Amendment 26

Public Service Pensions and Judicial Offices Bill [HL] - Report – in the House of Lords at 4:00 pm on 29th November 2021.

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Viscount Younger of Leckie:

Moved by Viscount Younger of Leckie

26: Clause 18, page 15, line 34, leave out subsection (2)Member’s explanatory statementThis amendment is in consequence of the government amendment of clause 92 which applies the definition of “voluntary contributions” to the whole of Part 1.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My Lords, this second group consists of three technical areas of amendments. I reassure the House that my remarks will be somewhat shorter than on the previous group. As before, I will set out the key themes in each area, rather than talking through the detail of each amendment. The three key themes these amendments relate to are: first, matters concerning voluntary contributions; secondly, flexibility in delivering the remedy in respect of judicial scheme members; and, thirdly, the closure of old schemes. Once again, I will be happy to turn to specific amendments if your Lordships have any questions they would like to raise.

Before I turn to the first area of amendments, which relate to member voluntary contributions, I thank the noble Lord, Lord Davies of Brixton, to whom I am most grateful for raising this matter in Grand Committee, which has assisted the Government in developing these new amendments. I gave the noble Lord assurances in Grand Committee that the Government would consider how the Bill should provide for members who were prevented from making voluntary contributions to the legacy schemes as a result of the discrimination that arose, and I am pleased to be able to bring forward amendments to that effect now.

First, these amendments insert new clauses so that scheme regulations may allow members to enter into remedial voluntary contributions arrangements where they would have done so had the discrimination not arisen. Additionally, the amendments ensure that information that must be provided to members includes information about remedial voluntary contribution arrangements as well as details of the eligibility criteria and the process for entering into those arrangements.

Secondly, these amendments will amend Clause 18 to ensure that the provisions work correctly in relation to persons other than a member who may obtain rights in relation to a member’s voluntary contributions.

Thirdly, the amendments clarify that, where compensation is paid to members of the judiciary representing an amount that was paid as voluntary contributions less the tax relief they received at the time, any rights that were associated with those contributions are extinguished. The amendments also clarify that, where the member is deceased, the compensation should be made to the member’s personal representatives.

Finally, the amendments add a new clause to provide that no new arrangements to pay voluntary contributions may be entered into after 31 March 2022 in a legacy scheme. This reflects the fact that the legacy schemes will close on that date. However, any existing voluntary contributions arrangements that members may have entered prior to 1 April 2022 may continue. Additionally, this prohibition does not apply to the new clauses which permit members to enter into remedial voluntary contributions arrangements in the specific circumstances I have set out.

Let me now turn to the second area of amendments in this group. These are technical amendments required to ensure the remedy can be applied most effectively in respect of judicial scheme members. Clause 65 defines the election period as a three-month period beginning with such date as is specified by the relevant authority and that the relevant authority may extend the election period in relation to a particular person, if they consider it just and equitable to do so.

It is important that judges in scope of the remedy have enough time to make an informed decision regarding their scheme membership for the remedy period. Therefore, amendments are made to Clauses 65 and 60 to provide for further flexibility to respond to judges’ individual circumstances by allowing for there to be more than one election period, and for an information statement to be sent to each member before the start of their respective election period.

Finally, I come to the third and final area in this group. This last area amends the valuations and governance framework for public service pension schemes to ensure that it operates correctly when old schemes established under the Public Service Pensions Act 2013, or its Northern Ireland equivalent, are closed and new schemes are established. In the present context, these amendments are most relevant to the reformed judicial pension scheme that is set to replace the 2015 scheme. However, the same issues will arise if, in future, other schemes are closed and new ones created.

Schemes that are closed to future accrual do not require future stand-alone valuations. A new clause will ensure that these are no longer required and that an employer cost cap need not be set for the purpose of measuring changes in the costs of those schemes under the cost control mechanism.

The new clause will also allow existing governance frameworks to be carried over from old schemes to new schemes. Additionally, an amendment to Clause 80 will ensure that the cost control mechanism can operate correctly by ensuring that the employer cost cap of a new scheme can be set after the regulations have been created.

I hope the House will agree that, important though they are, all three sets of amendments I have outlined in this group make necessary technical changes to the existing legislation so as to ensure that the remedy can operate as intended. With that, I beg to move.

Photo of Baroness Janke Baroness Janke Liberal Democrat Spokesperson (Work and Pensions)

My Lords, I thank the Minister for responding to many of the issues that arose in Committee and welcome the additional flexibility with regard to the voluntary contributions and the period when remedial contributions can be made.

I would like to question the eligibility for voluntary contributions. One of the areas we discussed was about people—for example, with caring responsibilities—who would wish to make up their pension and in their legacy scheme would have been able to do that. Examples include women who have taken time out to look after children or people with caring responsibilities who have done the same. Will these members have the chance to make these remedial contributions to augment their pensions, as they would have been able to within the legacy scheme? Perhaps the Minister could clear that up for me.

Photo of Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede Shadow Spokesperson (Justice), Shadow Spokesperson (Home Affairs)

My Lords, once again I thank the Minister for his explanation of this group. We are content for these changes to be made to the Bill. I particularly welcome the provisions on voluntary contributions, which will now allow for a member to make voluntary contributions where they would have done, but did not due to the pension changes that led to the arising discrimination. This responds to a concern raised by pension schemes and by my noble friend Lord Davies in Committee, which was recognised by the Minister. I wonder whether the Minister can give us an assurance that more information will be forthcoming, over the Bill’s passage through the Commons, on how this will be provided for in practice.

I also welcome the provision providing flexibility for judges over their election period and that every member must be provided with an information statement by the scheme before their election period starts. At later stages this afternoon we will come back to this question of how information and guidance are provided to members and how they will access support. That is in an amendment to be moved by the noble Baroness, Lady Janke. I am glad to see that this has been recognised, at least to some extent, in this group. We are happy to support these amendments.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My Lords, once again, my closing remarks will be relatively brief. I thank the noble Baroness, Lady Janke, and the noble Lord, Lord Ponsonby, for their broad support for these amendments. As one or two questions were raised, I will give some more information on additional voluntary contributions, which may be helpful, particularly with regard to the question on eligibility raised by the noble Baroness.

The proposed new clauses provide that scheme regulations may not permit a member to enter into such arrangements after one year from the day on which the member is provided with their remediable service statement, or their information statement in the case of the judiciary, or such later time as the scheme manager considers reasonable. The proposed new clauses will be subject to Treasury directions, which I understand we will be speaking about in a later group—under Clause 24 for Chapter 1 schemes and under Clause 58 for judicial schemes. This is set out in Amendments 45 and 90, and is consistent with the similar powers in Part 1 of the Bill. These directions will help to ensure that scheme regulations take a consistent approach, which is very important in providing members with remedial voluntary contribution arrangements.

I hope that this offers some explanation but, again, bearing in mind the technical nature of the noble Baroness’s question, I will be keen to read Hansard and will write if further information is required.

Amendment 26 agreed.