Clause 19 - Powers to wind up occupational pension schemes
Pensions Bill
5:00 pm
Mr Malcolm Wicks (Minister for pensions, Department for Work and Pensions; Croydon North, Labour)
The purpose of the clause is to allow the regulator to wind up a scheme during the
assessment period. No winding up of a scheme may commence during an assessment period, which is set out explicitly under clause 107, to prevent the scheme from commencing wind-up due to automatic triggers in the scheme rules or by a resolution of the employer or trustees. However, if the scheme is wound up, that may be more beneficial for the members, for example, when the scheme is funded sufficiently to buy out pension benefits at 100 per cent., but non-pensioner members at only 95 per cent. To protect that funding level, the regulator may wind up the scheme.
If the scheme were allowed to continue, the funding level might decrease further, resulting in the non-pension members receiving 90 per cent. benefits under the new pension protection fund. The purpose of the clause is to allow the regulator to make a judgment in the interests of scheme members. I am sure that members of the Committee will support that position.
As for the priority order regulations, the hon. Member for Eastbourne will have to be a little more patient, but we shall soon be reporting to Parliament on progress. Despite his question, our proposal is not very much linked to the important issue of ASW and other workers in respect of retrospection. That is a different matter. The hon. Member for Northavon asked who would carry out the wind-up. Officially, the regulator would take such action. At this stage, the regulator does not exist so I cannot talk in detail about exactly which people inside or outside would be responsible for the winding up. It is an important question and is based on more than detail; nevertheless it is not something that we can state with great clarity at present. However, if I am wrong about that and I can let the hon. Gentleman have more information, I shall be happy to do so.