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Lord Lucas moved Amendment No. 213:


Page 127, line 17, at end insert:
("( ) in paragraph 4(3), for the words from "does not cease" to the end there is substituted "which, apart from the regulations, would not be contracted-out employment is treated as contracted-out employment where any benefits provided under the scheme are attributable to a period when the scheme was contracted-out".").

The noble Lord said: My Lords, I beg to move Amendment No. 213. Paragraph 4(3) of Schedule 2 to the Pension Schemes Act 1993 allows an individual to remain contracted out on those occasions where temporarily his service does not qualify him for a guaranteed minimum pension. An example of this would be a period of unpaid maternity leave where national insurance contributions would not be payable for that period. Consequently, contracted-out benefits would not accrue. The amendment extends this provision to service after the principal appointed day.

On Question, amendment agreed to.

10.30 p.m.

Lord Lucas moved Amendment No. 214:


Page 127, line 26, leave out paragraph 60.

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 181. I beg to move.

On Question, amendment agreed to.

Clause 135 [Breach of regulations under the Pension Schemes Act 1993]:

Lord Lucas moved Amendments Nos. 215 to 217:


Page 87, line 36, at end insert:
("(4A) Where—
(a) apart from this subsection, a penalty under subsection (4) is recoverable from a body corporate or Scottish partnership by reason of any act or omission of the body or partnership as a trustee of a trust scheme, and
(b) the act or omission was done with the consent or connivance of, or is attributable to any neglect on the part of, any persons mentioned in subsection (4B),
such a penalty is recoverable from each of those persons who consented to or connived in the act or omission or to whose neglect the act or omission was attributable.
(4B) The persons referred to in subsection (4A) (b)—
(a) in relation to a body corporate, are—
(i) any director, manager, secretary, or other similar officer of the body, or a person purporting to act in any such capacity, and
(ii) where the affairs of a body corporate are managed by its members, any member in connection with his functions of management, and
(b) in relation to a Scottish partnership, are the partners.
(4C) Where the Regulatory Authority requires any person to pay a penalty by virtue of subsection (4A), they may not also require the body corporate, or Scottish partnership, in question to pay a penalty in respect of the same act or omission.").

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Page 87, line 39, at end insert:
("( ) Where by reason of the contravention of any provision contained in regulations made, or having effect as if made, under this Act—
(a) a person is convicted of an offence under this Act, or
(b) a person pays a penalty under subsection (4),
then, in respect of that contravention, he shall not, in a case within paragraph (a), be liable to pay such a penalty or, in a case within paragraph (b), be convicted of such an offence.").
Page 87, line 41, at end insert ("and "Scottish partnership" means a partnership constituted under the law of Scotland.").

The noble Lord said: My Lords, I spoke to Amendment No. 215 with Amendment No. 19, to Amendment No. 216 with Amendment No. 177 and to Amendment No. 217 with Amendment No. 19. I beg to move these amendments en bloc.

On Question, amendments agreed to.

Lord Lucas moved Amendment No. 218:


Page 88, line 12, at end insert:
("( ) In section 186 of that Act (Parliamentary control of orders and regulations), in subsection (3), after paragraph (c) there is inserted "or
(d) regulations made by virtue of section 168(2)".").

The noble Lord said: My Lords, in moving this amendment I shall speak at the same time to Amendment No. 229.

These amendments ensure that regulations made under the provisions of the Pension Schemes Act 1993 and under Part I of the Pensions Bill that provide for a breach of duty to be a criminal offence by virtue of Clauses 135 and 105 respectively must be subject to the affirmative procedure. These amendments take account of the concerns expressed by the Select Committee on the Scrutiny of Delegated Powers and concerns voiced in this House during Committee stage by the noble Baronesses, Lady Hollis and Lady Seear, and the noble and learned Lord, Lord Simon of Glaisdale, about the provisions that allow criminal offences to be created in secondary legislation.

In introducing these amendments we have balanced, I hope to the House's satisfaction, the need to have the flexibility to create criminal offences in regulations with the need to ensure that Parliament is able to give proper consideration to any that are created in this way.

It should be noted that the regulations made under the provisions of the Pension Schemes Act 1993 that already contain criminal penalties for failure to comply have been included under these amendments. I beg to move.

Baroness Seear: My Lords, I should like briefly to say that we appreciate the fact that the Government have taken note of the representations that have been made and we are glad to accept the amendment.

On Question, amendment agreed to.

Clause 137 [Jurisdiction of Pensions Ombudsman]:

The Earl of Buckinghamshire moved Amendment No. 219:


Page 90, line 15, after ("proceedings),") insert ("after subsection (4) there is inserted—

14 Mar 1995 : Column 835


"(4A) On any application to the court by any party to an investigation or by the Pensions Ombudsman the court may order that the case be transferred to the court if it is a case which the court considers is more fit to be adjudicated on by the court)."; and").

