§ Mrs. Helen ClarkTo ask the Secretary of State for Work and Pensions if he will include in the forthcoming Bill on company pensions proposals to assist employees whose pensions are affected by company take-over. [144969]
§ Malcolm WicksThe Pensions Bill will include proposals to protect employees' on-going pension rights when affected by business transfer.
TUPE Regulations do not currently provide any protection for employees' on-going occupational pension rights when businesses transfer. However, proposed legislation will require transferee employers to provide transferred employees, who were in an occupational pension scheme with the transferor employer, with either a defined benefit, defined contribution or stakeholder pension scheme. In addition, if the transferee employer sets up a defined contribution or stakeholder scheme, they must match employees' contributions up to 6 per cent. with more from either party at their discretion.
The proposed debt on the employer regulations, published on 11 June 2003, will improve protection of employees' accrued rights if their scheme is wound up when their company is solvent. Legislation currently provides that, when a defined-benefit occupational pension scheme winds up, a deficiency in the pension fund becomes a debt on the employer. The proposed regulations will strengthen this protection by requiring that debt be calculated on the basis that a scheme wound up when the sponsoring employer is solvent should be able to meet the full costs of the rights accrued by scheme members.