EXCESS CONTRIBUTIONS (Hansard, 14 July 1987)

HC Deb 14 July 1987 vol 119 c1050 1050

§ Question proposed, That the clause stand part of the Bill.

§ Mr. John Greenway
Will my right hon. Friend consider how life assurance and pension companies can meet the provisions of clause 29 for self-employed scheme members? I understand that it is intended that, where an employee is setting up a pension scheme, perhaps with the co-operation of an employer, there should be arrangements to ensure that the contributions paid are not excessive in relation to the employee's salary. However, unless I have read this wrongly, it seems to me that we are asking a pension scheme to include in its arrangements the means to ensure that contributions are not excessive. I am at a loss to understand how the Revenue expects the life assurance industry to police the provisions with regard to people who are self-employed. Perhaps this matter needs further thought.

§ Mr. Blair
On a similar point, I assume that the purpose of the clause is to determine what happens to excess contributions above the permitted maximum. Under the new personal pension schemes. the employer as well as the employee will be able to contribute. A novel situation therefore arises if the aggregate amount contributed by employer and employee exceeds the maximum. As II understand it, the purpose is to repay any excess to the employee up to the extent of his contributions and for the rest to be paid to the employer. I do not see how that affects the situation in relation to the maximum amount allowable, which seems to be governed by clause 32, but I should be grateful for confirmation that clause 29 merely determines what happens to excess contributions.

§ Mr. Norman Lamont
The hon. Member for Sedgefield (Mr. Blair) is right. Nevertheless, my hon. Friend the Member for Ryedale (Mr. Greenway) has hit upon a point which requires further investigation. It is the subject of consultation with the pensions industry and I will see whether anything more can he said on Report. The matter is being explored and my hon. Friend is right in saying that it is recognised as an area in which there may be problems.

§ Question put and agreed to.

§ Clause 29 ordered to stand part of the Bill.