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Baroness Hollis of Heigham: I wish to study the Minister's reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 145YUA to 145YUC not moved.]

Clause 56 agreed to.

Clause 57 [Equal treatment rule: exceptions]:

[Amendments Nos. 145YV and 145YW not moved.]

Clause 57 agreed to.

9.15 p.m.

Clause 58 [Equal treatment rule: consequential alteration of schemes]:

The Earl of Buckinghamshire moved Amendment No. 145YWA:

Page 32, line 40, at beginning insert:
("Subject to subsection (1A) below").

The noble Earl said: I wish to move this amendment and speak to Amendments Nos. 145YWB, 148A and 148B. They deal with the equalisation of pension rights and the objective is to ensure that the company's consent is sought before trustees or managers make alterations to the scheme. Where the company refuses to give such consent to any recommendations or decisions made by the trustees or managers, then the scheme must refer the matter to OPRA to be resolved.

There are two reasons for asking for Amendment No. 145YWA to be considered by the Minister and the Committee. The first is that there is more than one way to equalise pension ages in pension schemes. Thus, some schemes are more costly than others and the employer will clearly wish to have control over costs.

The second reason is that, while the equalisation of pension ages has arisen from European Court judgments, it is nevertheless a benefit improvement over which the employing companies would wish to have control. I realise that the issue can cause difficulties between trustees, managers and the employing company. Because of that, I have suggested that OPRA should have the power to intervene in those situations. I beg to move.

Lord Mackay of Ardbrecknish: The European Court of Justice has ruled that both employers and trustees of a scheme are bound by Article 119 of the

16 Feb 1995 : Column 885

Treaty of Rome and they must both ensure that pension schemes treat men and women equally within the limits of their respective powers. Clause 58 will give trustees the power to make alterations to a scheme to comply with the equal treatment rule where they do not otherwise have these powers, a duty which will be incumbent upon employers by virtue of Section 1 of the Equal Pay Act 1970 as modified by Clause 55 of the Bill.

The effect of my noble friend's Amendments Nos. 148B, 148A, 145YWB and 142YWA would be to ensure that the trustees or managers of a pensions scheme seek the employer's consent in writing to any changes to scheme rules which they wish to make under Clause 58. In cases where the employer did not give that consent the occupational pensions regulatory authority (OPRA) would have the power to intervene.

I can certainly understand that employers might be hesitant about giving trustees the power to make changes to schemes without first consulting them. However, we have given some thought to this point and concluded that this is unlikely to happen in practice. Employers are already bound by European law to provide equal treatment and scheme rules normally require trustees to obtain the consent of the employer before a change is made. It is difficult to imagine a situation where trustees would not consult the employer and reach agreement as to how equalisation should be provided for any future service. Clause 55 of the Bill will also provide for schemes without an equal treatment rule to be treated as if they had one and for the more favourable treatment to apply.

Turning to the question of what should happen where there is a dispute between the parties, since the Barber ruling it has been clear that pension schemes must provide equal treatment. Individual scheme members can rely directly on Article 119 as interpreted by the European Court's ruling before our own courts and industrial tribunals. What is more, Clause 58 of the Bill already provides a mechanism for allowing schemes to be equalised for the future without the involvement of OPRA. We intend that OPRA should enforce statutory obligations designed to make sure that schemes are secure and appropriately funded so that they are in a position to pay the promised benefits. The equal treatment provisions do not fall into that category and other remedies are available for handling disputes between employers and trustees—for example, the pensions ombudsman and the courts.

I can understand that employers in particular might like to see an overriding requirement in the Bill that any changes to scheme rules should be expressly consented to by the employer. I am not able to accept this amendment today, but would be willing to give the matter some further consideration, though I cannot promise more than that at this stage.

The Earl of Buckinghamshire: I am grateful for the Minister's reply, which I shall read carefully and I shall return to the matter at a later stage. I beg leave to withdraw the amendment.

16 Feb 1995 : Column 886

Amendment, by leave, withdrawn.

