Clause 44 - Duty to notify the Regulator of certain events

Pensions Bill – in a Public Bill Committee at 3:15 pm on 11th March 2004.

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Question proposed, That the clause stand part of the Bill.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

Clause 44 provides for a new statutory obligation on trustees and managers of

occupational pension schemes to report to the regulator in writing any prescribed event in relation to the scheme. Those events must be reported as soon as reasonably practicable. Along with the regulator's power to collect information relevant to the functions of the PPF board, the clause provides the backbone of the early warning system for the PPF.

We are working with the Pension Benefit Guaranty Corporation of the United States of America and the pensions industry in the United Kingdom to determine precisely what the notifiable events should be. The events will be specified in regulation and will include, for example, corporate restructuring affecting an occupational pension scheme or a significant payment becoming due to an individual scheme member in certain circumstances.

The regulator's power to collect such information serves two purposes. First, it may alert the regulator to potential or actual problems, and enable it to step in as early as possible to put things right. In doing so, the regulator may be able to prevent scheme members from losing out financially. It may also prevent a scheme falling into the jurisdiction of the PPF when it would otherwise have done so, which, in turn, will protect the members of all pension schemes that are liable to pay PPF levies.

Secondly, the regulator will be able to gather and disclose to the PPF any information that is relevant to the fund's functions. That will enable the PPF board to fulfil those functions. For example, the information that the regulator collects will be used by the board when setting and calculating the levies. It also means that, where the PPF becomes involved with the scheme, it will be able to act quickly if necessary to protect scheme members and prevent the scheme funding level from deteriorating further.

Photo of George Osborne George Osborne Shadow Minister (Treasury)

In general, clause 44 seems sensible. I want to pick up again on the use of the phrase ''as soon as reasonably practicable.'' The Minister says that the clause is the early warning system and the crucial trigger that will help protect scheme members who may be in danger of losing their pensions. However, ''as soon as reasonably practicable'' is broad and allows someone to plead that it was not reasonably practicable for them to do something for a considerable amount of time. I want the Minister's reassurance that the regulator will take a tough view of people who procrastinate in providing important information.

The Minister also told us something of what would be in the regulations, which will obviously be important. Perhaps he will tell us when we might see them. He says that he is consulting with the Americans and others. I understand the Government's desire to get on with the Bill and give our constituents the protection that we all want them to have, but there is a balance to be struck between that and proper parliamentary scrutiny, with access to the full facts as we investigate legislation on behalf of our constituents.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

On that last point, I can only say that we will bring forward the regulations when

reasonably practicable. We are the party that tries to be reasonably practical.

Photo of George Osborne George Osborne Shadow Minister (Treasury)

The definition of new Labour!

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

Well, the definition of new Labour is success, I think.

On whether we will take a tough view on the regulations, the answer is yes, of course we will. I hope that the hon. Gentleman is satisfied with that.

This is a key clause for the Bill, because when major restructuring takes place across companies, or when there is a danger that some people in smaller companies may, because of early retirement, take much of the fund with them, it is important that those events are reported to the regulator. That is the intention of clause 44.

Question put and agreed to.

Clause 44 ordered to stand part of the Bill.