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Lord Lucas: Perhaps I may clarify a little the intention behind this amendment and, I hope, lay to rest some of the fears of the noble Lord, Lord McIntosh. As regards indexation of pensions, that concerns their indexation in payment. Scheme members are only likely to be aware that there is a problem in relation to the indexation of their pensions once it is in payment. The pensions ombudsman and not the parliamentary ombudsman, has all the necessary power to deal with complaints from scheme members that their pension has not been indexed in accordance with the requirements under this Bill. So it is unnecessary to involve OPRA in this matter.

This sort of minor problem—because those running the schemes will be perfectly well aware what their obligations are under this Bill—is just the kind of individual matter which is best dealt with by the ombudsman. If widespread misbehaviour by one particular scheme occurs, undoubtedly there will be maladministration of that fund which might come to OPRA's attention in other spheres. As regards the non-observance of a technical regulation like this, surely the ombudsman is the usual and best way for dealing with these kinds of complaints. It is also a well established one.

As regards equal treatment, this Bill will make clear that occupational pensions schemes should provide equal benefits to men and women, but it does not specify how the schemes should achieve that. There is therefore no specific obligation which the authority can enforce. Equal treatment currently falls within the remit of the pensions ombudsman. Again, if there is an individual problem surely he is the best person to deal with it. It can also be dealt with by industrial tribunals.

As regards the compensation board, this Bill provides powers for it to require information from those involved with running schemes. The enforcement of these requirements is surely best left to the board itself. It is directly involved with the problems and is surely in the best position to look after matters which fall within its own competence. From what I have said, I hope that the noble Lord, Lord McIntosh, realises that to involve OPRA in these areas would be to duplicate functions which are already well carried out by other organisations.

6.15 p.m.

Lord McIntosh of Haringey: On the contrary, it seems to me that the Minister has made no case whatsoever for this amendment. It is true that in the last

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resort cases will have to go to the pensions ombudsman and then to industrial tribunals. That must be the case. The point about this amendment is that it is taking away the power of the authority to remove trustees if they are in breach of these provisions. Whatever the noble Lord may say they are not minor provisions, but ones which are critical to the just administration of pensions schemes. Price indexation, equal treatment and the supply of information to the Pensions Compensation Board are not minor matters but are inherent in the adequacy of an individual pension scheme.

The point I ask the Government to answer is this: if these derelictions are "serious or persistent", as called for in Clause 3(1), does the ombudsman or the industrial tribunal have the power to remove those trustees who are in "serious or persistent breach" of those duties? If not, I insist that the amendment is damaging.

Lord Lucas: I listened to what the noble Lord said, but we still believe that the pension ombudsman has all the powers necessary to deal with these problems.

Lord McIntosh of Haringey: Does he have the power to remove trustees who are in "serious or persistent breach" of their duties?

Lord Lucas: No, but we believe that he has the powers necessary to deal with the kinds of problems which are dealt with in the sections of the Bill which are excluded by this amendment.

Lord Monkswell: I find this debate absolutely amazing. What are we talking about? The paying of people's pensions correctly and preventing discrimination are not minor technical matters, but run to the heart of what we are talking about. Are we in the business of setting up an Occupational Pensions Regulatory Authority to ensure that people who are members of occupational pensions schemes get them paid fully when they are supposed to be paid? If the Government believe that infringement of those responsibilities by the trustees are minor technical matters, I wonder what this business is about.

It is not a minor technical matter if a member of an occupational pensions scheme is not paid the pension he is entitled to. It is the responsibility of the trustees to ensure that that is done. If they do not do that, then we all thought that it was the duty of the Occupational Pensions Regulatory Authority to do something about the trustees. Are we seriously to accept the Government's view, or not?

Lord Lucas: On this side of the Committee we are clearly of the opinion that any widespread breach of indexation or misadministration as regards equal treatment would involve a scheme being in breach of obligations which would bring OPRA into play. This is a somewhat complicated area and I understand the principles which the noble Lord, Lord McIntosh, has raised. I shall write to him and set out in detail why we believe that this amendment is right or whether, on further consideration, we believe that it needs improvement.

Lord McIntosh of Haringey: I cannot resist that offer. It is valuable to know that the second thoughts

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which the Government have had about this Bill are subject to the possibility of third thoughts. I welcome the offer which has been made. I shall withdraw any opposition to the amendment.

Baroness Hollis of Heigham: For the time being.

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 22:

Page 2, line 22, at end insert ("or of trust law as it applies to occupational pension schemes, and, in particular, of the duty of trustees to exercise each and all of their powers in the sole long term interests of the beneficiaries to whom they owe a duty of care and prudence.").

The noble Lord said: In moving this amendment I shall speak to Amendments Nos. 52, 62, 69 and 103. The noble Viscount the Leader of the House said, when winding up the debate last Wednesday on the Civil Service, that we live,

    "in an age which puts a premium on openness and accountability".—[Official Report, 1/2/95; cols. 1565-66.]

I agree with him entirely. This amendment will bring openness and accountability to the Pensions Bill. The noble Lord, Lord Marsh, spoke about the need for people to take more interest in their pension affairs. This clause will enable them to do that. There is a special need for openness and accountability in this Bill because not only are we dealing with the pensions of our citizens, but with the management of one-third of all the shares on the London Stock Exchange. That affects the well being of all of us and that is why it is doubly important that there should be openness and accountability. Not only has the regulator a responsibility to supervise occupational pension schemes and enforce the legal responsibility of governing them: surely, as my noble friend Lady Hollis has pointed out, he also has a fiduciary duty under trust law to promote proper management of pension funds. The Goode Committee clearly stated that such duties must be put on a statutory basis.

The Secretary of State for Social Security said that the regulator:

    "will have all the powers in full which were in essence recommended by the Goode Committee."—[Official Report, Commons, 23/6/94; col. 365.]

The way the Bill is drafted at present has the hollow sound of stable doors being closed after horses have bolted. The Bill as drafted ignores one of the most important lessons we should have learned from the Maxwell experience. Those involved in the running of the pension management company knew what was going on but, because of our libel laws, they could not speak out and blow the whistle. A statutory right for beneficiaries to know would have overcome this. This amendment provides that statutory right.

However, yet more security is needed because the inventiveness of the criminal mind is limitless and we cannot legislate for everything. Information can protect against future negligence or criminality and will help to sound early warning bells. Most importantly, the regulator must have powers to enforce and encourage the openness about which the Leader of the House spoke.

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The Goode Report spoke of such codes of practice and at paragraph 4.19.20 said that they should:

    "have a useful role to play in encouraging good business practice in matters not conducive to legislation or as a voluntary improvement on legal requirements."

This is so that members can understand how their scheme works, how their benefits accrue, how their scheme performs relative to other schemes, and what their stake is in the pension scheme.

Mr. Jim Stratton, the deputy managing director of Standard Life, said last week:

    "Regulation should be directed at creating a fair market in which the customers could protect themselves. This focuses on providing information to consumers, rather than keeping records for regulators".

With this greater understanding and openness, members have a statutory right to know and are in a much stronger position to take an active interest in their scheme, and thereby exercise the best kind of regulation—informed regulation. Nowadays we call this "empowering people", so that they can eliminate incompetence, negligence or criminality in the management of their own pension schemes. I beg to move.

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