§ Mr. BrowneTo ask the Secretary of State for Social Security if he will assess the benefits of introducing a pension fund safety net, similar to the Redundancy Payments Fund, to protect the pensions of employees whose pensions have been affected detrimentally by the insolvency of their employer. [150700]
§ Mr. RookerThe consultation exercise on the paper "Security for Occupational Pensions" closed on 31 January. This consultation document sought views on a range of approaches to providing protection for pension scheme members' rights, including options such as a central discontinuance fund, compulsory scheme insurance as well as other possible measures. We are giving careful consideration to the responses received and will then decide on the best way forward.
§ Mr. BrowneTo ask the Secretary of State for Social Security what provisions are in place to protect employees whose pensions have been affected detrimentally by the insolvency of their employer. [150919]
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§ Mr. RookerThe Pensions Act 1995 brought in a number of measures to promote security for members of pension schemes, including the Minimum Funding Requirement which requires defined benefit schemes to hold a minimum level of assets to meet their liabilities.
In the event of a sponsoring employer's insolvency, the legislation requires that an independent trustee must be appointed. The role of the independent trustee is to ensure that the interests of the members are represented in insolvency proceedings and to make any necessary decisions about winding up the scheme. If on wind up the scheme is not fully funded on a Minimum Funding Requirement basis, the amount outstanding becomes a debt on the employer and the trustee must pursue recovery of this amount. Where the scheme finds itself in deficit due to fraud, compensation may be payable under the Pensions Compensation Scheme. Unpaid employer and employee contributions may be payable from the National Insurance fund through the Department of Trade and Industry's Redundancy Payments Service.
§ Mr. BrowneTo ask the Secretary of State for Social Security what plans he has to extend the powers of OPRA, or other relevant regulators, to require them to ensure the timeous winding up of company pension funds when the employer has become insolvent. [150697]
§ Mr. RookerWe have extended and strengthened OPRA' s powers with regard to schemes that have started to wind-up (including cases where the sponsoring employer is insolvent). There are a number of provisions in the Child Support, Pensions and Social Security Act 2000, under which draft regulations will be issued later this year to come into effect in April 2002.
§ Mr. BrowneTo ask the Secretary of State for Social Security if he will review the performance of companies who manage company pension schemes; and if he will publish the results. [150699]
§ Mr. RookerWe have no plans to review the performance of companies that sponsor pension schemes. The performance of companies in general is a matter for their shareholders.
Under the provisions of the Pensions Act 1995, pension schemes are required to have a schedule setting out the levels of contributions and the times when contributions should be paid. Companies are required to pay contributions in accordance with these schedules. If an employer fails to comply with the schedule this must be notified to the Occupational Pensions Regulatory Authority (OPRA) who can, in certain circumstances, apply sanctions. If an employer fails to pay employee contributions within a set time OPRA can apply a civil or even criminal sanction on the employer.