Clause 180 - Statement of funding principles

Part of Pensions Bill – in a Public Bill Committee at 11:00 am on 23rd March 2004.

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Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 11:00 am, 23rd March 2004

Now that we have disposed of the amendment, I want to make a couple of quick comments about the clause. It is clear that the

Government intend the statement of funding principles—the SFP, as we shall learn to call it—to be reviewed at least every three years. What is the reasoning behind that? The provisions are perhaps an echo of the 1995 Act, so the Minister will probably tell me, ''If it was good enough for the Tories, it's good enough for us.'' [Interruption.] Indeed, the Halcyon days argument. In all the Committees on which I have ever sat, the arguments have eventually become categorised, and a sort of shorthand has taken over.

If that three-year period were to straddle the recent collapse in the stock market, it could make a complete nonsense of the funding principles going in compared to those that should be coming out. Will further guidance be issued on that? Is there a role for the regulator in spreading best practice? Harking back to part 1—it was a long time ago since we discussed that—it seems that that is something for which codes of practice might be available.

Is the Minister relaxed about the possibility that funding principles might be different for particular schemes? It is inherent in the new system that every scheme will have its own set of criteria that will, supposedly, be tailored to that scheme, but might that create problems, with the application of different funding principles? I am trying to get a feel for how the Minister expects the arrangement to work in practice, particularly on the three-year basis.