§ Mr. TynanTo ask the Chancellor of the Exchequer what the cost to the Treasury of 2 per cent, payments made to appropriate personal pension arrangements was, where contracting out from SERPS commenced between 29 April 1988 and 30 June 1994 and those persons have subsequently been reinstated, as a result of the FSA Review of Personal Pension sales, into an arrangement where the 2 per cent, incentive would not have been payable. [84715]
§ Ruth KellyIndividuals who had previously been in a contracted-out occupational scheme for two or more years and were entitled to stay in that scheme but left voluntarily after 5 April 1988 while continuing to work for the same employer would not have qualified for the 2 per cent, incentive when taking up membership of an appropriate personal pension (APP) scheme. If these members were subsequently reinstated into the occupational scheme there could have been no requirement to recover an incentive which had not been paid.
In the other cases, where either the individual had not been in the scheme for two years, or they had never been in the occupational scheme but chose to join the 837W appropriate personal pension scheme despite being eligible to join the occupational scheme, the 2 per cent, incentive would have been paid.
Two options were used when reinstating individuals into their occupational pension schemes.
One option involved the removal of the APP arrangement from their NI account and the adjustment of their NI contributions from standard A rate to the contracted-out rate. This action triggered the recovery of the minimum contributions from the APP scheme, which would include the 2 per cent, incentive if paid.
The other option was to leave the APP in place and the APP provider to pay a transfer value to the occupational scheme sufficient to reinstate the relevant years into the occupational scheme. In these cases because the APP was not cancelled no recovery of the 2 per cent, incentive was made.
No statistics have been kept in relation to the amount of 2 per cent, incentive recovered in cases where the individual has been reinstated into an arrangement that would not have qualified for the incentive.
§ Mr. TynanTo ask the Chancellor of the Exchequer (1) what the cost to the Treasury of the 2 per cent, incentive payments made to appropriate personal pension arrangements was, where contracting out from SERPS commenced between 29 April 1988 and 30 June 1994; [84717]
(2) what the value of 2 per cent, incentive payments reclaimed by the Treasury was, where they were made to appropriate personal pension arrangements where contracting out from SERPS commenced between 29 April 1988 and 30 June 1994, and where those persons were reinstated, as a result of the FS A Review of Personal Pension sales, into an arrangement where the 2 per cent, incentive would not have been payable. [84716]
§ Ruth KellyThe 2 per cent, incentive was payable for tax years 1987–88 to 1992–93 inclusive. If a member of an appropriate personal pension (APP) scheme was entitled to the 2 per cent, incentive it was paid from the tax year their APP arrangement began until 5 April 1993 or the tax year their APP was cancelled if earlier.
Statistics show that the net amount of 2 per cent, incentive paid to APP schemes for this period was £3,180.19 million.
No statistics have been kept in relation to the amount of 2 per cent, incentive recovered in cases where the individual has been reinstated into an arrangement that would not have qualified for the incentive.