Child Support, Pensions and Social Security Bill — War widows' pensions--entitlement — 3 Apr 2000

I beg to move amendment No. 12, in page 26, line 33, at end insert--

'and, for the purposes of calculating the pensioner's earnings factor under this subsection, in addition to any earnings, the pensioner will be credited with earnings equal to the lower earnings limit then in force in respect of each week in which invalid care allowance was payable or would have been payable but for the fact that under regulations the amount payable to him was reduced to nil because of his receipt of other benefits.'.

Amendment, by leave, withdrawn.

Amendments made: No. 28, in page 30, line 3, leave out--

', under section 48A of that Act,'.

No. 29, in page 30, line 5, at end insert--

', in accordance with section 48A below and Schedule 4A to the Social Security Contributions and Benefits Act 1992,"'.-- [Mr. Rooker.]

Amendments made: No. 30, in page 31, line 25, leave out "Pension Schemes Act 1993" and insert "1993 Act".

No. 31, in page 31, line 26, leave out--

'Social Security Contributions and Benefits Act 1992'

and insert "1992 Act".

No. 32, in page 31, line 30, leave out subsection (2) and insert--

'(2) Subsection (1) shall have effect--

(a) in relation to the application of section 44(5A) of the 1992 Act by virtue of sections 39C(1) and 48BB(5) of that Act;

(b) in relation to the application of section 44(5A) of the 1992 Act in the circumstances described in section 128(4) to (6) of the 1995 Act.

(3) In relation to the period--

(a) beginning with 6th April 2000, and

(b) ending with the day before the first regulations under section 48A(5) of the 1993 Act (as amended by subsection (1) above) come into force,

the Secretary of State shall be taken to have, and to have had, power to calculate and pay relevant pensions by reference to section 44(5) of the 1992 Act as modified by regulations under section 48A(5) of the 1993 Act.

(4) For the purposes of applying subsection (3) above--

(a) the substitution made by section 128(1) of the 1995 Act shall be ignored, and

(b) references in enactments to section 44(5A) of the 1992 Act shall (so far as necessary) be treated as references to section 44(5).

(5) The first regulations under section 48A(5) of the 1993 Act (as amended by subsection (1) above) may include provision in relation to--

(a) revising the calculation of a relevant pension;

(b) paying a relevant pension in accordance with a revised calculation.

(6) Relevant pensions are pensions which fall to be calculated--

(a) in the circumstances described in section 128(4) to (6) of the 1995 Act, and

(b) in relation to persons where, by virtue of section 48A(1) of the 1993 Act, section 44(6) of the 1992 Act has effect in any tax year as mentioned in section 48A(1) of the 1993 Act in relation to some but not all of a person's earnings.

(7) For the purposes of this section--

(a) the 1992 Act is the Social Security Contributions and Benefits Act 1992;

(b) the 1993 Act is the Pension Schemes Act 1993;

(c) the 1995 Act is the Pensions Act 1995.'.-- [Mr. Rooker.]

(3) In this section 'the relevant date' means the date appointed for the coming into force of section (Restriction on index-linking where annuity tied to investments) of the Child Support, Pensions and Social Security Act 2000." '.-- [Mr. Rooker.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

New clause 25 provides members of money purchase occupational pension schemes with a choice. They will be able to use the non-protected rights element of their accumulated pension fund, in respect of rights accrued from April 1997, to buy instead either an investment- based annuity or an index-linked annuity. Occupational pensions must be increased annually as follows: rights that accrue from 5 April 1988 in respect of guaranteed minimum pension and protected rights must be indexed by the retail prices index, capped at 3 per cent.; and all rights accrued in salary-related and money purchase schemes from 6 April 1997 must be indexed by the RPI, capped at 5 per cent. Protected rights in appropriate personal pensions are subject to the same level of indexation.

We consulted the pensions industry, employers and the public on whether it would be right to relax the current rules for money purchase pension schemes in order to allow schemes to offer investment-linked annuities to any member who might wish to choose that option as an alternative to a traditional index-linked annuity. Of course, the advantage of an investment-linked annuity is that it enables the annuitant to benefit from growth in a range of underlying investments after retirement, although that goes hand in hand with a risk of possible falls in pension income if investment performance is poor.

The principle of introducing greater flexibility for occupational scheme members was widely welcomed. Indeed, a number of annuity providers pointed out that investment-linked annuities have delivered better results in recent years than the traditional index-linked annuity. The new flexibility will apply equally to members of money purchase schemes, whether they buy an annuity or are provided with a pension by their scheme.

Protected rights are not covered by the new clause. As I said when I announced the results of the consultation exercise on 22 March, we intend to give further detailed consideration to issues that arise for protected rights before we decide whether to make any changes to the indexation rules that apply to them. We shall also give careful consideration to the comments that many respondents made on the wider question of the application of indexation requirements to occupational money purchase schemes.

