Clause 19 - Powers to wind up occupational pension schemes
Pensions Bill
5:00 pm
Professor Steve Webb (Shadow Secretary of State for Work and Pensions, Work & Pensions; Northavon, Liberal Democrat)
The explanatory note on this clause is a good deal shorter than the clause itself, and simply suggests that the regulator can wind up the scheme
''in order to minimise the value of claims on the PPF.''
What worries me about that is the implication that what the regulator will be interested in is the potential burden on the PPF, and not necessarily the interests of the scheme members. I am suggesting that those two may be in conflict. Clearly, allowing a scheme to continue unwound-up may have different consequences from winding it up at a particular point, depending, as the hon. Member for Eastbourne said, on the rules for priority order on wind-up, but also on what would happen to the assets if they were retained in a non-wound-up fund, as compared with being transferred to the PPF.
In other words, I am trying to establish in my mind the motivation for the regulator's action. It says in the explanatory notes that it is to look after the PPF's interests. Are those synonymous with the interests of the scheme members? I am slightly worried as to whether they are. When schemes are wound up, we must bear in mind the cost and the time that it takes to wind up. We have all come across instances—obviously, Allied Steel and Wire is one—in which those doing the winding up charge exorbitant amounts for dealing with media inquiries or whatever. The costs of the wind-up come out of the fund, as a result of which the scheme members suffer. The wind-up can also be protracted.
Clause 19 gives the regulator power to wind up a scheme. Does it do it in-house and, thus, on a not-for-profit basis as quickly as possible or does it commission commercial independent trustees to wind up the scheme? If so, can those independent trustees make a mint as certain independent trustees have done? I am worried about the welfare of the scheme members. Will they be ripped off by the people winding up? Will they suffer because the primary concern of the clause is the welfare of the PPF? Will that ever be in conflict with the interests of the scheme members?