§ Mr. WyattTo ask the Secretary of State for Work and Pensions what plans he has to compensate people606W who have had their occupational pensions placed into administration; how many occupational pension funds are in administration; and how many occupational pension funds have been wound up since 1997. [123996]
§ Malcolm WicksAs my right hon. Friend, the Secretary of State, explained to my hon. Friend when they met on 12 June, we are concerned about instances when the employer sponsoring a pension scheme becomes insolvent and the pension scheme winds up underfunded.
We are very much aware of the serious impact this has on workers and their families. Indeed, it is because of cases like this that we are strengthening member protection and introducing a Pension Protection Fund to protect the long term security of occupational pension scheme members. However, as we have also made clear, while we will listen to constructive proposals we do not want to give false hope.
Information on pension schemes is held by the Pension Schemes Registry (PSR) that is maintained by the Occupational Pensions Regulatory Authority (OPRA). The PSR does not collect information about the number of pension schemes where the employer sponsoring the pension scheme is insolvent. Data on the number of occupational pension schemes recorded by the Registry as wound up since 1997 is provided in the table. The figures relate to the position as at 19 March 2003.
Number of schemes that completed winding up 1 April 1997 to 31 March 1998 24,974 1 April 1998 to 31 March 1999 7,427 1 April 1999 to 31 March 2000 8,185 1 April 2000 to 31 March 2001 6,119 1 April 2001 to 31 March 2002 4,731 1 April 2002 to 19 March 2003 3,599 Notes:
1. The 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 is being reported to the PSR on a continuous basis. Therefore, the figures are subject to continuous revision. Schemes have up to 12 months to notify of any change.
2. A wound up scheme is one which has notified OPRA that it has completed winding up procedures.
3. The data in the table relate to defined benefit and defined contribution private sector occupational pension schemes. In addition to data on occupational schemes, the Registry also collects data on personal pension and public sector schemes. These schemes, however, are not included in the table.
4. The reason the figures for 1 April 1997 to 31 March 1998 are so much larger than for other years is that from 1997, the rules governing which schemes had a levy liability were changed—all schemes with two or more members became liable whereas previously, only schemes with two or more active members were liable. So, in 1997, the Pension Schemes Registry issued levy requests to a large number of schemes, only to discover that a number of them had already wound up. All these schemes were recorded as having completed wind up in 1997–98 even if, in fact, they had wound up earlier. Therefore, we know these figures are inflated, but not by how much. This is because the figures were not collected for the purpose of recording the numbers of scheme wind ups.
Source:
OPRA