SUPERANNUATION OF EMPLOYEES OF STATUTORY WATER UNDERTAKERS

HC Deb 17 July 1973 vol 860 cc437-40

Lords Amendment: No. 77, after Clause 24, in page 31, line 9, at end insert new Clause B:—

B.—(1) Statutory water undertakers may establish and administer pension schemes and pension funds in the interests of persons who are or have been employed by them, and may pay pensions, allowances and gratuities to or in respect of such persons or enter into and carry into effect agreements or arrangements with any other person for securing or preserving pension rights for any such persons.

(2) It shall he the duty of all statutory water companies, by participating in a scheme for or in respect of persons who are or have been employed by any such company, to secure benefits in respect of their service after their entry into the scheme not less in amount than the corresponding benefits for employees and former employees of water authorities in the standard water authority scheme and on terms (including terms as to the transferability of benefits) not less favourable to the persons entitled to the benefits than the terms of that scheme; and in this section "standard water company scheme" means a scheme under this subsection and "standard water authority scheme" means a scheme designated by an order under subsection (3) below.

(3) The Secretary of State may by order—

1. (a) designate any scheme made for or in respect of employees and former employees of water authorities (including in particular a scheme contained in regulations under section 7 of the Superannuation Act 1972) as the standard water authority scheme;
2. (b) designate a corporation to manage the standard water company scheme; and
3. (c) prescribe a date before which any person who is in the employment of a statutory water company on 31st March 1974 and intends to remain in the employment of such a company after that date, and for whom on that date superannuation arrangements will be in operation, may opt that the standard water company scheme shall not apply to him.

(4) A person who has exercised the option conferred by subsection (3)(c) above may revoke it at any time after 31st March 1974.

(5) Every employee of a statutory water company who is eligible for membership of the standard water company scheme shall be a member of that scheme unless he has exercised the option conferred by subsection (3)(c) above and has not revoked it.

(6) Any question whether the terms of the standard water company scheme are less favourable than the terms of the standard water authority scheme shall be determined by the Secretary of State.

(7) The powers conferred on statutory water undertakers by this section are without prejudice to any of their other powers.

Mr. Graham Page

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker

With this amendment we can discuss Lords Amendment No. 116, in page 51, line 4, leave out paragraph 13.

Mr. Page

The clause deals with the complicated but vital subject of superannuation. It gives water authorities and statutory water undertakers a comprehensive duty to make arrangements for the superannuation of their employees. This is in substitution for the present paragraph 13 in Schedule 3 to the Bill which Amendment No. 116 will in consequence delete. The clause also makes provision for the establishment of a water company superannuation scheme with terms which are not less favourable than those of the water authority scheme.

We entered into deep consultations with all those concerned before introducing the new clause. After this full and careful consideration it has been decided that the local government superannuation scheme shall apply to the employees of the water authorities and to those of the National Water Council. The scheme will be governed by the regulations in Section 7 of the Superannuation Act 1972 and my Department is circulating the regulations for comment. They will be made as soon as possible so as to come into operation by 1st April 1974.

This will ensure that the superannuation arrangements are fully operative on that date and that the water industry has the freedom of investment management associated with the relatively large fund which will then be in existence. We have had advice from the body representing the municipal treasurers and accountants, from the Institute of Water Engineers and from the British Waterworks Association. They made the point that mobility of staff throughout the industry would be greatly facilitated if appropriate superannuation arrangements could be made for the staff of the companies. NALGO made the same point. It expressed its concern at the lack of full transfer pension rights between the water companies and the water authorities as things stand.

My Department approached the Water Companies Association on the subject and the association agreed to commission consultants. After further consideration it has been decided to set up a central superannuation fund for the employees of water companies, and the association has agreed that this should incorporate terms which are not less favourable than those applying to employees of water authorities, thus permitting full transferability of superannuation rights and full mobility of staff between water companies and water authorities.

As water authority employees will be within the local government superannuation scheme, this will mean that the terms applying to company employees will be not less favourable than those of the local government scheme. We shall therefore achieve mobility between authorities and the companies and full protection for employees under the terms of the local government superannuation scheme. Subsection (2) places a duty on all statutory water companies to parti- cipate in a scheme of the kind I have described which is referred to—and I think that the phrase will become familiar in due course—as the "standard water company scheme."

The new clause then goes on to make provisions about how that scheme will come into operation and will operate. It is an important clause. It was essential that we should settle these points about superannuation for the staff, and by means of consultation with all those concerned I think that we have made the right provision.

Question put and agreed to.