Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Mackay of Ardbrecknish: In introducing the amendment, the noble Baroness appeared to imply that there is a hidden agenda as regards Clause 14, which is certainly not the case. We have been frank and open about the term "member" in Clause 14. There is no mystery. I shall try to explain in some detail exactly our intentions in this regard.

Clause 14(1) offers the potential to all members to select trustees. Subsection (3) gives existing trustees the freedom to develop appropriate rules for selecting member-nominated trustees. Those rules will, no doubt, be tailored to the particular circumstances of their scheme. It is those rules, rather than the clause, which will determine those members who will be eligible to select trustees. However, the rules will be subject to the approval of active and pensioner members as well as deferred members if trustees so wish.

There is also the power in subsection (3) to prescribe rules in regulations. We intend that prescribed rules will provide a procedure which is simple and easy to implement and will secure the basic policy intention that, where members wish it, there should be at least one-third member-nominated trustees.

The arrangements that we intend to adopt are those recommended by the Pension Law Review Committee as the most convenient and cost effective for schemes. They will require schemes to invite at least all active members to nominate persons for selection as trustees. We feel that it would be wrong to impose a requirement to involve members other than active members because that could impose significant cost and additional complexity on some schemes. We hope that it will be a measure of last resort.

The rules will lack the flexibility of rules developed by scheme trustees. We hope that that will encourage the majority of schemes to devise their own procedures for selecting member-nominated trustees. Prescribed rules, however, will be an integral part of the

20 Feb 1995 : Column 959

member-nominated trustee requirements. Their purpose is twofold: first, as a fallback option for those schemes whose members and trustees cannot agree on an appropriate formula to select member-nominated trustees; and, secondly, we have no desire to allow schemes to avoid those requirements by delay or procrastination. Once the legislation comes into effect, we intend member-nominated trustees to be in place within a prescribed time-scale. As I indicated during the previous debate, we are looking at the possibility of that being a period of six months.

If trustees fail to take reasonable steps to introduce member-nominated trustees they may be sanctioned and removed by the authority. The authority may find itself in a position where it has to sanction trustees unless they introduce member-nominated trustees. In such a case, a readily available procedure which can be followed is required.

Finally, the term "member" in subsections (9) and (10), as defined in Clause 112, means any member, whether active, pensioner or deferred. We intend that any member may be nominated and selected as a member-nominated trustee and that there will be no restrictions on that. It is a matter for scheme members to decide who is best suited to carry out the duties of that position.

I hope that I have made our intentions crystal clear and that the noble Baroness will appreciate that her suspicions are unfounded and her amendment unnecessary. I see no reason to single out Clause 14 as the one in which the word "member" should not be extended or restricted. With that explanation of what we intend in that respect, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Dean of Thornton-le-Fylde: I thank the Minister for his extremely detailed and helpful explanation as regards understanding the Government's intention on Clause 113. I should stress that I did not intend to imply that there was a hidden agenda. That is certainly not the view with which I approached the matter. I was trying to encourage the Minister to put on the record the reason for the provision. If, in fact, the Minister read into my comments that I was so implying, I withdraw those remarks. I do not have a problem in that respect. I certainly did not intend to imply that. I repeat, the Minister may have chosen to interpret my contribution in that way, but it was not my intention that he should do so.

However, the amendment has made the Minister give us assurances regarding circumstances in which the change through regulation of the definition of the word "member" will apply. I was heartened by the Minister's assurance that the change of definition of "member" will be to make the legislation work to ensure that the provisions of member-nominated trustees and the requirements under the Bill are put into effect. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 113 agreed to.

[Amendment No. 182A not moved.]

20 Feb 1995 : Column 960

Baroness Hollis of Heigham moved Amendment No. 182B:

After Clause 113, insert the following new clause:

Entitlement to share in occupational pension

(".—(1) If a resident of residential accommodation (other than a temporary resident) being a member of an occupational pension scheme, has a spouse (referred to in this section as "the remaining spouse") living other than in residential accommodation, the remaining spouse shall be entitled on application to the trustees of the scheme to receive one-half of the gross occupational pension which the resident would, apart from this section, be entitled to receive.
(2) Any payment made to the remaining spouse under subsection (1) of this section shall not be treated as the resident's income but shall be treated as the remaining spouse's income for all purposes.
(3) In this section—
"residential accommodation" means either accommodation provided under Part III of the National Assistance Act 1948 or accommodation in a nursing home or residential care home as defined in Regulation 19 of the Income Support (General) Regulations 1987 if such accommodation is not provided under Part III of the National Assistance Act 1948;
"resident" means a person provided with residential accommodation;
"temporary resident" has the same meaning as in the National Assistance (Assessment of Resources) Regulations 1992; and
"gross occupational pension" means the amount of occupational pension to which the resident is entitled before deducting any income tax which would, apart from this section, be payable on that pension.").

