Clause 20 - Freezing order
Pensions Bill
10:15 am
Mr Chris Pond (Parliamentary Under-Secretary, Department for Work and Pensions; Gravesham, Labour)
I should clarify the fact that people who reach retirement during the period will still get their pension, but it will be at the level that they would have received if they had retired as deferred members. The hon. Gentlemen mentioned a situation where someone reaches retirement age just as, or just before, the freezing order is imposed. I should explain that the regulator will have an opportunity within the freezing order to make a judgment that a particular action, such as the moving into retirement of that individual, does not reduce the overall generality of interests of the members—in other words, that this is a right that had already accrued. In those circumstances, the regulator could decide to validate that action. However, it would have to be positive validation, and whether that was allowed to happen would be for the regulator to judge.
The hon. Member for Northavon asked what is meant when the Bill says that no benefits would accrue under the scheme. Clause 26 gives the regulator the power to make directions to cover the period of the freeze when no wind-up order is made. For example, if the scheme and the employer are sufficiently healthy, the regulator can order benefits to have accrued for the freezing period. The regulator's objective is to protect members' benefits. If the circumstances make it right to order an accrual of benefits during the freezing period, the regulator can do that. If it is not in the interests of the generality of the members, the judgment might be that that is not the right thing to do. I think that I have answered most of the points that have been raised by hon. Members, and on that basis I commend clause 20 to the Committee.
Question put and agreed to.
Clause 20, as amended, ordered to stand part of the Bill.