New clause 8 - Transition arrangements

Part of Armed Forces (Pensions and Compensation) Bill – in a Public Bill Committee at 4:30 pm on 24th February 2004.

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Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence 4:30 pm, 24th February 2004

That is the case. The hon. Gentleman raised an interesting issue about these windfall examples. I have not previously had sight of those cases, so I am grateful to him for raising the issue. Perhaps he will forgive me for saying that I want to go away and have a look at it in more detail.

I shall deal with the four proposed new clauses. The purpose of the first new clause is to require details of the transfer arrangements of the new pension scheme for current service personnel to be set out in a statutory instrument, as well as to allow the Committee the opportunity to discuss that aspect of the new arrangements. The statutory instrument for the new armed forces pension scheme, in line with normal practice, will set out the transfer arrangements applying to those currently serving members of the armed forces who choose to join the new scheme. Therefore, I can give the hon. Gentleman a categoric assurance that when we come to the secondary legislative aspects, we will set out the issues in relation to transfer in a statutory instrument. In my view, there is no need for them to be specified in primary legislation.

New clause 12 concerns the mortality-longevity assumptions used to cost the new pensions scheme in the public domain. Here I have good news for the Committee: I have already made those assumptions available to the House. The Defence Committee had them, and they were published in the second volume of the Committee's first report of the 2003–04 session, which covered oral and written evidence in relation to armed forces pension and compensation. If my memory serves me correctly, it was tagged to the debate on Second Reading on 22 January. I intend for that information to continue to be provided to the House whenever the scheme is re-costed, but I do not see any need to make that the subject of primary legislation. I hope that that is a suitable explanation for the Committee.

New clause 13 would require the Ministry of Defence to provide each service person eligible to transfer with a comparative pension benefit statement. I have already indicated that we intend to do that, and I recognise the importance of ensuring that our current service personnel have the information they need to make an informed decision on which pension scheme will meet their personal needs.

We will provide a range of material to assist members of our armed forces to make that decision, including individual statements of the benefits under the old and new schemes as well as information about the key features of the two schemes. That information will be fully compliant with the requirements of the Occupational Pension Schemes (Disclosure of Information) Regulations 1996. There is therefore no need for the requirement in new clause 13 to be set out in the Bill.

I was asked about personnel on operations overseas. We recognise the challenges involved in ensuring that all our armed forces personnel receive the information they need. We plan to allow a longer decision period for those on operations. For example,

the civil service had a three-month decision period, and although we have not reached a conclusion, I can comfortably say that ours will be longer. If members of our armed forces fail to respond, we will try to get a response. I can give clarification, however, in that the default position is that they will remain within the current pension scheme arrangements. That approach was also adopted by the civil service scheme, and it is right to follow it until the individuals make the decision to transfer to the new scheme. There should be no confusion about that.

The largest of the new clauses is new clause 22, which runs to five subsections. Someone was clearly working overtime at Conservative central office to produce it. I am sure that those people are now obsessed by the Bill rather than the shadow Chancellor's strange speech, to which we will return at a later date, when you are not in the Chair, Mr. Griffiths.

The Committee has already discussed in detail the majority of issues raised by new clause 22. My right hon. Friend the Secretary of State gave an excellent and eloquent explanation on Second Reading of why enabling legislation is the most sensible way to make the schemes work. As I said this morning, our approach gives Parliament more involvement in the new scheme than it has in the current scheme. That is also in line with what is happening to other public service schemes.

I do not need to go through each subsection in detail, as enough has been said about all the points in our last few sittings.