HC Deb 21 November 1995 vol 267 cc48-9W
Mr. Matthew Banks

To ask the Chancellor of the Exchequer what action public service pension schemes have taken to ensure that where redress is due under the Securities and Investments Board's pensions review, employees can be reinstated at reasonable cost. [1655]

Mrs. Angela Knight

I am pleased to announce that, on advice from the Government Actuary, the Government have now agreed the charges for reinstating the pensions entitlement of current public service employees who opted out of a public service pension scheme as a result of mis-selling. These charges are paid to the schemes concerned by the individuals or firms responsible for mis-selling.

The charge for buying pension rights in respect of the period since the individual opted out of the public service scheme will be derived from the usual actuarially determined inward transfer value factors. These factors have recently been reviewed by the Government Actuary, and revised downwards.

Where, in addition, a transfer payment was made for earlier pensionable service, the charge for reinstating pension rights for that service will normally take the form of repayment, with appropriate interest, of the outward transfer value—the payment made by the public service pension scheme to the personal pension provider when the individual transferred to the personal pension scheme.

The Government Departments responsible for public service schemes are taking action to bring these changes into effect.

I welcome their action. It is an important step towards ensuring that those who have suffered loss as a result of mis-selling are restored to a financial position equivalent to what it would have been the case if mis-selling had not occurred. This is being done in a way that is fair to other scheme members, ensures that those responsible provide the right redress and is fair to the taxpayer.

I urge all occupational pension schemes in the private sector to follow the example of public service schemes by allowing current employees to rejoin for future service and also to buy back pension rights for previous service at reasonable cost.