Clause 206 - Inalienability of occupational pension

Pensions Bill – in a Public Bill Committee at 4:00 pm on 18th March 2004.

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

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I am sorry, Mr. Cran. I know that you had a rush of enthusiasm when you allowed me to speak on this clause. I have a fairly simple question.

The Government started off with a great burst of energy by providing us with a fact sheet on the first part of the Bill, but fact sheets seem to have dried up—but of course, I am still not on the mailing list. There may be constant circulation of such information, but perhaps I do not see it because I am not included.

I do not understand the concept of ''inalienability''. I cannot even pronounce it, let alone understand it. Perhaps the Committee could be given a brief explanation of how the clause improves on the existing provision in the Pensions Act 1995.

Photo of Mr Chris Pond Mr Chris Pond Parliamentary Under-Secretary, Department for Work and Pensions

Let me explain the clause. It allows an occupational pension scheme to recover an accidental overpayment of pension to a member of the scheme. It can and does happen that a pension scheme makes a mistake in calculating a member's pension and pays them an incorrect amount. If the payment is an underpayment, the scheme is under an obligation to make good that payment.

It has been the practice in the past that the trustees of the scheme would recover any overpayment simply by reducing future payments of pension to the member. However, recent legal opinions have cast doubt on those arrangements and have said that such recoveries may not be tenable because of the provisions of section 91 of the 1995 Act.

However, the policy is clear. If there has been an overpayment of pension, it is only right that the scheme should be able to recover it. This clause makes it clear that schemes can make such recoveries and, taken together with the existing safeguards, provides a central way for pension schemes to deal with overpayments. First, section 91(6) of the 1995 Act provides that the scheme must give the member a certificate showing the amount to be recovered and its effect on his or her benefits. Secondly, if there is any dispute, the action for cost recovery cannot be undertaken unless a court has made an order to that effect.

I do not know whether the Committee wishes to prolong our considerations, or whether I could provide the hon. Gentleman with a briefing note or letter to explain precisely what is meant by inalienability. The burden of the clause is as I have described it.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I am grateful for that explanation.

Question put and agreed to.

Clause 206 ordered to stand part of the Bill.

Clauses 207 and 208 ordered to stand part of the Bill.