Clause 90

Part of Pensions Bill – in a Public Bill Committee at 11:15 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 11:15 am, 19th February 2008

The clause sets out how the board of the PPF discharges its liability under a compensation-sharing order following a divorce, annulment, dissolution of a civil partnership or a nullity. It is important that the board can be certain that it has discharged its liabilities and that the parties to the divorce or dissolution are properly notified about how that has been done.

The clause makes it clear that liability is discharged when the notification is sent to the transferee that the sharing order has been implemented and that they have compensation rights in the PPF. Clearly, that cannot happen if the transferee has died, for example. Instead, we need to look at the rights of others on the death of a person. When members die, the PPF pays compensation to surviving spouses, civil partners, unmarried partners and dependent children when the scheme’s rules make the appropriate provision. That is why we need to ensure that, when the transferee dies before the transfer is complete, the correct compensation rights are created for their surviving partner or children. That is no different from the way in which the PPF would pay survivors benefits following the death of members after the transfer was completed. However, because the implementation is not complete, that is potentially a complex and somewhat technical matter, which is why the necessary provisions will be set out in regulations. Amendment No. 9 would remove the power to make those regulations.

Amendment No. 8 would mean that the board would have discharged its liability only when it had notified both the transferor and the transferee of the new rights created for the transferee by the compensation share. Clearly, it is right that both parties receive appropriate notification of the outcome, but discharging liability is different from merely providing information. It is right that information should be given to both parties on the outcome of the compensation-sharing order.

Regulations made under clause 93, which covers the supply of information about compensation sharing, can specify the information that the board of the PPF will have to provide to the parties in consequence of the implementation of the sharing order. The regulations will make sure that both parties to the divorce or dissolution receive the appropriate information about how the sharing order has been implemented.

Amendment No. 8 is thus unnecessary and has the potential to create ambiguity. We need a clear determination of when the legal process for the PPF board is completed. The clause sets out that legal process. It does not mean that the other party will not be informed. We intend to ensure under regulations that the other party will be informed, but it will not be a necessary part of the legal process for the board to have ensured that both parties were informed. Someone might have gone abroad or be difficult to contact. I have known of divorce cases in which someone has left the country and does not want to be available.