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Lord Oakeshott of Seagrove Bay: The Minister is new to this. We all made it clear in Committee that we thought that there was not the slightest prospect of industry giving a penny and that it would be inappropriate to expect pension funds in particular to do so. Can we lay this one to rest and stop wasting time on it? There is no prospect of it. I challenge the Minister to say whether any firm commitment of help of any sort has been made. Can we not clear this one out of the way and move on?
Lord Hunt of Kings Heath: I am well aware of the noble Lord's views, but the regulations allow for contributions to be made by industry. I hope that industry will take up that opportunity. We should not close off that option in taking these regulations through.
Around 70,000 non-pension members are in the schemes that appear on the present list. This is consistent with estimates published in the FAS data report of June 2004. We envisage that up to 15,000 members within three years of their scheme pension
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age or above their scheme pension age will benefit from the FAS topping up their pensions to around 80 per cent of their core pension benefits.
Lord Skelmersdale: I am sorry to be awkward, but I assume from what the Minister said that the figures for the number of pensioners are indicative and not definitive.
Lord Hunt of Kings Heath: Indeed. When I referred to the list, I was referring to the indicative list.
The noble Lord, Lord Skelmersdale, asked whether £400 million was being paid out all at once. That was answered by the noble Lord, Lord Oakeshott: we are working on a broadly equivalent figure of £20 million a year over 20 years.
I do not want to respond further on the MG Rover issues that the noble Lord raised, but I hope that an announcement will be made by the trustees very shortly on that matter.
Lord Skelmersdale: I asked a very simple question. When was the legal date of the collapse of Rover? That is the only question at the moment to which I want an answer.
Lord Hunt of Kings Heath: As the noble Lord knows, there are a number of companies involved in the generic term "Rover", which has been one of the problems over the application of the PPF to members of the company schemes affected by the overall collapse. That is why I cannot respond to him specifically.
Lord Skelmersdale: The Minister mentioned the PPF, but we are discussing the FAS fund and whether there are Rover pensioners who should come into it.
Lord Hunt of Kings Heath: I do not think that there are. I am sorry; I thought that the noble Lord was referring to the application to the PPF, and I have had it confirmed that there are no such pensioners.
Money will not be transferred in from failed pension schemes. The funds will not be pooled, as with the Pension Protection Fund. Individual schemes will provide the annuities that they can afford in the normal way. The FAS will top up the amounts that pensioners get from those funds.
I said that the expectation and hope is that the first payments will be made in December. The noble Lord, Lord Oakeshott, presses me to say why those payments might not be made in December. All that I can say is that we hope that they will be. Although I understand the concerns of individuals who are so grievously affected by the collapse of their pension schemes, it would be worse if I gave a date when I could not know with all confidence that the payments would be made on it.
The noble Lord, Lord Skelmersdale, asked about the publication of information. To give a potentially affected individual the opportunity to make an application for a review or a representation, we will publicise through FAS materials that information concerning the notification and qualification status of schemes will be readily available on the Internet. That
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information will also include advice and guidance on reviews for that scheme, and give relevant details of any applications for reviews that have been made and are going ahead. We know that not everyone is able or wishes to use the Internet, so we will also publicise a telephone number where concerned individuals can check on the status of the schemes.
Lord Skelmersdale: Can the Minister tell us the number?
Lord Hunt of Kings Heath: I would be delighted to tell the noble Lord the number, so I shall write to him; I do not have it to hand.
I was asked about the review decisions being made by a different person from the person who made the original determination. It will be good practice for officials making decisions to be able to review them. That will enable officials to learn from their own practice and make better decisions for the future. The safeguard is that there will be a further independent appeals process, to which a dissatisfied individual will have further recourse. In that sense, we certainly think that the rights of such individuals will be protected.
