§ Mr. Don FosterTo ask the Secretary of State for Social Security if he will detail measures taken by the Government to comply with European Council directive—EEC 80/987; and if he will make a statement.
§ Miss WiddecombeMost of the provisions of this directive concern employment protection measures on employer insolvency which is a matter for my right hon. Friend the Secretary of State for Employment.
In so far as social security contributions to the state scheme are concerned, the national insurance system guarantees benefits from the national insurance fund according to the type and level of contributions paid into it. If, for any reason, including the insolvency of the employer, an employer fails to make a class 1 contribution, or pays it late, that contribution will be deemed paid under the Social Security (Contributions) Regulations 1979 unless the employee has been negligent or in some way connived with the employer in the failure to pay.
In so far as occupational pensions are concerned, United Kingdom law satifies the requirements of the directive by a range of measures.
The Employment Protection (Consolidation) Act 1978 makes the Secretary of State liable to pay contributions due from an insolvent employer to an occupational pension scheme. The relevant contributions include, subject to certain limits, both employees' contributions deducted by the employer from the employees' pay and arrears of contributions due from the employer.
In addition, funds are protected from the creditors of the employer in the events of his insolvency by virtue of being set up as irrevocable trusts independent of the employer. The funds set aside for paying pensions are transferred out of the ownership of the employer and into the ownership of the trustees of the pension scheme. The law places the trustees under a strict obligation to act prudently and in the interest of the beneficiaries.