Clause 16

Part of Pensions Bill – in a Public Bill Committee at 2:15 pm on 24th January 2008.

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Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions 2:15 pm, 24th January 2008

I do not want to give carte blanche to all 401(k) schemes. We would look at the particular scheme to identify whether it would comply with the nature of our pension schemes. I know a bit about those schemes, and I would have thought that, in most cases, they probably would. Let me not give a ministerial imprimatur to all those schemes. I will just say, in broader terms, that that is the sort of scheme we want to be able to allow. Assuming it is properly regulated by US domestic authorities, it would probably—I use that word advisedly—comply with the requirements, particularly if the employee coming here from the US was satisfied that that was the sort of scheme he wished to use and maintain, and was returning there. That would probably be fine.

I would advise a little caution, however, if a UK-based company decided that it was going to use foreign-based pension products for their domestic employees. We would want to look at that with some care, and ensure that the specific pension scheme fully complied. I suspect that operators of 401(k) schemes would not allow themselves to be put in that position. It may well be that in other countries there are schemes, probably privately run, which would be in the market for taking on pension provision here. If they were in the EEA, we would know how they are regulated. If they were outside the EEA, we would want to be able to say that certain schemes are appropriate and others are not. We are proceeding on that basis. The amendment would interfere with that. However, given the way the hon. Gentleman put his point across, I do not think I need to spend time in rebuttal: I needed only to explain the purpose of the way in which we are addressing the various schemes.