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The Chairman of Committees: My Lords, I should point out that if Amendment No. 156 is agreed to, I cannot call Amendments Nos. 157 or 158. I now call Amendment No. 156.

Lord Lucas moved Amendment No. 156:


Page 39, leave out lines 3 to 17 and insert:
("(b) any liability for pensions, or other benefits, entitlement to payment of which has arisen,
(c) any liability for—
(i) pensions or other benefits which have accrued, or
(ii) (in respect of members with less than two years pensionable service) the return of contributions,
(d) any liability for increases to pensions referred to in paragraphs (b) and (c);
and, for the purposes of subsection (2), the amounts of the liabilities mentioned in paragraphs (b) to (d) are to be taken to be the amounts calculated and verified in the prescribed manner.
(4) To the extent that any liabilities, as calculated in accordance with the rules of the scheme, have not been satisfied under subsection (2), any remaining assets of the scheme must then be applied towards satisfying those liabilities (as so calculated) in the order provided for in the rules of the scheme.
(4A) If the scheme confers power on any person other than the trustees or managers to apply the assets of the scheme in respect of pensions or other benefits (including increases in pensions), it cannot be exercised by that person but may be exercised instead by the trustees or managers.
(4B) If this section is not complied with—
(a) section (prohibition orders) applies to any trustee who has failed to take all such steps as are reasonable to secure compliance, and

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(b) section 9 applies to any trustee or manager who has failed to take all such steps.
(4C) Regulations may modify subsection (3).").

On Question, amendment agreed to.

[Amendments Nos. 157 to 159 not moved.]

Baroness Dean of Thornton-le-Fylde moved Amendment No. 160:


After Clause 65, insert the following new clause:

Dependants' pension for unmarried partner

(".—(1) Regulations shall provide that occupational pension schemes, whether constituted under statute or under trust, shall be required to introduce rules stating that, where no widow's or widower's pension is payable but the member has a partner for whom a valid nomination has been received, an equivalent pension shall be paid.
(2) Regulations shall further provide that every scheme shall notify members of this in the first annual report after the amendment has been made, and shall circulate a notice to all members and a nomination form.").

The noble Baroness said: My Lords, the main issues here were discussed in Committee. At that time the Minister said that the amendment as it was then worded took away the discretion of trustees to reach decisions in situations where a scheme member died or was killed. I challenge that point but we have tried to accept some of the reasoning by making clear in the amendment now before the House that we are referring to situations where no widow's or widower's pension is paid. The amendment now covers that situation.

Another point the Minister made in Committee was that if one has nominations they soon become out of date, people forget about them, and they are not relevant at the time the matter is considered by trustees. I do not accept that either. It is a major issue for a member of a pension fund to register with trustees a nominee to whom his benefit should be paid if he passes on or is killed.

On the previous occasion we discussed this matter the Minister expressed considerable concern that what we were dealing with was a public policy area that he wished to discuss with the Treasury. Of course the Pensions Bill does not give exclusions to public sector pension schemes as opposed to private sector pension schemes. It is correct to say that whereas in the private sector a member of a scheme who passes on will find his benefits—either reduced, or at the same level—are paid to the widow or widower, or to the nominated beneficiary, that is not the case in the public sector. We do not seek to hide the fact that this amendment will in future make the anomaly I have discussed not allowable under pension schemes.

At the moment members of the police force pay a not inconsiderable amount of money in the form of contributions into a scheme. In the Civil Service it is assumed that there is a contribution level of some 9 per cent. into a pension fund. This is not a benefit that the Government give to public sector workers: I suggest it is deferred pay. Therefore it is right that the individual beneficiary of a scheme should have the right to nominate rather than see his benefit go by default or, as is the case in some public sector schemes, go to an

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individual's brother, sister, or indeed his mother or father, but not to his or her permanent partner to whom he would want the benefit to be paid.

Nor indeed is it original to suggest that as regards the public policy area—I recollect the Minister implied this in Committee—a partner is not defined. Indeed the Administration of Justice Act 1982 made amendments to the Fatal Accidents Act 1976 under which, I gather, most claims for death in work are brought. That Act states:


    "In this Act 'dependant' means [any person who] was living with the deceased in the same household immediately before the date of the death; ... had been living in the same household ... was living during ... that period as the husband or wife of the deceased".

I believe that the amendment provides a fairer treatment of pension benefits, to which people have either paid or been assessed as having paid in their overall employment package. I beg to move.

Lord Mackay of Ardbrecknish: My Lords, the effect of this amendment would be to remove from individual pension schemes the freedom to decide their own rules regarding the payment of survivors' pensions.

We agree with the conclusion of the PLRC that there is no need for a general change in the law regarding the payment of benefits on death, and I cannot support this amendment.

As noble Lords are aware, employers set up occupational pension schemes voluntarily, usually under trust law. Widows and widowers of members of contracted-out pension schemes have a statutory entitlement to an occupational pension based on a proportion of the deceased member's guaranteed minimum pension or protected rights. In both the private and public sector any pension above this level or to other dependants will depend on the provisions made by the rules of a particular pension scheme. Some schemes already provide for other dependants of the deceased member to receive a pension. It should remain up to individual schemes, both in the private and public sector, to determine whether and in what circumstances a survivor's pension should be paid.

While we do not accept the amendment we are keen to encourage greater transparency and remove obstacles to the payment of survivors' benefits in particular types of case. We believe as a first step that scheme members should be fully aware of conditions relating to the payment of survivors' pensions. We intend to introduce a new requirement in regulations made under Clause 34 and Section 113 of the Pension Schemes Act which will require trustees to include these details in scheme booklets.

We have also accepted that in some cases the wording of trust deeds, particularly older deeds, can be unnecessarily restrictive when it comes to nominations for lump sum death benefits. We agree with the PLRC that schemes should consider amending their deeds where trustees' discretion on the payment of death benefits are restricted. The provisions of Clause 60(2) (a) will enable trustees to modify a scheme by resolution in order to extend the class of persons who may receive death benefits. This avoids the need for the intervention of a third party such as the courts or the authority.

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These changes go some way towards tackling the concerns which underlie this amendment, but they do so without restricting the freedom of schemes and sponsoring employers to decide their own rules in this area.

I do not know whether I have conceded enough to satisfy the noble Baroness, Lady Dean, but I hope that with that explanation she will agree that it would be wrong to press her amendment and force schemes to make the changes she wishes.

Baroness Dean of Thornton-le-Fylde: My Lords, I do not accept the Minister's point that trustees are in a better position to decide to whom the benefits of a deceased member of a fund will be paid. I should have thought that the individual member of a fund has every right to say whom they want to receive their benefit.

The Minister said that the rules of a particular scheme would determine who receives the benefit. I wonder to what extent that is a legitimate argument and to what extent it is concern about the possible impact on the public purse should the proposal I put forward be extended to public sector pension funds.

The Minister suggested that there will be greater explanation in regulations. While that will in no measure provide the coverage proposed in the amendment, it will be interesting to see how those regulations are worded and when the Government will make them. We must be up to 232 regulations under this Bill. I beg leave to withdraw the amendment.

Clause 66 [Discharge of liabilities by insurance, etc.]:


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