Pension Scheme Wind-ups

Part of the debate – in the House of Commons at 4:31 pm on 24 February 2004.

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Photo of Andrew Smith Andrew Smith The Secretary of State for Work and Pensions 4:31, 24 February 2004

The hon. Gentleman makes a persuasive argument. As the Secretary of State for Work and Pensions, I cannot say that I would not be tempted by such an argument to get more resources to help with an intractable problem in pensions. However, I do not believe that he is so naive as to imagine that if suddenly there were a fund containing millions or tens of millions of pounds there would not be a long queue of deserving causes knocking at the door. Indeed, to develop his point about the importance of confidence in pensions, there is another argument that would add to the weight of evidence—if the matter is so important, is there not a proper claim on public funds anyway? In other words, the case for using unclaimed assets could apply equally powerfully to the use of public funds, if that were feasible and if and when we had explored all the issues.

The hon. Member for Havant also spoke in detail about the minimum funding requirement. As he said, the MFR was set out in the Pensions Act 1995, and the secondary legislation that subsequently took effect in April 1997 requires MFR valuations to be carried out in accordance with a guidance note issued by the Faculty and Institute of Actuaries. Revisions to the actuaries' guidance note reflected professional judgments on a range of relevant variables that change over time, including some mentioned by the hon. Gentleman such as interest rates, annuity prices and demographic trends.