Pension Funds (Self-investment) (Hansard, 3 May 1991)

§ Mr. Newton

Because of the possible double jeopardy to job and pension that can be caused by a pension scheme investing in a related employer, broad powers were taken in the Social Security Act 1990 to restrict the practice. Messrs. Ernst and Young were asked to report on the overall extent of self-investment and any implications there might be in imposing restrictions. A copy of their report, "Study of Self Investment by Pension Fund", is being published and I have arranged for a copy to be placed in the Library.

Draft regulations have been referred for consideration by the Occupational Pensions Board. We propose that the overall proportion of a scheme's resources that may be self-invested should be limited to 5 per cent. Schemes that are currently above the limit will be required to take steps to reduce their level of self-investment, but only in respect of certain types of investments. A period of two years will be allowed for loans and equities listed on the stock exchange, and five years for equities traded on the unlisted securities market.

Most small self-administered schemes and individual insured schemes will be exempted from the regulations where written agreement by all the members is provided to each act of self-investment. Where schemes currently have holdings of property or equity in private companies, they will not be required to take action to disinvest. In such circumstances no further self-investment may be made.

	Level at which housing benefit ceases	Level at which community charge benefit ceases
	Gross earnings £ per week	Total net income £ per week	Gross earnings £ per week	Total net income £ per week
Single householder	87	77.02	76	74.64
Married couple	118	107.49	146	123.05
Married couple with two children aged 4 and 6	105	147.89	169	158.05
Lone parent with one child aged 3	91	131.76	62	128.37