§ Lord Oakeshott of Seagrove Bayasked Her Majesty's Government:
Why they expect the Chatsworth Settlement Estate Pension Scheme to be exempt from payment of the initial levy and the pension protection levies to the proposed pension protection fund. [HL2882]
§ Baroness Hollis of HeighamThe pension protection fund will protect members of eligible defined benefit and hybrid pension schemes who may otherwise lose some or all of their pension entitlement should their sponsoring employer become insolvent. Those schemes eligible for PPF assistance will be liable to pay the pension protection levies.
However, we expect that those schemes which will be exempt from the new scheme funding requirements will not be eligible for assistance from the PPF. Broadly speaking this is because the existing framework for these schemes already provides a high level of security.
In the main, those schemes which will be exempted from the new scheme funding requirements will be those schemes currently exempt from the minimum funding requirement (MFR). We will check that it remains appropriate to exempt them before the relevant regulations are made. The Chatsworth Settlement Estate Pension Scheme is exempt from the MFR because the structure of the trust means that pension beneficiaries would be able to call on the entire assets of the trust, where necessary, to fund their pensions. This provides a higher level of security than the MFR.
§ Lord Lester of Herne Hillasked Her Majesty's Government:
What would be the total annual financial cost if the Civil Partnership Bill were amended so as to backdate to 1988 (the date applicable to surviving widowers) survivor pension benefits for civil partners in private sector schemes; and what is the basis of each element in that calculation. [HL2925]
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§ Baroness Hollis of HeighamThe annual costs of providing survivors benefits for civil partners in respect of future service of scheme members in private sector pension schemes are provided in the final regulatory impact assessment (RIA) to the Civil Partnership Bill, published on 31 March 2004. These costs were assessed on two separate assumptions as to future take up of civil partnerships, as set out in Annex A of the RIA and are shown in the table below.
The table also shows the additional one-off costs if service for such pensions accrued from April 1988 or the date the member joined the scheme, if later. The benefits costed are those which would be required to be paid by contracted-out defined benefit schemes. It is assumed there would be no additional cost for private sector defined contribution schemes.
Costs of extending survivor benefits to civil partners in contracted-out defined benefit private pension schemes Annual cost of benefits accruing from commencement of the Civil Partnership Bill One-off costs if benefits accrued from 1988 Annual cost increase as % of contributions Annual increase £m pa £m High take-up 0.016% £2.5m £20 Low take-up 0.008% £ 1.25m £40 Notes:
1. Data from the 2000 Government Actuary's Department survey of occupational pension schemes suggest that it would be reasonable to assume that ¾ of private sector defined benefit schemes already offer benefits to same-sex couples, albeit at the trustees' discretion. Using this assumption, the annual costs for future accrual are based on the additional contributions that would need to be paid.
2. Under the high take-up scenario, the Government Actuary's Department assumes that, by 2050, 6 per cent of the lesbian, gay and bisexual population aged around 70 who are retired with occupational pensions will be in civil partnerships (the proportions around age 70 being a key driver in determining the cost of benefits to spouses/partners on death). This figure is broadly consistent with the assumption that, overall, around 3.3 per cent of the lesbian, gay and bisexual population aged 16 and over will be in civil partnerships, as compared to around 33 per cent of the heterosexual population aged 16 and over who would be married.
3. Further information on the assumptions for the take-up of civil partnerships are included in Annex A of the regulatory impact assessment published with the Civil Partnership Bill.
§ Lord Oakeshott of Seagrove Bayasked Her Majesty's Government:
What proportion, on average, of the benefits provided to each individual by the proposed pension protection fund they expect the £400 million assistance scheme announced on 14 May will provide. [HL2950]
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§ Baroness Hollis of HeighamThe level of assistance that can be provided will be determined in due course. It will depend on a number of factors:
- the final size of the fund—the level of any industry contribution will affect this;
- the method of providing assistance—we are examining the various options;
- the number of people affected—we are finalising our estimates of this and will publish them in June.
We expect to provide a significant level of help, although it is unrealistic to expect the assistance to be set as high as the future pension protection fund levels, as in future members will benefit from cover paid for by a premium.
§ Lord Lester of Herne Hillasked Her Majesty's Government:
Whether surviving spouses of marriages entered into between now and the coming into force of the Civil Partnership Act will be entitled to backdate survivor pension benefits in public service schemes to 1988; and, if so, what is their estimate of the total. increased annual financial cost of such backdating, calculated by reference to each 10,000 such new marriages. [HL2927]
§ The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)Surviving spouses of marriages entered into between now and the coming into force of the Civil Partnership Act will be entitled to spouse's benefits from public service schemes at least back to 5 April 1988 at the level required for contracting out of the state scheme. Prior to 1988 contracting-out required survivor pensions only for widows of male scheme members and the requirement for widower pensions was not made retrospective. The provision for survivors of marriage is already taken into account in the costing of these schemes. 'The estimates requested do not exist and could only be obtained at disproportionate cost.