I emphasise that the proposed change provides a genuine option for members of money purchase schemes. The alternative of buying a traditional index-linked annuity will remain available for those members who prefer the certainty of a specified annual rate of increase each year.

The new clause is quite narrow. I hope that it has the support of the House.

Mrs. Lait:

We certainly welcome this relaxation of the annuity rules for people who have to retire with a compulsory annuity, but it is worth pointing out that it

Question put and agreed to.

Clause read a Second time, and added to the Bill.

(2) In subsection (1), after paragraph (b) there shall be inserted--

"(ba) a complaint made to him by or on behalf of an independent trustee of a trust scheme who, in connection with any act or omission which is an act or omission either--

(i) of trustees of the scheme who are not independent trustees, or

(ii) of former trustees of the scheme who were not independent trustees,

alleges maladministration of the scheme,".

(3) In that subsection, for the words after sub-paragraph (ii) of paragraph (d) there shall be substituted--

"and in a case falling within sub-paragraph (ii) references in this Part to the scheme to which the reference relates are references to each of the schemes,

(e) any dispute not falling within paragraph (f) between different trustees of the same occupational pension scheme,

(f) any dispute, in relation to a time while section 22 of the Pensions Act 1995 (schemes subject to insolvency procedures) applies in relation to an occupational pension scheme, between an independent trustee of the scheme and either--

(i) trustees of the scheme who are not independent trustees, or

(ii) former trustees of the scheme who were not independent trustees, and

(g) any question relating, in the case of an occupational pension scheme with a sole trustee, to the carrying out of the functions of that trustee."

(4) After that subsection there shall be inserted--

"(1A) The Pensions Ombudsman shall not investigate or determine any dispute or question falling within subsection (1)(c) to (g) unless it is referred to him--

(a) in the case of a dispute falling within subsection (1)(c), by or on behalf of the actual or potential beneficiary who is a party to the dispute,

(b) in the case of a dispute falling within subsection (1)(d), by or on behalf of any of the parties to the dispute,

(c) in the case of a dispute falling within subsection (1)(e), by or on behalf of at least half the trustees of the scheme,

(d) in the case of a dispute falling within subsection (1)(f), by or on behalf of the independent trustee who is a party to the dispute,

(e) in the case of a question falling within subsection (1)(g), by or on behalf of the sole trustee.

(1B) For the purposes of this Part, any reference to or determination by the Pensions Ombudsman of a question falling within subsection (1)(g) shall be taken to be the reference or determination of a dispute."

(5) In subsection (3) (persons responsible for the management of the scheme to be the trustees and managers and employer), after "occupational pension scheme" there shall be inserted "or a personal pension scheme".

(6) For paragraph (a) of subsection (6) (exclusion of the Ombudsman's jurisdiction where court proceedings have been begun) there shall be substituted--

"(a) if, before the making of the complaint or the reference of the dispute--

(i) proceedings in respect of the matters which would be the subject of the investigation have been begun in any court or employment tribunal, and

(ii) those proceedings are proceedings which have not been discontinued or which have been discontinued on the basis of a settlement or compromise binding all the persons by or on whose behalf the complaint or reference is made;".

(7) In subsection (7) (persons who are actual or potential beneficiaries)--

(a) after paragraph (b) there shall be inserted--

"(ba) a person who is entitled to a pension credit as against the trustees or managers of the scheme;" and

(b) in sub-paragraph (i) of paragraph (c), for "paragraph (a) or (b)" there shall be substituted "paragraph (a), (b) or (ba)".

(8) In subsection (8) (interpretation) after the definition of "employer" there shall be inserted--

"'independent trustee', in relation to a scheme, means--

(a) a trustee of the scheme appointed under section 23(1)(b) of the Pensions Act 1995 (appointment of independent trustee by insolvency practitioner or official receiver),

(b) a person appointed under section 7(1) of that Act to replace a trustee falling within paragraph (a) or this paragraph;".

(9) In subsection (1)--

(a) for "complaints and disputes" there shall be substituted "matters";

(b) in paragraph (b), for the words from "is to" to the end of the paragraph there shall be substituted "are references to the other scheme referred to in that sub-paragraph"; and

(c) in paragraphs (c) and (d), the words "which arises", in each place where they occur, shall be omitted.

(10) Subsection (6) does not have effect in relation to proceedings begun before the day appointed under section 79 for the coming into force of this section.'.-- [Mr. Rooker.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker:

With this it will be convenient to discuss the following: New clause 22-- Transfer to Financial Services Ombudsman of functions of Pensions Ombudsman and OPRA --

Question put and agreed to.

Clause read a Second time, and added to the Bill.

