HL Deb 12 July 1995 vol 565 cc1763-4

229 Clause 130, page 87, line 20, after 'rights' insert '(a)'.

230 Page 87, line 22, after 'which' insert '(i)'.

231 Page 87, line 22, at end insert: '(ii) satisfies such conditions as may be prescribed, and (b) at the end of the interim period, in such of the ways permitted by the following subsections as the rules of the scheme may specify." '.

232 Page 87, line 27, leave out '(1A)' and insert '(OA) (a)'.

233 After Clause 132, insert the following clause:

Extension of interim arrangements to occupational pension Schemes

'. Regulations made by the Secretary of State may provide that sections 130 to 132 shall have effect, subject to prescribed modifications, in relation to protected rights under an occupational pension scheme as they have effect in relation to protected rights under a personal pension scheme.'.

Lord Mackay of Ardbrecknish

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 229 to 233. This time I am happy to tell the House that I have no other amendments to speak to in this group.

This group of amendments deal with flexible annuities. Amendments Nos. 229 to 232 are about interim arrangements which will allow people to withdraw income from their personal pension fund before committing it to buying an annuity. They deal with situations where someone dies without leaving a widow or widower during the period when they are withdrawing income in this way or where a widow or widower dies. The Association of British Insurers has alerted us to the fact that the Bill does not deal adequately with these situations. We intend that the residual fund of protected rights should pass to the estate of the deceased. These amendments will provide the power to make regulations so that we can set these arrangements out in more detail.

The new clause inserted into the Bill by Amendment No. 233 builds on the arrangements in the Bill to permit income withdrawal from protected rights in a personal pension. These are the rights built up from contracted out national insurance contribution rebates. The purpose of the new clause is to pave the way for regulations which will allow members of contracted out money purchase occupational pension schemes to enjoy a similar facility at some point in the future.

There has been a wide welcome for flexible annuities. A number of people in the pensions world and elsewhere have asked why the arrangements do not also extend to money purchase occupational pension schemes. That point was made by the noble Lord, Lord Haskel, on 21st February. I explained then that there was a very different tax regime for occupational schemes but that we were prepared to consider ideas for introducing more flexibility. We have listened carefully to the debate. We recognise the strength of the argument for treating money purchase occupational schemes in a similar way to personal pensions. The Inland Revenue is even now working on this. Discussions on the detailed arrangements for money purchase occupational pension schemes are being held with the occupational pensions scheme joint working group. We shall then consult about the precise arrangements for dealing with protected rights. This will include when any new arrangements should start. So the powers in this new clause will allow us to bring forward regulations to extend flexible annuities to money purchase occupational schemes. I beg to move.

Moved, That the House do agree with the Commons in their Amendments Nos. 229 to 233.—(Lord Mackay of Ardbrecknish.)

On Question, Motion agreed to.