Public Service Pensions Bill

Opening Statement by The Rt Hon Lord Hutton of Furness (PSP 08)

Public Service Pensions Bill 2012

1. In my Final Report on the future of public service pensions published in March 2011, I called for new legislation to govern the provision of public service pensions. I came to the very strong view that the present legal framework needed a complete overhaul as the present arrangements are unnecessarily complex and inconsistent and fail to support the principles of sustainability and good governance that I consider essential going forward.

2. To this extent I welcome the publication of this Bill. It is a necessary and welcome reform which should lay the proper foundations for the reforms I proposed in my Final Report.

3. The Bill covers the main areas set out in my Final Report. My principal concerns were to put the design of the new schemes on to a proper footing, establish effective accountability and responsibility for individual schemes, establish a framework for better governance arrangements, clarify and make more consistent the powers of amendment and consultation, improve scheme member engagement and establish a proper understanding of accrued rights as they apply to the main public service schemes. To a large extent, the Bill has achieved these objectives and is therefore an important step in the right direction.

4. The Bill is itself a very technical piece of legislation. Its detailed provisions will require careful scrutiny. My main concerns at present are centred on the provisions dealing with scheme closures and how this might affect the Local Government Pension Scheme and the proper protection of accrued rights. There is still no definition of these in the Bill. I also feel there is a strong case to improve the specific provisions in the Bill dealing with the membership of the new pension boards so that employee representatives sit as of right, on all of these new bodies.

November 2012

Prepared 7th November 2012