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Lord Lucas moved Amendment No. 184J:


After Clause 128, insert the following new clause:

Monitoring personal pension schemes

. After section 33 of the Pension Schemes Act 1993 there is inserted—
"Appropriate schemes: "Blowing the whistle".

33A.—(1) If any person acting as the auditor or actuary of an appropriate scheme has reasonable cause to believe that—
(a) any requirement which, in the case of the scheme, is required by section 9(5) (a) to be satisfied is not satisfied, and
(b) the failure to satisfy the requirement is likely to be of material significance in the exercise by the Secretary of State of any of his functions relating to appropriate schemes,
that person must immediately give a written report of the matter to the Secretary of State.
(2) No duty to which a person acting as auditor or actuary of an appropriate scheme is subject shall be regarded as contravened merely because of any information or opinion contained in a written report under this section.").

The noble Lord said: This amendment introduces a new requirement on any person acting as the auditor or actuary of an appropriate personal pension scheme to blow the whistle to the department if he has reasonable cause to believe that the scheme is not satisfying the requirements for continued appropriate scheme status. This requirement will complement both the monitoring procedures for appropriate personal pension schemes which are already in place and the others that we are bringing forward elsewhere in the Bill. It will provide an additional level of protection for personal pension investors. We propose that the enforcement of the requirement and action resulting from the failure to comply will be a matter for the relevant professional body. This requirement closely mirrors Clause 41 of the Bill relating to trust-based occupational pension schemes. I beg to move.

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 185:


After Clause 128, insert the following new clause:

Consent of Regulatory Authority to exceptions

(" .—(1) Section 160 of the Pensions Scheme Act 1993 (terms of contracts of service or schemes restricting choice to be void) shall be amended as follows.
(2) In subsection (1), before "subject" there shall be inserted the words "except where the consent of the Regulatory Authority has been given to such term or rule and".").

The noble Lord said: This is a probing amendment to see whether some thought has been given to the situation regarding the private pension plans and the independent financial salesmen. By removing the regulations in the Social Security Act 1986 to make membership of an occupational personal pension scheme compulsory, the Government opened up the pensions market. The activities which have led to the mis-selling of pensions eventually led to the efforts of the Securities and Investments Board to put the matter right by reviewing each personal pension plan sold.

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Section 160 of the Pension Schemes Act 1993 provides some protection against continued mis-selling while leaving the pensions market open. However, there is now some doubt about whether the SIB—the regulator—has the authority over the independent financial advisers to review the mis-selling because the independent financial advisers have now obtained a judicial review. In addition, if the independent financial advisers carry out the instructions of the PIA and write to their personal pension plan customers in the manner laid down, they may lose their insurance cover.

The purpose of this amendment is to remove the uncertainty created by this situation by authorising the Occupational Pensions Regulatory Authority (OPRA) to regulate the independent financial advisors when they are selling personal pension plans. I beg to move.

Lord Mackay of Ardbrecknish: This amendment seeks to alter law which was first introduced by the Social Security Act 1986. The provision prevents employers from making it a condition of employment that their employees must join their scheme or a personal pension scheme of the employers' choice. As a result, an individual can now choose between state and non-state schemes and between occupational and personal pensions. Employers cannot make membership compulsory.

The noble Lord, Lord Haskel, drew to the attention of the Committee reinstatement for personal pension holders who have been disadvantaged by poor selling practices. Of course, we accept that remedies should be available to those investors.

However, it is for the trustees or managers of individual schemes to decide whether or not people should be able to rejoin their occupational scheme. The Securities and Investments Board has recommended that—where possible, and the scheme is willing—people who have transferred into a personal pension from an occupational scheme as a consequence of bad advice should be reinstated in their original scheme. Public service schemes such as for teachers, nurses, and so forth, are willing to readmit employees who want to rejoin. In other cases it may be best to top up the personal pension. Whatever remedy is chosen, the costs will be borne by those responsible for the mis-selling. With that clear statement of what we expect and believe to be the position, I hope that the noble Lord will be able to withdraw his amendment.

Baroness Hollis of Heigham: Intend!

Lord Mackay of Ardbrecknish: Yes, intend.

Lord Haskel: I thank the Minister for that explanation. Obviously, it seems sensible that the trustees should decide whether pensioners or beneficiaries should be reinstated. I am not sure that my understanding of the amendment and the Minister's response are exactly related to each other. I shall read with interest in Hansard what he has said and, if necessary, I shall return to this matter at Report stage. In the meantime I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.

Clause 129 agreed to.

Clause 130 agreed to.

Schedule 5 [Amendments relating to Part III]:

Lord Lucas moved Amendment No. 186:


Page 116, line 2, at end insert:

("The Social Security Administration Act 1992 (c. 5.)

. In Schedule 4 to the Social Security Administration Act 1992 (persons employed in social security administration etc.) the entries in Part I relating to the Occupational Pensions Board are omitted.").

The noble Lord said: In moving this amendment I speak also to Amendment No. 187. These two amendments are consequential on the abolition of the Occupational Pensions Board and merely remove references to it. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 187:


Page 116, line 14, at end insert:

("The Judicial Pensions and Retirement Act 1993 (c. 8.)

. In section 13(9) of the Judicial Pensions and Retirement Act 1993 (election for personal pension), in the definition of "personal pension scheme", "by the Occupational Pensions Board" is omitted.").

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 187A:


Page 117, leave out lines 3 to 6.

The noble Lord said: In moving this amendment I shall speak also to Amendment No. 187F. Section 34(6) of the Pension Schemes Act 1993 allows the Occupational Pensions Board to withdraw a contracting-out certificate if it is discovered that a scheme is refusing to allow individuals over particular ages to participate. Amendment No. 187F repeals subsection (6). For salary-related contracted-out schemes the responsibility will in future be on the scheme actuary to check that there is no age-discrimination when certifying that the new quality test is met. This requirement will be prescribed either in regulations which will be under Clause 120(12A) (4) and (5) of this Bill or in a guidance note. There will be no change to the existing requirement for money purchase contracted-out schemes except that in future it will be contained in regulations under Section 9(3) (a) of the Pensions Schemes Act 1993. The power will be exercised by the Secretary of State rather than the OPB.

Amendment No. 187A removes the reference in Schedule 5 to subsection (6), which is no longer needed. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 187B:


Page 118, line 9, leave out from ("following") to ("percentage") in line 10 and insert ("the definition of "minimum payment" there is substituted—
"and for the purposes of this subsection "rebate percentage" means the appropriate flat rate").

The noble Lord said: This amendment revises the definition of "minimum payment" to reflect the amount of rebate received by the contracted-out money purchase scheme member and his employer as a reduction in liability to pay national insurance contributions.

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The amendment makes it clear that the definition of "minimum payment" will include only the appropriate flat rate percentage as specified by new Clause 42(A) (3) and not the whole appropriate age-related percentage. That is because the balance of the appropriate age-related percentage over the appropriate flat rate percentage will be paid over direct to the scheme by the Department of Social Security. I beg to move.

On Question, amendment agreed to.


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