HC Deb 23 May 2002 vol 386 c547W
Mr. Lloyd

To ask the Secretary of State for Work and Pensions if he will make a statement on the company practice of dishonouring final salary pension schemes. [58051]

Mr. McCartney

There has been a long-term decline in the coverage of final salary pension schemes, which has accelerated as a result of increased longevity and the recent fall in the stock markets. Many companies have had to consider the financial impact on their business of continuing to run a final salary scheme for all employees.

Employers should take a long-term view of pensions, rather than basing their decisions on short-term considerations. Where employers do change their pension schemes, we believe that they have a responsibility to make it absolutely clear what the implications are for employee pensions.

The Sandler review of the long-term retail savings market and Pickering review of pension regulation will report in the summer. The Inland Revenue is also reviewing the taxation of occupational pension schemes. We will issue proposals in the autumn, aimed at making pension provision more attractive for individuals and pension providers. This will build on the reforms that have been introduced since 1998. Pension Credit will ensure that it always pays to save. State second pension will benefit 14 million low and moderate earners, and four million carers and disabled people who will get a second pension for the first time. We have introduced pension forecasts to provide individuals with the right information to make an informed decision about their retirement. And the introduction of stakeholder pensions means that everyone now has access to low-charge, flexible pension provision.