The noble Baroness said: When Amendment No. 182A was called it occurred to me that Members of the Committee would have liked another hour-and-a-half of discussion on divorce, but I noticed that the Minister was looking, I hoped, still appropriately bruised, battered and, therefore, not willing to pursue the matter.

However, Amendment No. 182B raises the issue of residential care and also exactly the same issue that we dealt with as regards divorce. As we know, having spent a considerable time on the matter, occupational pensions at present cannot be divided or assigned. As we saw, that is a major issue when it comes to the division of assets on divorce. But the fact that occupational pensions cannot be divided or assigned raises even more poignant questions when an elderly couple are divided not by divorce but by long-term illness.

For example, the husband—and it is usually the husband with a substantial occupational pension—may have developed a long-term illness such as Alzheimer's disease. He may have been nursed tenderly at home by his wife until she could no longer cope. The wife is, perhaps, in her 70s or 80s. The husband goes into a nursing home or into residential care and, because his occupational pension cannot be divided or assigned, he takes with him his entire occupational pension towards the fees. His wife, elderly and with no occupational pension of her own—indeed, three-quarters of elderly women do not have such pensions—can be left with nothing other than the state dependent pension; namely, about £35 a week, topped up by income support from which she has to find, perhaps, the additional cost of visiting her husband, telephoning him, buying him treats and keeping their home repaired.

20 Feb 1995 : Column 961

The husband and wife may have been sharing an occupational and state pension entitlement of £350 a week. Had the husband died, the wife would have received half of that amount as his widow. As, instead, she has lost him to Alzheimer's, the wife receives nothing but very inadequate state benefits. If the couple have modest savings, the wife will not even receive that amount until their savings have been eaten away to below £8,000 a year.

Local authorities can take such circumstances into account if the wife pleads poverty and contributes to his fees. As local authorities are in dire straits at present, they are very reluctant to make a discretionary contribution when, at the same time, they are having to cut statutory services. Where the husband's fees are met by the DSS in part or in whole because his occupational pension does not fully cover them, the DSS has no discretion whatever; indeed, his entire occupational pension must be taken because it cannot be divided. Therefore, the wife is left devastated twice over: first, by the loss of a husband to a dreadful illness; and, secondly, by her own financial insecurity which has arisen as a result of the loss of his occupational pension.

It should not be like that. If the amendment were accepted, it would not be. The amendment proposes that, in such circumstances, the trustees would be able to assign half of the occupational pension to the wife exactly in the way as it would come to her were she to be widowed. How many people are we talking about? According to Age Concern, about 10,000 men and 5,000 women who have occupational pensions are married and are living in residential care. Those are not very large numbers; but, for those involved, it is a problem of great poignancy. It is true that the DSS and local authorities may contribute more, as a result of the amendment, towards the cost of the husband's upkeep, but some of that would be offset by savings on income support to the wife who is left at home.

Perhaps I may conclude by quoting the case of Mrs. F. which has been given to me by the Alzheimer's Disease Society. Mrs. F. is 77 and her husband is 80. He has had Alzheimer's disease for the past 10 years and has recently had to go into a nursing home because of the effect on his wife's health. He served in the Army during the Second World War and has worked all his life. The whole of his occupational pension is being used to pay the cost of his care. At present, Mrs. F. is living on £66 per week, including income support. She writes,

    "I feel this is wrong as the pension was meant for both of us. Is there anything that I can do as I cannot live on £66 a week? This is worrying me very much".

No, there is nothing she can do. But there is something we can do. We can press the Government to accept this amendment tonight. I beg to move.

6 p.m.

Baroness Seear: I shall be brief because the noble Baroness has made the case plainly. I am certain that no one ever intended this situation to arise. It was not foreseen. It is obviously extremely hard on the person who remains at home when the partner who cannot remain at home any longer has to go into residential

20 Feb 1995 : Column 962

accommodation of some kind. This is yet again a problem arising from what we discussed at such length in connection with divorced women—the ability to assign part of a pension to someone other than the person who receives the pension in the first place. I hope that the Minister, who, I know, will recognise the seriousness of this problem, can find a way, either by accepting this amendment or by producing an amendment of his own, to ensure that such spouses are not left in the penurious situation in which so many of them now find themselves.

Next Section Back to Table of Contents Lords Hansard Home Page