§ Mr. WoodwardTo ask the Secretary of State for Work and Pensions what plans the Government have to re-instate the full guaranteed minimum pension for members of final salary schemes where the assets of the scheme are insufficient to buy the full amount of guaranteed minimum pension when the scheme is wound-up. [144076]
§ Malcolm WicksMembers of contracted-out occupational pension schemes can already, in certain circumstances, have some or all of their state scheme rights restored for the period they were contracted-out.
Deemed buyback—the mechanism for restoring members' guaranteed minimum pensions—was introduced as part of the Pensions Act 1995. Deemed buyback can be applied when the date the scheme started to wind up is on or after 6 April 1997. It is dependant on the scheme meeting certain conditions.
Where deemed buyback applies, the Inland Revenue can accept a lower amount from underfunded schemes than it would normally cost to restore the individual's rights in the state scheme. The actual transfer value held for each scheme member for whom deemed buyback applies is paid to the Inland Revenue, with the result of either the remainder being "deemed", or the member's rights being partially instead of fully restored, thereby extinguishing the scheme's liability to provide the member with contracted-out benefits.
The final decision to buyback into the state scheme will be taken by the individual scheme member.
§ Mr. WoodwardTo ask the Secretary of State for Work and Pensions (1) what estimate the Government have made of the(a) proportion and (b) number of people who are entitled to a guaranteed minimum pension from their contracted-out final salary pension 1097W schemes who will not receive their full entitlement due to the winding up of their employer's final salary pension scheme; [144077]
(2) what estimate the Government have made of the number of people who are entitled to a guaranteed minimum pension from final salary pension schemes that (a) have been wound up and (b) are being wound up by (i) solvent and (ii) insolvent employers. [144081]
§ Malcolm WicksIt is not possible to provide accurate estimates of the number of people entitled to a guaranteed minimum pension or those who might not receive their full entitlement in these circumstances. In order to produce such estimates, data on individual schemes' funding positions would be required. However, detailed information on this area is not available from existing data sources. Funding position information is particularly hard to obtain, given that it is highly sensitive to investment decisions and conditions in financial markets.
The Pensions Schemes Registry (PSR), administered by the Occupational Pension Schemes Regulatory Authority (OPRA), holds information on the number of final salary schemes which are currently in the winding-up process and the number of schemes which have entered and completed winding-up. The registry database is, however, limited in a number of ways as described in the following footnote. Consequently, it does not provide a continuous record of the status of schemes, though it nevertheless remains the most comprehensive source of information available on the aggregate number of pension schemes in the UK.
>Note:
The Pension Schemes Registry (PSR) is not designed or intended to provide a comprehensive or continuous statistical record of the status of schemes. The PSR registers schemes for tracing purposes and collects the levy from pension schemes, including those in the process of winding-up. New scheme data are being reported to the PSR on a continuous basis. Therefore, the figures are subject to continuous revision. When a scheme has changed status, the previous status of the scheme is not recorded on the registry. Schemes have up to 12 months to notify OPRA of any status change.