(2) Those provisions are--

(a) that the investments are held in the custodian's name and he maintains adequate records for identifying them as belonging to the scheme and not to himself or any other person,

(b) that the custodian is required to safeguard the investments,

(c) that all documents of title relating to the investments are kept in the custodian's possession and may not be delivered to any other person except--

(i) to another appropriate authorised person with whom the trustee or managers have made an agreement within this section or in accordance with instructions from the scheme's fund manager, and

(ii) upon a request which is signified in the manner specified in the agreement,

(d) that all arrangements and transactions relating to the investments are conducted and recorded in the manner and within the period so specified,

(e) that adequate arrangements are made for the deposit or investment of money received by the custodian in pursuance of the agreement and for the payment by him of money required for the purposes of the scheme,

(f) that the custodian is responsible for securing that the trustees and managers are fully informed of all matters relating to the investments within a period which is reasonable having regard to the importance of the information,

(g) that, in any case where the custodian is also a person to whom any discretion to make any decision about investments has been delegated under section 38, the functions exercisable by him as custodian are adequately differentiated from those exercisable by him by virtue of that delegation,

(h) that the custodian is liable for any reduction in value in the assets of the scheme arising from any breach of his obligations under the agreement, and

(i) such other provisions as the trustees or managers consider appropriate for securing the safeguarding of the investments of the scheme.

(3) Where an agreement in relation to the investment held for the purposes of a scheme has been made with a custodian in accordance with this section--

(a) except in prescribed circumstances, the custodian shall not be regarded as a trustee or manager of the scheme by virtue only of complying with such provisions of the agreement as are mentioned in subsection (2), and

(b) the trustees or managers of the scheme are not responsible for any act or default of the custodian in the course of exercising his functions as such if they have taken all reasonable steps to satisfy themselves--

(i) that he is an appropriate person to appoint as custodian, and

(ii) that he performs his functions under the agreement competently.

(4) Subject to any restriction imposed by the scheme, an agreement under this section may include provision enabling the custodian to make arrangements with another person for him to exercise any of the custodian's functions under the agreement; and where the custodian makes such arrangements this section shall, except in prescribed circumstances, apply in relation to the other person as it applies to the custodian.

(5) Regulations may--

(a) provide that this section does not apply, or

(b) modify it in its application,

to schemes or investments falling within a prescribed class or description.'.-- [Mr. Butterfill.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

3 Apr 2000 : Column 756

Motion and clause, by leave, withdrawn.

I beg to move amendment No. 70, in page 35, line 25, at end insert--

'(za) The word "and" shall be omitted and after paragraph (a) there shall be inserted--

"( ) that in the case of schemes which fall in a prescribed class, that such arrangements for the selection of persons nominated by pensioner members and deferred members of the scheme to be trustees of the scheme as are required by this section are made, and".'.

Amendment, by leave, withdrawn.

(i) a report on the armed forces pension scheme has been laid before Parliament by the Secretary of State for Defence; and

(ii) the results of any public consultation upon a report as cited in subsection (i) above have been published;

and a report of any review carried out under this section shall be laid before Parliament.

(2) Subject to subsection (3), a widow in receipt of a widow's pension under any of the enactments mentioned in subsection (4) ("the DSS pension") and in receipt of a pension paid under the Armed Forces Pension Scheme shall on remarriage or when living together as husband and wife with a member of the opposite sex only retain the Forces Family Pension (attributable).

(3) Subsection (2) does not apply to a widow in receipt of a basic pension under section 44 of the Social Security Contributions and Benefits Act 1992; and a widow in receipt of such a pension who has remarried or is living together as husband and wife with a member of the opposite sex may not retain the Forces Family Pension (attributable).

(4) The enactments referred to in subsection (2) are--

(a) the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983, and any order re-enacting the provisions of that order,

(b) the Personal Injuries (Civilians) Scheme 1983, and any subsequent scheme made under the Personal Injuries (Emergency Provisions) Act 1939,

(c) any scheme made under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939, or the Polish Resettlement Act 1947 applying the provisions of any such order as is referred to in paragraph (a),

(d) the order made under section 1(5) of the Ulster Defence Regiment Act 1969 concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment.'.-- [Mr. Willetts.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

War widows have a long-standing grievance. When they remarry, they lose their armed forces family pension. We propose, as we have before, that approximately 2,500 post-1973 widows of men killed in the line of duty should retain their right to that pension even if they remarry.

This cause was particularly close to the heart of Michael Colvin, the late hon. Member for Romsey. He contributed an enormous amount to this subject, drawing on his own expertise in the armed forces. It has also been pursued vigorously by Baroness Strange in the other place. Indeed, the Minister of State has previously made encouraging sounds about it, and has made it clear that his heart was with us on this reform. In Standing Committee, he may been over-excited when he said:

I may be putting myself in the hot seat by saying this, but if I were a Back Bencher, I would go for it. As a Minister, I shall, of course, explain why we should not proceed down that road.--[ Official Report, Standing Committee F , Tuesday 7 March 2000; c. 751.]

Question put, That the clause be read a Second time:--

The House divided: Ayes 141, Noes 265.

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