Clause 186 - Matters requiring agreement of the employer

Pensions Bill – in a Public Bill Committee at 2:45 pm on 23rd March 2004.

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Photo of Mr Chris Pond Mr Chris Pond Parliamentary Under-Secretary, Department for Work and Pensions 2:45 pm, 23rd March 2004

I beg to move amendment No. 338, in

clause 186, page 118, line 12, after first 'the' insert 'active'.

Photo of Mr James Cran Mr James Cran Conservative, Beverley and Holderness

With this it will be convenient to discuss Government amendments Nos. 339 and 341.

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

The amendments deal with the modification requirements under subsection (3). Government amendment No. 338 amends subsection (3)(b) so that only the active members of the scheme must be notified when the trustees or managers have exercised their power to modify the scheme with regard to the future accrual of benefits. Last Thursday, we discussed the Bill's approach to active, pensioner and deferred members. We put undue emphasis on active members, so I want to underline that, under the provisions, deferred and pension members will not be affected by a change to the future accrual of benefits.

Government amendment No. 339 requires members to be notified within one month of the modification

taking effect, not within one month of the decision being made. The change makes it clear that modification is not dependent on the notification having taken place and gives the trustees a longer period for notification beginning on a clearly defined date.

Government amendment No. 341 is a technical amendment to subsection (5), which extends the regulator's powers to impose sanctions in circumstances in which the trustees or managers fail to take all reasonable steps to comply with the notification requirements.

I trust that the Committee will feel able to accept the amendments.

Amendment agreed to.

Amendments made: No. 339, in

clause 186, page 118, line 12, leave out 'decision being taken' and insert 'modification taking effect'.

No. 340, in

clause 186, page 118, line 15, leave out

'as soon as reasonably practicable'

and insert 'within a reasonable period'.

No. 341, in

clause 186, page 118, line 17, after 'subsection (1)', insert ', (3)'.—[Mr. Pond.]

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

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I want to make a couple of points. I apologise that they did not materialise in the form of amendments, but that was because of the breathtaking, breakneck speed at which we considered earlier parts of the Bill. Again, they involve issues raised by the NAPF that merit the Committee's consideration.

On clause 186(1), the NAPF welcomes the provision requiring trustees to gain the employer's agreement on key funding issues. That makes sense. On clause 186(2), it would like to replace the expression

''the future accrual of benefits''

with the phrase ''anything that does not affect accrued rights''. It takes the view that that would be clearer and more helpful to schemes. I do not know whether officials could examine that proposal, and I do not expect the Under-Secretary to have an instant response.

Beyond that, we have no comments to make except on subsection (4), but I think that they will arise more naturally in respect of the powers of the regulator that are set out in clause 188(2). I will therefore leave those further points for the moment.

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

Funnily enough, I did have an instant reaction. It was to disagree with the hon. Gentleman's proposal that we should insert the wording ''accrued rights'', because it is open to interpretation. The term ''future accrual of benefits'' means benefits that accrue after the date of the modification. The wording was carefully chosen. I hope that the Committee will accept

that it was chosen for a purpose and accept the clause as it stands.

Question put and agreed to.

Clause 186, as amended, ordered to stand part of the Bill.