Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020

(Limited Text - Ministerial Extracts only)

Monday 7th September 2020 General Committees

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I beg to move,

That the Committee has considered the Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020 (S.I. 2020, No. 693).

It is a pleasure to serve under your chairmanship, Mrs Murray. The regulations form part of the corporate insolvency and restructuring regime introduced by the Corporate Insolvency and Governance Act 2020, which Parliament passed in the summer. The Act introduced corporate restructuring tools, including a moratorium and restructuring plan, to keep companies going, particularly during this period of great economic uncertainty.

The regulations are for the pension element, and provide the board of the Pension Protection Fund—the statutory compensation scheme—with creditor rights in specified circumstances. That includes when a company, a limited liability partnership or a charitable incorporated organisation retains a moratorium from creditor action or a proposal on the restructure of the business, as applicable.

The Pension Protection Fund, as the Committee will be aware, pays compensation to eligible occupational pension scheme members when a sponsoring employer has become insolvent and the pension scheme’s assets are insufficient to meet the scheme’s liabilities. It was invented under the Labour Government and has been supported by all Governments since. It is funded mainly by a levy collected from eligible pension schemes.

In the circumstances, we believe that the regulations are vital for the continuation of the new regime, and I recommend them to the House.

--- Later in debate ---

[Guy Opperman]

I endorse the hon. Gentleman’s comments on our good friend, the hon. Member for Birmingham, Erdington (Jack Dromey), who is much missed and to whom we send our best wishes, and on his sober and sensible approach to the disastrous events over the weekend. All of us in the House would echo his comments, and I applaud what he said.

With regard to Government support for pensions organisations and for automatic enrolment in the various coronavirus job retention schemes, this Government have a fantastic record on showing true support—from the Chancellor and the Secretary of State for Work and Pensions—for organisations that we all represent up and down the country. As a result of the regulations, we have powers to intervene to assist pension scheme members whom we all represent.

The criteria for intervention, as the hon. Gentleman will be aware, are no different for the particular roles of the Pensions Regulator or the Pension Protection Fund. The reality of the situation is that the Corporate Insolvency and Governance Act takes over and provides protections for businesses. The regulations provide the support that we need for the Pension Protection Fund to do its job on an ongoing basis. I commend the regulations to the House.

Question put and agreed to.