The £16-million cost of the administration concerned with the fund has to be used to set up a new unit; commission, build and run a new IT system; and employ staff to assess what are complex issues surrounding hundreds of schemes in varying stages of wind-up. The expectation is that costs will reduce after the first few years, but there is a bit of a trade-off between the noble Lord's concern about the date of payment and ensuring that we have the correct and effective admin systems in place. In this incredibly sensitive area, it is important that we get the administration right. The cost is justified.
On Question, Motion agreed to.
Moved, That the Grand Committee do report to the House that it has considered the Financial Assistance Scheme (Internal Review) Regulations 2005.(Lord Hunt of Kings Heath.)
On Question, Motion agreed to.
Lord Evans of Temple Guiting: rose to move, That the Grand Committee do report to the House that it has considered the Civil Partnership (Contracted-out Occupational and Appropriate Personal Pension Schemes) (Surviving Civil Partners) Order 2005.
The noble Lord said: In moving the Civil Partnership (Contracted-out Occupational and Appropriate Personal Pension Schemes) (Surviving Civil Partners) Order 2005, I shall also speak to the Civil Partnership (Pensions and
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Benefit Payments) (Consequential, etc. Provisions) Order 2005. These orders were laid before the House on 15 June and 29 June respectively. before I proceed further, I wish to state that these statutory instruments are compatible with the European Convention on Human Rights.
Noble Lords will recall that the Civil Partnership Act, which we debated at great length last year, provides for same-sex couples to gain legal recognition of their relationship by forming a civil partnership. The Act made a number of substantial amendments to primary legislation and we explained in detail how we would use the powers in the Act that would enable additional consequential provisions to be made. These orders invoke those powers and make amendments to primary and secondary legislation in matters relating to pensions and benefits. The changes are detailed, but are essentially technical.
I turn first to the Civil Partnership (Contracted-out Occupational and Appropriate Personal Pension Schemes) (Surviving Civil Partners) Order 2005. This order amends the legislation relating to the requirement that occupational and personal pension schemes must comply with in order to contract out of the state second pension scheme. The amendments ensure that schemes make provision for benefits for surviving civil partners.
Noble Lords will recall that when we debated at length the subject of when scheme members would accrue rights to survivor benefits for a civil partner the original intention was for rights to accrue from the implementation date of the civil partnership. However, to meet the Government's objective of according to civil partners as many as possible of the rights and responsibilities afforded to married couples, on 12 October 2004, the Government announced that public service schemes would provide survivor benefits for civil partners based on members' rights accrued from service since 6 April 1988. Following on from that, the Government announced on 26 October 2004 that schemes that contract out would be required to provide survivor benefits based on members' contracted out rights accrued since 6 April 1988. This approach is in line with the provision for widows.
This order also provides an element of transitional protection for some widows and widowers. This transitional protection provides that if a widow or widower of a scheme member who died before the implementation date subsequently forms a civil partnership, or lives with a member of the same sex as if they were civil partners, their survivor benefits will not be reduced or stopped. This is to avoid the potential loss of survivor benefits in circumstances that could not have been foreseen when those benefits came into payment.
I now turn to the Civil Partnership (Pensions and Benefit Payments) (Consequential, etc. Provisions) Order 2005. Again, the amendments in this order are mainly technical in nature and follow the main policy of the Act. The amendments afford the same treatment to civil partners in respect of pensions and benefits as is currently provided for spouses. Where existing provisions treat widows and widowers differently, civil
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partners are treated in the same way as widowers. The order puts civil partners and bereaved civil partners on an equal footing with spouses and bereaved spouses in relation to state retirement pensions. To ensure that direct discrimination is avoided, male and female civil partners will have those rights that are currently available to husbands and widowers from the implementation date, and remaining rights in 2010, when they become available to married men and widowers.
In summary, although these orders appear complex, they do no more than ensure that civil partners are afforded the same treatment as married couples in matters of pensions and state benefits. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Civil Partnership (Contracted-out Occupational and Appropriate Personal Pension Schemes) (Surviving Civil Partners) Order 2005.(Lord Evans of Temple Guiting.)
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