Clause 17
Pensions Bill
2:15 pm
James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick and Leamington, Labour)
Indeed, yes.
As the hon. Gentleman said, clause 17 and schedule 5 remove the Secretary of State’s role in approving actuarial guidance. This arises from one of the recommendations of the Morris review of the actuarial profession. Clause 17 introduces schedule 5, which amends nine references in legislation. It removes the requirement for the Secretary of State to approve prescribed actuarial guidance notes and, in other cases, it removes the power to make regulations to prescribe that the Secretary of State approve such guidance. The references can be found in the Bankruptcy (Scotland) Act 1985, the Insolvency Act 1986, the Pension Schemes Act 1993, the Pensions Act 1995 and the Pensions Act 2004.
Actuarial guidance is currently produced by the Institute of Actuaries in England and the Faculty of Actuaries in Scotland. It ensures that all actuaries calculate pension liabilities on a consistent basis. The Faculty and Institute of Actuaries is also the professional body for actuaries. In order to ensure that there is no conflict of interest between those roles, legislation requires certain actuarial guidance to be approved by the Secretary of State. However, following the Morris review, the actuarial profession is now subject to independent oversight by the Financial Reporting Council, which is the independent regulator for corporate reporting and governance.
The FRC will establish the Board for Actuarial Standards to set technical standards for actuaries and to oversee the prescribed actuarial guidance. The Faculty and Institute of Actuaries remains the professional body for actuaries. It is therefore no longer necessary or appropriate for the Secretary of State to approve actuarial guidance. I commend clause 17 and schedule 5 to the Committee.