Occupational Pension Schemes (Hansard, 24 October 1994)

§ 7. Mr. Peter Ainsworth
To ask the Secretary of State for Social Security whether he proposes to change the system of regulation for occupational pension schemes.

§ Mr. Arbuthnot
Yes. Our proposals are set out in the White Paper "Security, Equality, Choice: the Future for Pensions" and we have undertaken to bring forward legislation to implement them at the first available opportunity.

§ Mr. Ainsworth
I welcome my hon. Friend to his new responsibilities and also welcome his proposals, which will bring to millions of employees a sense of security about their retirement and encourage employers to continue to provide occupational pensions. Does my hon. Friend share my concern at proposals which would be detrimental to the interests of those on occupational pensions such as the proposals made by the so-called Commission on Social Justice?

§ Mr. Arbuthnot
I am grateful to my hon. Friend for his kind remarks. He is right to welcome our proposals in the White Paper. A recent survey by Alexander Clay and Partners showed that almost nine out of 10 companies welcomed our White Paper and the key proposals in it. They felt that we had struck the right balance between security of pensions for employees and keeping costs to the minimum for employers. As regards the Commission on Social Justice, I have not yet read its proposals in full and I need to study them with care. My initial reaction to what I have seen of them is one of disappointment as they might impose considerable costs on top of the national insurance contributions for which employers are already liable and which we opted out of the social chapter specifically to avoid. I should like to know what the Labour party thinks would be the costs of the proposals. Unless it faces up to that, it can never be taken as a serious party.

§ Mr. Rooney
Will the Minister confirm that in his world of a deregulated labour market with constant changes of employment and patterns of unemployment and part-time work, the only suitable pension for workers is the state earnings-related pension scheme?

§ Mr. Arbuthnot
The Government aim to maximise the choice and flexibility in the provision of pensions. We recognise that there is a definite need for additional pensions over and above the state retirement pension, but the state retirement pension will remain the sound foundation of our pensions policy.

§ Mr. Hawkins
I join in welcoming my hon. Friend to the Front Bench. I also welcome the Government's proposals for member-nominated trustees of occupational pension schemes. Does my hon. Friend agree that 620 member-nominated trustees with time off for training and information for members will greatly safeguard the interests of members of occupational pension schemes?

§ Mr. Arbuthnot
Yes, I agree. It is right that members of schemes should have the right to nominate a third of the trustees as that will give them a say in the running and safeguarding of the assets of their pension fund. As my hon. Friend says, training is vital. That is why we intend to make employers give employee trustees paid time off. We do not think that it is right to prescribe that for all trustees, but we believe that it is extremely important.