Pension Schemes Bill — New Clause 4 — Employer Debt: Trustees’ Discretion — 16 Nov 2020 at 21:03

The majority of MPs voted not to allow pension scheme trustees to decide not to pursue money owed by an employer leaving the scheme where the employer operated as an unincorporated business, the debt is less than 0.5% of the scheme's liabilities, the costs of recovery would be disproportionate and recovery would be of no material benefit to the scheme.

MPs were considering the Pension Schemes Bill[1]

The proposed new clause rejected in this vote stated:

  • (1) The following changes are made to the Occupational Pension Schemes (Employer Debt) Regulations 2005 (SI 2005/678).
  • (2) In regulation 2, in the definition of “scheme apportionment arrangement”—
  • (a) in sub-paragraph (f)(ii), after “apply”, insert “but not if the circumstances in paragraph (h) apply”;
  • (b) at end insert—
  • “(h) the consent of the remaining employer or employers shall not be required under (f)(ii) above where all of the following conditions apply—
  • (i) the departing employer’s debt was treated as becoming due prior to the coming into force of this provision; and
  • (ii) the departing employer’s debt was less than 0.5% of the scheme’s overall liabilities, as estimated by the trustees or managers on advice of the scheme actuary, as if the whole scheme had been winding-up at the time the debt was treated as becoming due; and
  • (iii) the employer in question was operating as an unincorporated business during his participation in the scheme; and
  • (iv) the trustees or managers consider that, in the context of the scheme overall, taking into account factors such as the scheme’s assets, liabilities and the trustees’ or managers’ most recent assessment of the overall employer covenant, there would be no material benefit to the scheme and its members in seeking recovery of the employer’s liability share from the departing employer.”
  • (3) In regulation 9, after paragraph (14B), insert the following new paragraph—
  • “(14C) Condition L is that a debt was treated as becoming due from him under section 75 of the 1995 Act but is excluded under this Condition because—
  • (a) the employer’s debt was treated as becoming due prior to this Condition coming into force; and
  • (b) the employer’s debt was less than 0.5% of the scheme’s overall liabilities, as estimated by the trustees or managers on advice of the scheme actuary, as if the whole scheme had been winding-up at the time the debt was treated as becoming due; and
  • (c) the employer in question was operating as an unincorporated business during his participation in the scheme; and
  • (d) at or before the applicable time, the trustees or managers have made a determination not to pursue the debt on the grounds that, in the context of the scheme overall, taking into account factors such as the scheme’s assets, liabilities and the trustees’ or managers’ most recent assessment of the overall employer covenant, seeking recovery represented a disproportionate cost to the scheme and would be of no material benefit to the scheme overall.

The rejected new clause was accompanied by the following explanatory statement from its proposer:

  • This new clause would enable pension scheme trustees to exercise discretion not to pursue employer debt following an employer’s exit from a pension scheme where such debt is below a de minimis threshold. This aims to support unincorporated employers who are now retired for business and for whom the current regulation allows no easements.

The motion rejected by the majority of MPs in this vote was:

  • That the clause be added to the Bill.

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Debate in Parliament |

Party Summary

Votes by party, red entries are votes against the majority for that party.

What is Tell? '+1 tell' means that in addition one member of that party was a teller for that division lobby.

What are Boths? An MP can vote both aye and no in the same division. The boths page explains this.

What is Turnout? This is measured against the total membership of the party at the time of the vote.

PartyMajority (No)Minority (Aye)BothTurnout
Alliance0 10100.0%
Con347 (+2 tell) 0095.9%
DUP0 5062.5%
Green0 10100.0%
Independent1 40100.0%
Lab0 189094.5%
LDem0 110100.0%
PC0 30100.0%
SDLP0 20100.0%
SNP0 45 (+2 tell)0100.0%
Total:348 261095.5%

Rebel Voters - sorted by constituency

MPs for which their vote in this division differed from the majority vote of their party. You can see all votes in this division, or every eligible MP who could have voted in this division

Sort by: Name | Constituency | Party | Vote

NameConstituencyPartyVote
no rebellions

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