Clause 3 - Accrued rights

Part of Armed Forces(Pensions and Compensation) Bill – in a Public Bill Committee at 4:45 pm on 10th February 2004.

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Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence 4:45 pm, 10th February 2004

Not according to the statutory basis that I outlined in relation to clause 3. I cannot imagine a Government, and certainly not a Labour Government, deciding at a later stage to go from death-in-service benefits of, say, four times a member's salary to three times. The hon. Gentleman used that example earlier. The statutory protection will ensure that scheme members have a right of say in the reduced benefits.

Amendment No. 7 is the key amendment. It cherry-picks the best of both worlds—a bit from that scheme, a bit from this. That is how the hon. Gentleman described it. If we were to make that system available, we would increase the costs of the scheme considerably. I am prepared to consider the costs of doing that. It might be an interesting study in terms of public spending analysis. Conservative Members might not want me to do that, but perhaps we should have a look at how much they propose to spend. I do not include the hon. Member for Hereford in that because I already know about the problems with his public spending proposals and everything else. I do not want to take that line because there are other hon. Members who rightly wish to debate that on the Floor of the House.

I cannot understand how we can pick and mix by choosing bits of different schemes and allowing people to transfer between them. That would be wholly unreasonable and not fair or proper because new entrants would not benefit from that choice. Indeed, that is not a real choice. People who come into our armed forces in April 2005 will be members of the new scheme. Existing members have the choice, on an individual basis, to transfer into the new scheme.

In conclusion—we are all getting our retaliation in quickly, Mr. O'Brien—the hon. Gentleman mentioned two years. I accept that we are looking at a two-year window. We have not finalised the precise timing because it partly depends on the ability of the Armed Forces Personnel Administration Agency's IT system to produce the pension benefit statements needed to allow service personnel to make that informed decision. We will return to transition issues, but I thought it useful to mention that now.

We anticipate that the statements will show respectable benefits under both schemes for existing members. The transfer arrangements are rightly being developed with the Government's actuarial department. We intend to lay the details of those scheme rules in a statutory instrument, as I said. On that basis, I hope that the hon. Gentleman withdraws

his amendment because it is not necessary. I also hope he will accept that I have undertaken to bring the armed forces pension scheme into line with other pension schemes, both public and private, in relation to the protection that armed forces personnel should have under the Pensions Act 1995.