Clause 6 (Hansard, 19 May 1986)

§ Mr. Major
I beg to move amendment No. 19, in page 8, line 21, leave out from 'effect' to end of line 24 and insert `to make amendments of the Social Security Pensions Act 1975 in relation to the contracting-out of schemes which provide money purchase benefits'.

§ Mr. Deputy Speaker
With this it will be convenient to take Government amendments Nos. 20 to 23, 26 to 28, 35 and 38.

§ Mr. Major
Amendment No. 19, with the extensive selection that follows it, appears at first glimpse rather daunting, but, in reality, it is not. The amendments simply make a number of drafting changes to clause 6 and schedule 2 so as to allow occupational pension schemes which provide money purchase and defined benefits to contract out by satisfying the money purchase conditions.
I am grateful to my hon. Friend the Member for Bristol. North-West (Mr. Stern) for raising in Committee the position of such schemes. I explained at that time that we had received representations from the pensions industry on the same subject and we recognise that there is a clear case for allowing such schemes to contract out either by providing guarenteed minimum pensions, as they would have to do now, or by satisfying the new money purchase conditions. I said then that many detailed drafing amendments would be needed to achieve that object. The amendments in front of us are clear evidence that that supposition was correct.
The amendments also have the virtue of meeting the point made by the hon. Member for Derby, South (Mrs. Beckett) that money purchase contracted-out schemes should not be exempt from section 40(1) of the Pensions Act. That section required that a contracted-out scheme is financed at least in part by the employer. I promised that we would consider what the hon. Lady said about that. When we did we found that it made good sense. I am grateful to the hon. Lady. I commend the amendment to the House.