Clause 230 - Overriding requirements
Pensions Bill
3:15 pm

Mr Malcolm Wicks (Minister for pensions, Department for Work and Pensions; Croydon North, Labour)

I beg to move amendment No. 559, in

clause 230, page 154, line 13, leave out 'section 204' and insert

'sections [no indemnification for fines or civil penalties] and 204'.

Mr Win Griffiths (Bridgend, Labour)

With this it will be convenient to consider the following:

Government amendments Nos. 567, 568 and 570.

Government new clause 32—No indemnification for fines or civil penalties.

Mr Malcolm Wicks (Minister for pensions, Department for Work and Pensions; Croydon North, Labour)

Welcome back to the Committee, Mr. Griffiths. As a courtesy to the Committee, before I speak to these amendments I want to say that we have agreed through the usual channels to conclude our debate this afternoon after discussion of this clause. That is because the Government recognise that the new clauses dealing with the requirement to consult will be the cause of considerable debate but as they were tabled only on Friday the Opposition's amendments are starred on this morning's amendment paper. In the interests of thorough scrutiny and proper courtesy we are content to ensure that there is thorough discussion on these important clauses, and we look forward to that occurring on Thursday.

New clause 32 replaces section 31 of the Pensions Act 1995, which provides that when a trustee of a trust scheme is liable to pay a fine, either following conviction for an offence or from a penalty imposed by the regulator, the assets of the scheme may not be used to indemnify the trustee. Section 31 also provides that if any trustee has been reimbursed in this way they may be guilty of an offence if they are aware or have reasonable grounds to believe that that has happened. The provisions extend to reimbursements for premiums for insurance against such fines being imposed. Section 31 ensures that trustees are personally responsible for any final penalty for which they are liable. Those measures are entirely right and sensible. The new clause has the effect of extending those provisions so that they would cover not only trustees of trust schemes, but also managers of personal pension schemes.

I believe that it is right that members of personal pension schemes should receive the same amount of protection as members of occupational schemes, whenever that is appropriate. The new clause would ensure that managers of personal pension schemes, like trustees of trust schemes, would be personally responsible for their actions, and that any fine imposed on them as a result of their actions could not be passed on to scheme members.

The four amendments that travel with the new clause are technical in nature and would ensure consistency throughout the legislation. Amendment No. 570 would repeal section 31 of the 1995 Act; amendments Nos. 567 and 568 would remove references to section 31 that become unnecessary as a

consequence of the repeal; amendment No. 559 would ensure that the new clause would override any scheme rules that may otherwise seek to enable trustees to be indemnified.

Mr Nigel Waterson (Eastbourne, Conservative)

I am grateful to the Minister for that explanation, which seems to make eminent sense. Before I come to the detail, I should like to thank the Minister for his indulgence. We were somewhat wrongfooted by these late new clauses, although I am sure that that was nobody's intention. We have now tabled amendments, but they are starred amendments.

It is only fair to be totally balanced about this; it is only fair on the officials that they should have a chance to brief Ministers on our amendments. It is unfortunate, but we will probably make more progress in the long run if we call a halt now and start afresh on Thursday. As the lawyers would say, that is entirely without prejudice to any new amendments or new clauses that may surface between now and then, with or without explanatory notes. By the way, my e-mail address is watersonn@parliament.uk.

We can see the wisdom of new clause 32; it largely replicates something in earlier legislation, as the Minister said. Of course it is right that the assets of a scheme should not in any way respond to fines of civil penalties personal to the trustees or the managers of a scheme. However, that raises an echo of an issue that we dealt with some time ago in our amendments: the question of indemnifying trustees and managers in situations in which they have quite properly incurred liabilities.

I am slightly undecided as to where we left that debate; I suspect that we withdrew our amendments and that nothing much else happened. However, perhaps the Minister said that he would come back to the Committee on the issue. When a scheme is in effect taken over by the PPF, we think it appropriate that there should be proper measures in place to ensure that legitimate liabilities incurred by trustees and managers, which are not properly ongoing liabilities, should be covered in some way by a full indemnity. I am sure that we tabled some such amendments and that there was a debate about the matter; however, beyond that my memory fails me.

Mr Malcolm Wicks (Minister for pensions, Department for Work and Pensions; Croydon North, Labour)

Let me too refresh my memory on that more general point about indemnity. I thank the hon. Gentleman for his support for this measure. If people are to be penalised financially as a result of their conduct, it would be absurd if the scheme rather than the individual ended up writing the cheque. I thank the hon. Gentleman for his support.

Amendment agreed to.

Clause 230, as amended, ordered to stand part of the Bill.

Further consideration adjourned.—[Margaret Moran.]

Adjourned accordingly at twenty-six minutes to Four o'clock till Thursday 22 April at half-past Nine o'clock.