§ Ms. WalleyI beg to move amendment No. 48, in page 26, line 19, at end insert:
'The scheme of transfer under section (2) of this Act shall contain provisions for the setting up of mirror image pension schemes identical in all ways to any scheme operated by or funded in whole or in part by that authority. The amount being transferred in bulk from one scheme to another is to be the amount held in respect of each member's accrued pension benefits, allowing for expected future pay increases. Any existing accrued benefit in the scheme prior to transfer must be retained in the new scheme for the lifetime of that scheme. Bulk transfers without consent should be conditional upon the actuary to the transferring scheme supplying a certificate of broad equivalence. Pensionable service shall be regarded as not having terminated in any change of scheme.'.As it is very late, and as the House has further business to dispose of, I shall be brief.It is always easy to be wise after the event. I should like to draw to the Minister's attention the situation that arose from previous privatisations and the concern that was expressed about pension rights.
The Minister said in Committee that all the rights and liabilities of the authority and of the employees would be transferred and would continue after privatisation. He also said that that would not need to be spelt out specifically in the Bill. Our amendment seeks the assurance that the principle of safeguarding pension rights will be adhered to; it is important to obtain that assurance from the Minister.
Current good practice, outlined by the Department of Social Security'in "Protecting Pensions", must be endorsed by the Minister. There must be a Government commitment for the purposes of the Ports Bill. That is the intention of amendment No. 48. In principle, the amount evaluated for the past service reserve should be the sum that the trustees of any necessary identical scheme require to cover the cost of setting up, for the members concerned, pension credits for past pensionable service equal to each member's past pensionable service benefits in the paying scheme, allowing for rights and expectations based on eventual pay.
Any existing surplus funds in a pension scheme should be used solely for pensions to the workers. It is important that they should not be seen as a spare asset base to induce privatisation; nor should they be used by a port authority before transfer to the company.
I should welcome the Minister's reassurance that a watertight provision in any transfer will effectively be included in the Bill.
§ Mr. McLoughlinI accept that the amendment is well intentioned, but it is unnecessary. As some hon. Members will be aware. the transfer of undertakings regulations do not apply to occupational pension schemes. The rights and liabilities of the port authority in relation to pension schemes would, however, be transferred to the successor company, along with other rights and liabilities, by virtue of clause 2(2) of the Bill. This would include, for example, any liability of the company to its employees or to the trustees of a pension scheme to make contributions to the scheme, and in any case where a pension was payable by the port authority itself out of revenue, as distinct from payment out of a funded pension scheme, the transfer of liabilities to the company under clause 2(2) would include a transfer of liability to pay the pension.
In short, after the transfer date, employees would have the same rights in relation to pensions against the successor company and any pension scheme as they have against the port authority and any pension scheme immediately before the transfer date. There will be no need to set up new pension schemes or to provide for bulk transfer from old schemes to new schemes. That sort of thing may happen where a predecessor undertaking is split up into two or more undertakings, but it is quite unnecessary in cases where the whole of an undertaking and its employees are transferred from one predecessor body to one successor body.
I understand the hon. Lady's concern. We have, however, dealt in the Bill with the difficulty over Tilbury. I can therefore reassure her that there is no need to pursue the amendment.
§ Ms. WalleyI have listened carefully to the Minister and I note his reassurance. I must, however, reiterate how important this issue was in previous legislation. It remains an important issue. If such a provision is not to be written on to the face of the Bill, we shall have to make sure that the Minister honours the commitment that he has just given the House on this most important issue of pensions. I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.