§ Bob SpinkTo ask the Secretary of State for Work and Pensions what protection is afforded to workers 1605W who have lost their pension rights after their employer became insolvent under clause 8 of the EU Insolvency Directive. [153930]
§ Malcolm WicksAs has been confirmed by the European Commission, we fully meet our obligations under Article 8 of the Insolvency Directive, as successive Governments have done since the Directive was adopted in 1980.
Under the Employment Rights Act 1996 and the Pensions Scheme Act 1993, the Redundancy Payments Directorate, on behalf of the Secretary of State for Trade and Industry, makes insolvency payments from the National Insurance Fund (NIF) to qualifying former employees. The amounts payable from the NIF are subject to statutory upper limits. In addition, the Pensions Act 1995 requires salary-related schemes to meet the Minimum Funding Requirement (MFR), and provides for a statutory priority order for the distribution of a scheme's assets if a scheme that is required to meet the MFR winds up.
§ Bob SpinkTo ask the Secretary of State for Work and Pensions what obligations are placed on actuaries or trustees who are winding-up pension schemes to pay the guaranteed minimum pension. [153787]
§ Malcolm WicksWhere a scheme is winding up the trustees will need to realise the assets of the scheme, pay its outstanding debts and expenses and take steps to secure the benefits of scheme members—including members' Guaranteed Minimum Pensions (GMPs).
The assets must be applied in the order set out in scheme rules, or where the scheme is salary-related and subject to the Minimum Funding Requirement, in accordance with the statutory priority order in Section 73 of the Pensions Act 1995. After meeting scheme expenses and debts to third parties, the current (transitional) priority order is Additional Voluntary Contributions, then pensions in payment, followed by accrued contracted-out rights (including GMP), pension increases and finally non-contracted out rights.
If there are insufficient assets to satisfy all of the liabilities in a particular category of the priority order then the liabilities in that category must be satisfied proportionately.
§ Mr. WebbTo ask the Secretary of State for Work and Pensions if he will estimate public expenditure on the state second pension in each year from 2006–07 to 2015–16 based on(a) present policies and (b) no new state second pension entitlement being accrued in respect of contributions made from 2005–06 onwards. [154870]
§ Malcolm WicksThe information requested is set out in the following table.
1606W
Projected expenditure on the state second pension based on (a) current policies and (b) if accurals were to cease from Aprill 2005 onwards—£billion,2004–04 price terms (a) (b) 2006–07 0.3 0.2 2007–08 0.4 0.3 2008–09 0.6 0.4 2009–10 0.8 0.5 2010–11 1.0 0.6 2011–12 1.2 0.7
Projected expenditure on the state second pension based on (a) current policies and (b) if accurals were to cease from April 2005 onwards—£billion, 2003–04 price terms (a) (b) 2012–13 1.4 0.8 2013–14 1.7 0.8 2014–15 1.9 0.9 2015–16 2.2 1.0 Notes:
1. The projected expenditure to pensioners shown above does not allow for (i) expenditure on state second pension paid alongside bereavement benefits to those below state pension age, (ii) expenditure on contracted-out rebates, or (iii) any effects on income-related benefit expenditure of the various policies considered.
2. The projected expenditure has been calculated on a consistent basis to that used for the projections in the Quinquennial Review of the National Insurance Fund as at April 2000 (Cm 6008), assuming real earnings growth of 2 per cent. a year. No allowance has been made for the effects of the most recent (2002-based) population projections, or any other information which has become available since the results underlying the Quinquennial Review were prepared.
3. The projected expenditure relates to the GB National Insurance Fund (Northern Ireland has a separate Fund).