HC Deb 09 July 2001 vol 371 cc371-3W
Mr. Willetts

To ask the Secretary of State for Work and Pensions if life insurance cover may be included in the minimum contribution level needed for a group personal pension to be accepted as an alternative to a stakeholder pension. [367]

Mr. McCartney

Yes, but the proportion of the minimum 3 per cent. contribution level that can be used for insurance premiums to provide death benefits depends on when the arrangement was set up.

If the arrangement for paying premiums via the personal pension was set up before 6 April 2001, a maximum of 5 per cent, of the employee's net relevant earnings can still be used towards the term assurance contract.

But where the arrangements commenced on or after 6 April 2001, the maximum that can be paid as a premium is 10 per cent. of the pension contribution. Thus if the only pension contribution is the employer's 3 per cent., the maximum that can be used as a premium is 10 per cent. of the 3 per cent.

Mr. Willetts

To ask the Secretary of State for Work and Pensions what research his Department is undertaking to assess the income levels of people who invest in stakeholder pensions. [375]

Mr. McCartney

As part of a wide-ranging evaluation of the impact of stakeholder pensions the Department is undertaking a programme of dedicated research and analyses of administrative and statistical information. Details of individuals' incomes have been, or will be, collected in all research among individuals undertaken by, or on behalf of, the Department in connection with the evaluation of stakeholder pensions. Questions on stakeholder pensions will, for example, be included in the Office for National Statistics (ONS's) General Household Survey and in the Department's Family Resources Survey.

Mr. Willetts

To ask the Secretary of State for Work and Pensions what discussions are taking place between the Government and Opra to ensure there is a clear set of guidelines by which to determine which companies are fined for breaking the new stakeholder rules; and if small firms will be offered more leeway than larger firms when the rules have been broken. [365]

Mr. McCartney

From 8 October employers who are not exempt will be required to provide their employees with access to a stakeholder pension. The new requirements on employers are not onerous; but for many this will be their first involvement with pensions.

The Occupational Pensions Regulatory Authority (Opra) is an independent regulator. Their priority is to get employers to comply with the new arrangements. A key part of this process is to continue to educate employers about the requirements of the new arrangements.

Where an employer is reported to Opra for a breach of the rules, a warning letter will be sent by Opra to the employer. The letter will explain the new requirements and the obligations that employers now have. The employer will be asked to submit evidence of compliance. Cases where the employer continues to fail to comply with the new arrangements will be considered by Opra on an individual basis according to the circumstances of each case. The level of any fine will depend upon the circumstances surrounding a breach, including how the employer has responded on being contacted about the breach.