Schedule 14 specifies how the override power may be used and also constrains the use of that power. Paragraph 2(1) indicates that the power can be used either to increase employee contributions or to reduce the future accrual of benefits, or indeed both, but it cannot—through either or both of those measures—recoup more than the lost rebate. We will produce regulations that explain exactly what we mean by the total annual employee contributions and resolve various other definitional issues.
Under paragraph 3, the power may not be used to affect adversely the subsisting rights of scheme members or survivors. It is not about taking away rights that people already have; it is about future accruals or increases in the contribution rates. As this is complex stuff, we will require an actuary’s certificate; an actuary will have to certify that the amount that has been recovered through the measures that have been taken are within the limits and that too much has not been taken.
The power has to be used within a set time. We envisage that it will not hang around for a long time; five years is the sort of period that we are thinking about. Our friend the draftsman is back again with his rather helpful Q and A-style explanatory notes to the legislation, which say:
“Can the power be used more than once?”
We confirm, in paragraph 9(1) of the notes on the schedule, that
“The power may be used to amend a scheme...on more than one occasion.”
As I said earlier, the point is that the firm can come back for a second bite, which might encourage it not to try to get the whole lot in one go if it did not feel it needed to, but it has the comfort of knowing that if it had to come back a second or third time, it could do so. Broadly, that covers the purpose of schedule 14. I commend it to the Committee.