[Amendments Nos. 145YWB and 145YX not moved.]

Clause 58 agreed to.

Clause 59 agreed to.

Clause 60 [Restriction on powers to alter schemes]:

The Earl of Buckinghamshire moved Amendment No. 145YY:

Page 34, line 2, after ("might") insert ("adversely").

The noble Earl said: This is quite a curious amendment. The clause currently states that scheme rules cannot be changed to the benefit of their members without their consent. I seek to be able to have a scheme improved without having to obtain the consent of all its members at the same time. It is entirely correct—and happens in any case in all the trustee rules—that you cannot make changes which are adverse to the accrued rights of members. But I am curious to know whether consents are needed if improvements are envisaged.

Fortunately, the only time when agreements to improvements would be required—it is an argument which perhaps tells slightly against the amendment—is if employers were selectively to start improving one section of a scheme or provision for one group of members of a scheme which would be contrary to the interests of the other members of it. That would be quite a difficult situation.

In a sense this is a probing amendment. I should like to hear what my noble friend the Minister feels about it. I beg to move.

Lord Mackay of Ardbrecknish: The purpose of Clause 60 is to prevent amendments which have a detrimental effect on members' accrued rights. The only exception to the rule is where individual members have given their consent to such an amendment.

The circumstances which determine whether an amendment could possibly have an adverse effect on any category of scheme members will usually be unique to the scheme. The interaction of different rules and entitlements can frequently mean that what appears to be a beneficial amendment can adversely affect the rights of a small minority of members. Making a decision on whether an amendment is adverse to any individual scheme member or group of members is often not straightforward. Whoever is vested with the power to make amendments—the employer or the trustee, depending on the terms of the scheme rules—will need in virtually all cases to seek the advice of an actuary.

This amendment would give whoever has the power to make modifications the authority to determine whether a modification has an adverse effect, without first being required to seek the advice of an actuary and certification from him. Given the complexities of occupational pension schemes, we do not believe that that is safe. Having listened to my explanation, and on the basis that we are both aiming in the same direction, I hope that my noble friend will be able to withdraw his amendment.

The Earl of Buckinghamshire: I am very grateful for my noble friend's reply. As I worked through the

16 Feb 1995 : Column 887

amendment I think I probably understood that he would give me that answer. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 60 agreed to.

Clause 61 [Power of trustees to modify schemes by resolution]:

Lord Lucas moved Amendment No. 146:

Page 34, line 40, after ("section") insert (" 76 or").

The noble Lord said: In moving this amendment I shall speak at the same time to Amendments Nos. 147 and 148. Perhaps I may say how pleasant it is to be able to deal with numbers only.

These amendments will clarify Clause 61. The clause enables trustees to modify schemes to comply with certain requirements of the Bill. Amendment No. 146 will enable trustees to modify their scheme to comply with such terms and conditions as may be imposed by the compensation board under Clause 76 as well as Clause 77. Amendment No. 147 adds clarity to subsection (2) (d) by making it refer to specific subsections of Clauses 33 and 69. Also, by replacing "or" with "and" at the end of line 41, it also makes clear that trustees may amend their scheme for any other purposes under subsections (2) (a) to (2) (d) as well as for any additional purposes which may be prescribed under paragraph (e). Amendment No. 148 applies the clause to Northern Ireland. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendments Nos. 147 and 148:

Page 34, line 41, leave out from ("section") to end of line and insert ("33(2), 69(2) or (3), 83 or 84, and").
Page 35, line 6, after ("(2) (d)") insert ("or any corresponding provisions in force in Northern Ireland").

The noble Lord said: I have already spoken to these amendments. With the leave of the Committee I shall move them en bloc. I beg to move.

On Question, amendments agreed to.

Clause 61, as amended, agreed to.

Clause 62 [Grounds for applying for modifications]:

[Amendments Nos. 148A and 148B not moved.]

Clause 62 agreed to.

Clauses 63 and 64 agreed to.

Clause 65 [Modification of public service pension schemes]:

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