§ Mr. HagueTo ask the Secretary of State for Social Security whether he sees any need to amend contracting-out arrangements for money purchase schemes following the European Court of Justice judgment in the case of Barber v. Guardian Royal Exchange.
§ Mrs. Gillian ShephardWhile there remain uncertainties about the legal implications of this judgment for occupational pension schemes, it is clear that there is a specific problem for contracted-out money purchase schemes (COMPS). This arises from the conflict between the European Court's ruling in the Barber case that such schemes must equalise the age at which pensions come into payment for men and women, and the current requirement that such schemes may contract out of the state pension scheme only if they pay protected rights to their members at the age of 60 for women and 65 for men. We have therefore today tabled in another place an amendment to the Social Security Bill to enable these schemes to pay pensions deriving from protected rights from the date on which the member attains an age not earlier than 60 and not later than 65. This will ensure that such schemes can continue to meet the legal requirements of contracting out while complying with the equal treatment requirements of the European Court of Justice judgment. The same conflict does not arise in the case of schemes based on final salary and therefore they will not be affected by the amendment.