The noble Earl said: My Lords, this amendment surrounds the role of the pensions ombudsman and the interaction with the courts. There are certain disputes which can be satisfactorily resolved by the ombudsman process and others, involving potentially complex issues and large sums of money, that would normally be better dealt with by the courts. The issue is made more acute by the extension of the ombudsman's jurisdiction, both under the Bill and as a result of the current ombudsman's recent policy decision not to rule out consideration of cases concerning the disposal of scheme surplus, the exercise of trustees' discretion or the validity of actuarial calculations, especially as to transfer values.

In its 1989 report, Protecting Pensions: Safeguarding Benefits in a Changing Environment, the Occupational Pensions Board recommended the establishment of a pension tribunal to deal with not only individual grievances but also disputes between different trustee bodies and disputes between trustee bodies and other organisations. In the event, a pensions ombudsman dealing only with individual grievances was set up with subsequent recourse to the courts restricted to points of law. The jurisdiction of the ombudsman has now been extended to that which the Occupational Pensions Board originally envisaged for a pensions tribunal.

This amendment would allow the ombudsman to continue as an inexpensive and informal one-stop forum for addressing straightforward individual grievances but open up recourse to the courts where more complex issues are involved. It would avoid the cost associated with a pension tribunal, to which my noble friend may well object. I beg to move.

Lord Mackay of Ardbrecknish: My Lords, this amendment seeks to allow either party involved in an investigation by the pensions ombudsman to approach the court to seek the transfer of the case from the ombudsman to the court.

The office of pensions ombudsman was created in 1990 to provide a low cost, efficient and effective alternative to the courts for the resolution of disputes and disagreements. It has provided individual scheme members with a route by which their concerns may be addressed without the need for expensive and time-consuming litigation. Building on the PLRC's recommendations, we announced in the White Paper that the ombudsman's jurisdiction would be extended to include disputes between trustees and employers; and between trustees of different schemes. The Bill makes provision for this.

Disagreements between trustees and employers and between trustees of different schemes can often result in lengthy and costly litigation. We believe it sensible that, as an alternative to action in the courts, the ombudsman should be given the power to consider such cases. This

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will offer schemes the opportunity, which their members already enjoy, to have disputes resolved effectively and speedily, without the costs associated with litigation.

We think it right that the expertise and experience which the pensions ombudsman has clearly demonstrated, and which was recognised by the Pension Law Review Committee, should now be available for the resolution of a wider range of pension disputes.

The current arrangements allow for considerable flexibility which will not be affected by the change in jurisdiction that we propose. They provide a number of routes by which cases can be handled by the courts if that is more appropriate. First, it is open to trustees of a pension scheme to apply to the court for directions if they wish to seek guidance on the appropriate course of action on a particular issue. They may do this at any time, whether or not a case is already before the pensions ombudsman.

Secondly, the pensions ombudsman considers each case for investigation on its merits and has discretion as to whether or not to accept a case. If the matter is one which he feels is more appropriate for the courts, he may decline to conduct an investigation. He may also, if he wishes, refer cases to the courts to determine questions of law. If court proceedings have already begun before the case is referred to him, he is precluded from conducting an investigation.

Thirdly, should the ombudsman accept a case for investigation, either party to the dispute retains the right to go to court at any time if they feel it appropriate. And the court would handle the case unless the other party to the dispute makes an application to the court to "stay" the proceedings—that is, asks the court to take no action until the ombudsman has completed his investigation.

If such an application is made the court is required, under Section 148 of the Pension Schemes Act 1993, to consider whether there is sufficient reason why the ombudsman should not handle the case. The court will, effectively, be considering whether the matter in dispute is one which it is appropriate for the ombudsman to consider. That, I think, goes to the heart of my noble friend's concern.

We believe that the provisions already in place are sufficiently flexible to allow cases to be considered by the most appropriate body, be that the courts or the ombudsman. As things stand, it is for the courts to decide matters of appropriate jurisdiction and that, I believe, is what my noble friend is hoping to achieve.

We accept that it may not be appropriate for the ombudsman to investigate all referrals made to him. Indeed, we intend that certain matters should be specifically excluded from the ombudsman's jurisdiction and be the sole responsibility of OPRA. These are matters where the authority's enforcement powers are more likely to be effective in securing compliance with the legislation than the ombudsman, whose role is one of adjudicator rather than regulator; for example, cases involving payment from surplus to an employer, failure to meet the minimum solvency requirement, failure to comply with audit requirements, and procedures for the appointment of member nominated trustees and the scheme actuary.

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I hope that I have reassured my noble friend that the current arrangements and our proposals for the future are sufficiently flexible to meet his concerns. As I have explained, both the existing arrangements and the proposed future arrangements allow full access to the courts where appropriate. On the basis of that explanation I hope that my noble friend will feel able to withdraw his amendment.


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