Automatic enrolment schemes
Andrew Selous: I beg to move amendment No. 3, in clause 15, page 7, line 22, leave out or to provide any information.
We are going so fast that maybe the Committee will not have to listen to me for as long as it thought it would have to at the start of the proceedings.
The purpose of the amendment is to check that the wording in subsection (2)(b) would not prevent an employer or a personal account scheme from finding out from an employee their date of birth and national insurance number and any other relevant information that they might need to put them into the scheme. As subsection (2)(b) is worded, it would seem that the employee, bizarrely perhaps, might be able to refuse to give such information. I am sure that I am probably wrong and that the Minister will leap to show me some other part of the Bill where it states that employees can be required to give basic information about who they are, their date of birth and so on. If they could refuse to give that information it would obviously cause complications and I therefore seek the Ministers reassurance.
Mr. O'Brien: An employer would be able to obtain from an employee by reason of employment the sort of information that the hon. Gentleman described. The basic information about who the person is, where they live, and what their national insurance number and date of birth are is the sort of basic information that in any event ought to be in the possession of most employers. They would get that information and they would have that information.
What we seek to do, however, is to prevent a situation arising where the employer would be able to say, Before I can automatically enrol you and get you involved in my pension scheme, you have got to give me a vast array of very detailed information about your background. Some employees might not wish to give that information and it might be utterly irrelevant to the particular scheme. It is possible that some schemes might be created to help employers who do not wish to operate in a bona fide way with automatic enrolment.
Almost all employers would approach this in a straightforward and bona fide way. However, if there were any suggestion that employers required from an employee information that they already had, or would normally have for the purposes of employment, merely for the purposes of joining a pension scheme, we would want to ensure that they would not be able to require that additional information. I hope that with that reassurance, and the reassurance that the employer would be able to ask reasonable questions in a normal way but not be able to use requests for information to frustrate pension membership, the hon. Gentleman will feel able withdraw his amendment.
Andrew Selous: Yes, I am certainly reassured by what I have heard from the Minister about what an employer is able to find out from an employee under normal
Amendment, by leave, withdrawn.
Clause 15 ordered to stand part of the Bill.
Occupational pension schemes
Andrew Selous: I beg to move amendment No. 4, in clause 16, page 7, line 33, leave out paragraph (c).
The Chairman: With this it will be convenient to discuss amendment No. 5, in clause 17, page 7, line 40, at end add
(c) is prescribed or is of a prescribed description and that has its main administration elsewhere than in an EEA State.
Andrew Selous: The purpose of the amendments is to seek clarification from the Minister about the differences between personal pension schemes and occupational pension schemes in the three different jurisdictions mentioned here, namely, the United Kingdom, the European Economic Area and outside the European Economic Area.
There is obviously a difference in categorisation between occupational and personal pension schemes. For example, what happens about personal pension schemes that are outside the European Economic Area is not clear. I am sure that international pension law is probably even more complicated than United Kingdom pension law but, given that we are bringing in such a significant Bill, it is important to be clear about what happens in the different jurisdictions, not least because more and more people are working internationally. There is a big increase of workers migrating to and from different countries. I would be grateful for any further elucidation that the Minister could give about the two amendments.
Mr. O'Brien: I am grateful to the hon. Gentleman for the constructive way in which he has put the questions. He is right that more people than ever before are working internationally, travelling abroad and coming to work in this country. Both clauses 16 and 17 set out the definition of occupational and personal pension schemes. He has noted the difference between these two clauses, namely, that we take a power to specify occupational schemes based outside the EEA, but he will not that we do not do the same for personal pensions. We believe that there are sound reasons for the distinction, which I will now explain.
A key requirement of all qualifying schemes, occupational and personal, is that they must be appropriately regulated. Occupational pension schemes based in the UK are regulated through domestic law, which implements the European directive on the activities and supervision of institutions for occupational retirement provisionIORP. Schemes
So, we will have to consider the circumstances where people sign up to a foreign-based schemeperhaps a scheme based in the United States or elsewhere, for a worker who has come over here or a worker working for an American company. We will look at those on a more individualised basis to ensure that any scheme that is used as a pension scheme is able to be used for the purposes of the employer duty and is therefore appropriately regulated.
Andrew Selous: Just to put a specific example to the Minister, if an American came to this country with a 401(k) schemea personal pension scheme in the United Statesthat was a good scheme with a high level of contribution, what would be the effect if he were then working for a UK employer?
Mr. O'Brien: I do not want to give carte blanche to all 401(k) schemes. We would look at the particular scheme to identify whether it would comply with the nature of our pension schemes. I know a bit about those schemes, and I would have thought that, in most cases, they probably would. Let me not give a ministerial imprimatur to all those schemes. I will just say, in broader terms, that that is the sort of scheme we want to be able to allow. Assuming it is properly regulated by US domestic authorities, it would probablyI use that word advisedlycomply with the requirements, particularly if the employee coming here from the US was satisfied that that was the sort of scheme he wished to use and maintain, and was returning there. That would probably be fine.
I would advise a little caution, however, if a UK-based company decided that it was going to use foreign-based pension products for their domestic employees. We would want to look at that with some care, and ensure that the specific pension scheme fully complied. I suspect that operators of 401(k) schemes would not allow themselves to be put in that position. It may well be that in other countries there are schemes, probably privately run, which would be in the market for taking on pension provision here. If they were in the EEA, we would know how they are regulated. If they were outside the EEA, we would want to be able to say that certain schemes are appropriate and others are not. We are proceeding on that basis. The amendment would interfere with that. However, given the way the hon. Gentleman put his point across, I do not think I need to spend time in rebuttal: I needed only to explain the purpose of the way in which we are addressing the various schemes.
Andrew Selous: I think these exchanges are proving of use to the many people who will look at them in Hansard tomorrow and in the weeks to come. We are in
Amendment, by leave, withdrawn.
Clause 16 ordered to stand part of the Bill.
Clause 17 ordered to stand part of the Bill.
Further consideration adjourned.[Mr. David]
Adjourned accordingly at half-past Two oclock till Tuesday 29 January at half-past Ten oclock.
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