending the objectives set out in subsection (5A).

(5C)
No recommendation shall be made to Her Majesty to make an Order in Council

under subsection (5B) above unless a draft of the Order has been approved by

resolution of each House of Parliament.’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  22

Clause  19,  page  21,  line  27,  at end insert—

‘(5A)
In making preparations and giving advice, the Authority shall seek to ensure that

the full costs of setting up and operating the scheme are covered by charges to be

made either to employers or to members and not met from other sources.’.

Public Bill Committee Proceedings: 6th February 2007
22

Pensions Bill, continued

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  87

Clause  19,  page  21,  line  29,  at end insert ‘, and such guidance must be reported to

Parliament by an oral statement made by the Secretary of State.’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  23

Clause  19,  page  21,  line  31,  at end insert—

‘(7A)
Before issuing guidance under subsection (6) the Secretary of State shall

consult—

(a)
the Authority;

(b)
organisations appearing to him to be representative of consumers;

(c)
organisations appearing to him to be representative of employees;

(d)
organisations appearing to him to be representative of employers;

(e)
organisations appearing to him to be representative of the financial

services industry;

(f)
such other persons as the Secretary of State considers it appropriate to

consult in relation to the guidance.

(7B)
A draft of any guidance proposed to be issued under this section shall be laid

before each House of Parliament.

(7C)
Guidance shall not be issued under this section until after the period of forty days

beginning with—

(a)
the day on which the draft is laid before each House of Parliament; or

(b)
if the draft is laid before the House of Lords on one day and the House of

Commons on another, the later of those two days.

(7D)
If, before the end of that period, either House resolves that the guidance should

not be issued, the Secretary of State must not issue it.

(7E)
In reckoning any period of forty days for the purposes of subsection (7C) or (7D),

no account shall be taken of any time during which—

(a)
Parliament is dissolved or prorogued, or

(b)
both Houses are adjourned for more than four days.

(7F)
The Secretary of State shall arrange for any guidance issued under this section to

published in such manner as he considers appropriate.’.

Mr David Laws

Lorely Burt

Not called  38

Clause  19,  page  21,  line  32,  at end add—

‘(9)
Prior to Parliament’s approval of proposals the Authority must evaluate the effect

of means testing on levels of saving in personal accounts and its impact on returns

in personal accounts and thereafter conduct and publish evaluations annually.’.

Mr David Laws

Lorely Burt

Not called  39

Clause  19,  page  21,  line  32,  at end insert—

‘(9)
The Authority shall carry out a gender impact assessment of relevant proposals

regarding saving in personal accounts as specified in subsection (2).’.

Public Bill Committee Proceedings: 6th February 2007
23

Pensions Bill, continued

Mr David Laws

Lorely Burt

Not called  65

Clause  19,  page  21,  line  32,  at end add—

‘(9)
The Authority shall, no later than 1st April 2008, publish a strategy for

maximising participation in the new system of personal accounts in which it

shall—

(a)
set out and give full explanation of targets for participation in personal

accounts;

(b)
identify at-risk groups where auto-enrolment might risk very low rates or

return;

(c)
outline contingency plans for coping with the workload if participation is

higher than expected;

(d)
outline its strategy for maximising the participation among employees in

small businesses.’.

Mr David Laws

Lorely Burt

Not called  66

Clause  19,  page  21,  line  32,  at end add—

‘(9)
The Authority shall prepare and publish a report, no later than 1st April 2008, on

measures it proposes to take to monitor the impact of the new personal accounts

scheme on existing occupational pensions provision and to guard against

levelling down.’.

Mr David Laws

Lorely Burt

Not called  67

Clause  19,  page  21,  line  32,  at end add—

‘(9)
The Authority shall prepare and publish a report, no later than 1st April 2008, on

how it plans to establish and develop any necessary IT system and reduce risks of

IT problems with personal accounts.’.

Mr David Laws

Lorely Burt

Not called  68

Clause  19,  page  21,  line  32,  at end add—

‘(9)
The Authority shall prepare and publish a report, no later than 1st April 2008, on

the percentage of the target audience of personal accounts expected to accrue

returns from saving in personal account pension schemes of—

(a)
more than 100 per cent,

(b)
0-100 per cent, and

(c)
less than 0 per cent.’.

Clause Agreed to.

Public Bill Committee Proceedings: 6th February 2007
24

Pensions Bill, continued

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Withdrawn  79

Clause  20,  page  21,  line  36,  leave out ‘the Authority thinks appropriate’ and insert

‘shall be specified in regulations’.

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  80

Clause  20,  page  21,  line  38,  leave out subsection (2).

Clause Agreed to.

Clauses 21 to 23 Agreed to.

James Purnell

Agreed to  56

Clause  24,  page  23,  line  25,  leave out subsection (3) and insert—

‘(3)
The following repeals have effect at the end of the period of 2 months beginning

with the day on which this Act is passed—

(a)
the repeals in Part 2 of Schedule 7 of the provisions of the Pensions Act

1995 (c. 26) other than paragraphs 19 and 20 of Schedule 4 to that Act;

(b)
the repeal in Part 2 of Schedule 7 of paragraph 36 of Schedule 24 to the

Civil Partnership Act 2004 (c. 33);

(c)
the repeals in Part 3A of Schedule 7.’.

Clause, as amended, Agreed to.

James Purnell

Agreed to  60

Schedule  7,  page  66,  line  8,  at end insert—

‘Part 3A

Additional pension: simplified accrual rates

Citation
Extent of repeal

Social Security Contributions and
In section 39—

Benefits Act 1992 (c. 4)
(a)
the words “and Schedule 4A” wherever

occurring;

(b)
subsection (3).

In Schedule 4A, in paragraph 1(2) “39(1),”.

Child Support, Pensions and Social
Section 35(3).’.

Security Act 2000 (c. 19)

Public Bill Committee Proceedings: 6th February 2007
25

Pensions Bill, continued

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  7

Schedule  7,  page  66,  line  27,  at end insert—

‘Section 28.’.

Schedule, as amended, Agreed to.

Clauses 25 to 29 Agreed to.

NEW CLAUSES

Report by Government Actuary on trends in longevity

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Not called  NC1

To move the following Clause:—

‘(1)
Beginning in April 2014, the Government Actuary shall present a Report to

Parliament every five years setting out the latest evidence on trends in longevity.

(2)
It shall be the duty of the Secretary of State to make a motion in the House of

Commons in relation to any report under subsection (1).’.

Review of pension credit entitlement

Mr Nigel Waterson

Andrew Selous

Mr Mark Lancaster

Withdrawn  NC2

To move the following Clause:—

‘(1)
The Secretary of State may from time to time, and shall when required by

subsection (2), lay before each House of Parliament a report by the Government

Actuary or the Deputy Government Actuary on—

(a)
current rates and coverage of pension credit entitlement;

(b)
likely future rates of pension credit entitlement; and

(c)
such other matters as he considers to be relevant as affecting the present

and future take-up of and eligibility for pension credit.

(2)
The Secretary of State shall lay such reports—

(a)
five years after the coming into force of Part I of this Act, and