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"INFORMATION SENT TO MEMBERS OF OCCUPATIONAL PENSION SCHEMES
(1) Section 113 of the Pension Schemes Act 1993 (c. 48) (disclosure of information about schemes) is amended as follows.
(2) After subsection (4), insert—
"(5) The annual report of the Trustee of an occupational pension scheme which is sent to members shall contain contact details of any organisation which adequately represents the pensioner members of the scheme.""

The noble Lord said: I am sorry: I was disrupted by the Division and consequently have mislaid my Marshalled List of amendments.

Baroness Hollis of Heigham: The amendment is about whether trustees should be required to include details about appropriate pension literature.

Lord Higgins: Amendment No. 300BA is about information sent to members of occupational pension schemes. The amendment reflects the views put to us by the Occupational Pensioners Alliance. It suggests that in addition to the annual reports of the scheme being made available to all members, active and pensioners, they should also be made available to those who represent their interests. Presumably that means trade unions as well.
 
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At present, there is no definition in pension legislation of what is meant by a pensioners' association. The view is that it would, none the less, be appropriate for the annual report to be sent to such bodies so that they can be aware of the situation in any given scheme when they are advising pensioners. I beg to move.

Baroness Hollis of Heigham: The amendment seeks to amend primary legislation, but, of course, schemes already have the power to do that under Section 113 of the Pension Schemes Act 1993. We agree with the push of the amendment, but we do not need to take powers into primary legislation when that power already exists.

We do not think that copying the annual report to members is the right way to do this; we think that this information is probably more at home in the basic scheme information that schemes must provide to members and beneficiaries. That already contains details of the scheme, the OPA, the pension ombudsman and the regulatory authority. We propose to amend secondary legislation on disclosure of information to ensure that members and beneficiaries receive contact details of these organisations. We are doing what the noble Lord is proposing but through secondary legislation rather than in the Bill.

Lord Higgins: Will it be done in the basic information provided by the scheme rather than annually?

Baroness Hollis of Heigham: I do not have very strong views about this, but we felt that a better home for it was in the basic scheme information which lists all the various regimes, rights of appeal, and so on. It is an aide memoire, which we thought people were more likely to keep than annual reports. Annual reports can be used if one wishes, but my advice is the scheme information is a more comfortable home. The point is which documentation scheme members are most likely to refer to, and I suspect that it would be the basic scheme details in the original pack rather than the annual report. The form in which such information is sent out will be a matter for the scheme trustees, but we will be taking powers to ensure that that happens.

Lord Higgins: Yes, but I suppose that a member of a scheme may look at the basic information when he first joins and does not look at it thereafter. There may be some case for repeating the information in the annual report, but no doubt we will in due course see the regulations. Can the noble Baroness give us any idea about timing?

Baroness Hollis of Heigham: I wish I could. All I can say is, as I said to the noble Lord earlier, that the latest check has shown more than 100 different sets of regulations. The drafting of some—not all—is well under way. Almost all of them require quite extensive consultation with the industry. I was checking on something this morning and asked where we were but was told that we could not get a response from the industry to our draft regulations. Our dilemma is not simply the length and complexity of the regulations
 
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but the fact that, quite rightly, they need extensive consultation. I shall ensure that I give the noble Lord an update before we reach Report. I shall give him what information I can.

Lord Higgins: I am most grateful for that forthcoming reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 233 [Investment principles]:

On Question, Whether Clause 233 shall stand part of the Bill?

Lord Higgins: Clause 233 is very important and a number of points need to be made. On a point of detail, Clause 233(1) states that the trustees of a trust scheme must secure a statement of investment principles. The word "secure" seems rather odd—I should have thought that "ensure" was more appropriate, but that is obviously a drafting point.

The provision is yet again made by regulation in a number of important respects, for example in subsection (3), which states:

"Before preparing or revising a statement . . . the trustees . . . must comply with any prescribed requirements".

We do not have the remotest idea what the Government have in mind regarding that. It would be helpful to know that. Will the Minister clarify those two points?

Baroness Hollis of Heigham: I shall do my best. This clause replaces Section 35 of the Pensions Act 1995, which requires trustees of occupational pension schemes to prepare and maintain a "statement of investment principles". The change is needed to implement the provisions of Article 12 of the European Occupational Pensions Directive, which requires the statement to be reviewed at least every three years, rather than from time-to-time as the Pensions Act currently requires. That is the only change. It is almost linguistic rather than anything else. I hope that that addresses the noble Lord's point.

We do not intend to make substantial changes to the content of the statement, although we will consult on the regulations. It is just a question of how often that matter has to be addressed—it shall be every three years to comply with the Occupational Pensions Directive. This comes back to the point we were making earlier about evaluations every three years. It is part of the same structure.

Lord Higgins: I am grateful for that reply.

Clause 233 agreed to.

Clause 234 [Power to make regulations governing investment by trustees]:

On Question, Whether Clause 234 shall stand part of the Bill?

Lord Higgins: I am not sure how widely these powers operate but I am concerned about whether the regulations could implement the kind of proposal
 
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made some four or five years ago by a government Minister that pension trustees should invest in what would be regarded as socially desirable aims rather than simply investing the money to obtain the best return. Could the Minister give us some assurance on that point, which is important? Most sensible trustees replied in fairly forthright terms to the Minister that their task was to operate in the best interests of their members rather than to achieve other social objectives. I am a little worried that taking powers by regulation to govern investment by trustees might be dangerous.

Baroness Hollis of Heigham: Again, I am very happy to circulate a fuller explanation, if necessary. Again this is something of a language issue. Essentially, we are having to get the directive into our legislation with minimum change to existing practices by trustees, but we have to do so to make the legislation comply. We are simply seeking to recast in words compliant with the directive the existing responsibilities and investment decisions of trustees. We require pension funds to state their policy on socially responsible investment in the statement of investment principles, but it is not for the Government to dictate investment policy, nor, incidentally, should the European Union interfere with trustees' responsibility to that extent.

Again, this is not dissimilar to the previous issue of ensuring that the language in which we operate is now compliant with the European directive. I am assured that the measure will have no further implication for trustees in so far as they are already stating fully appropriate statements of investment principles. The regulation has to comply because the Occupational Pensions Directive does not permit member states to require investment in certain categories. I do not believe that there is anything of substance in the clause, but I am happy to write a fuller letter to the noble Lord if he wishes.

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