New Clause 21

Part of Pensions Bill – in a Public Bill Committee at 1:30 pm on 21 February 2008.

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Photo of James Plaskitt James Plaskitt Parliamentary Under-Secretary, Department for Work and Pensions 1:30, 21 February 2008

We covered that in previous debates on divorce and arrangements for it. The arrangement is that the pension credits, as they are called, that come out of a divorce settlement and are awarded by the courts can be transferred into such personal pension schemes—the point covered by the hon. Member for Ryedale—but there is a ban on them subsequently being transferred out.

Scheme rules determine whether a scheme will accept the pension credit members. Occupational pension schemes are not obliged to accept them, and very few do. Some existing schemes do not accept them if the former spouse has no connection with the sponsoring company. It is our intention that personal accounts will accept the discharge of a pension credit into personal accounts if that is what the former spouse wishes, provided that the pension credit has come from the personal account or the former spouse has a personal account in his or her own right as either an active or deferred member.

The former spouse may have the pension credit discharged into another pension arrangement, such as a personal pension, if that is what they prefer. There is no compulsion to use personal accounts. The Government’s detailed intention to pension sharing in personal accounts will be covered in the scheme order. I am grateful that the new clause has provided the opportunity for me to explain our intentions. I hope that I have offered assurances. Our proposals are wider in scope than the new clause would allow, and I hope that the hon. Gentleman will agree to withdraw it.