§ Mr. VazTo ask the Secretary of State for Social Security what is his policy regarding index-linking private pensions in the near future.
§ Miss WiddecombeContracted-out occupational pension schemes and appropriate personal pension schemes are already under a statutory obligation annually to increase guaranteed minimum pensions accruing in respect of contracted-out employment from 6 April 1988, or pensions or annuities deriving from protected rights, in line with increases in the retail prices index to a maximum of 3 per cent. Guaranteed minimum pensions in respect of contracted-out employments before 6 April 1988, and any excess over 3 per cent. thereafter, are indexed by the state earnings-related pension scheme in line with the retail prices index.
The Social Security Act 1990 includes a provision which will require occupational pension schemes to provide annual increases in the rate of salary-related pensions (other than guaranteed minimum pensions) accruing in respect of pensionable service from an appointed day. The increase will be linked to increases in the retail prices index to a maximum of 5 per cent. a year. In addition, schemes which have a surplus of assets over liabilities will he required to make comparable increases in respect of service before that day. No final decision has been made as to when this provision will come into effect.