Clause 87

Part of Pensions Bill – in a Public Bill Committee at 11:00 am on 19th February 2008.

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Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions 11:00 am, 19th February 2008

Usually, the administrative costs to carry out such an exercise would be levied on the couple in a divorce settlement. The cost of the exercise would be something for them to identify. The PPF will need to work out the cost to it of the exercise and then charge for it. The hon. Gentleman referred rightly to the relatively high level of divorce in this country, but in most cases—not all, because some will be pre-retirement matters—we will be dealing with pensioners, and the divorce rate among pensioners is not as high as it is otherwise.

Not a very large number of people will be affected, so it is unlikely that the administrative costs to the PPF will be substantial and, thus, the cost to individuals who request an administrative processing of their claim is not likely to be great. The cost of having a pension share carried out by the PPF will depend on exactly what activities the board will have to undertake, but it is expected to be in the region of up to £3,000, which means that a couple undergoing a divorce or dissolution of a civil partnership will pay similar costs whether they are sharing a pension or PPF compensation.

The board of the PPF intends to charge divorcing couples similar rates as recommended by the National Association of Pension Funds, which obviously has to carry out similar exercises for divorces. I hope that I have dealt with the hon. Gentleman’s question.