I beg to move amendment No. 411, in
clause 123, page 77, line 42, at end insert—
'(7) The trustees or managers of such a scheme shall be discharged from any further liabilities of whatsoever nature; and they will in addition receive an indemnity and hold harmless agreement from the Board.'.
The clause sets out the effect of the board's assuming responsibility for a scheme. It is important to realise that the board does not take over as the trustee of a pension scheme—it is a crucial distinction. Instead, all the property of the scheme is transferred to the board. Under subsection (2), the scheme is to be treated as having been wound up. It seems to us, therefore, that it needs to be clear to the trustees that once they no longer have any assets under their control they will be free from further liabilities. Subsection (2)(b) contains a general discharge from their pension obligations, and pension obligations are defined in subsection (4).
I am told, however, that there may be other circumstances in which trustees will remain liable for obligations that they have entered into, even if those involve assets that have been transferred to the board. For example, if they have entered into a lease they might still be personally liable as trustees under the lease covenants, even though the board might also become liable under subsection (2)(a). We think that it should be made clear that those obligations would disappear once the assets were taken over. It may also be worth while to make it clear that no further claims can be brought against the trustees before the pensions ombudsman. Ministers may want to consider that; perhaps we shall consider the possibility later in the Bill.
I included in amendment No. 411 a requirement for the board to give the trustees an indemnity and hold harmless agreement. I can see no good reason for the trustees, having relinquished, or being advised to relinquish, their responsibilities, not to be given a very wide indemnity by the PPF.
The hon. Gentleman makes an important and relevant point. I am pleased to reassure him and the Committee that his concerns have already been dealt with in the provisions.
I do not think that there is anything between us on the issue of trustees' further liabilities. It has been made clear that once the board has taken over responsibility, it has responsibility. The clause provides that, where a transfer notice is given to the trustees or managers of a scheme, the effect of the transfer notice is to transfer all the property, rights and liabilities of the scheme to the board. The trustees or managers of the scheme are discharged from their obligations to the scheme and the PPF board is required to pay compensation to scheme members on an ongoing basis.
The amendment, however, would allow the trustee or managers of a scheme to be discharged from any
liabilities whatsoever relating to the scheme, and enable them to receive an indemnity and not be held responsible by the board for any consequences of their actions prior to the taking effect of the transfer notice.
The effect of schedule 6 is that only rights and liabilities of an occupational pension scheme transfer to the PPF. That does not include any personal liability of the trustees or managers in respect of their acts or omissions prior to the date on which the transfer notice was given. Prudent trustees should as a matter of course have indemnity insurance in respect of personal liabilities. The amendment would therefore appear to be unnecessary and I hope that with that reassurance the hon. Gentleman will feel able to withdraw it.