Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government what discussions they have had with local authorities regarding the use of pension contribution holidays as their schemes have significant surpluses.

Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)

Employer contribution rates are set as part of the triennial valuation process which is undertaken by all Administering Authorities in the Local Government Pension Scheme. The 2025 valuation, which will set contribution rates for 2026-27 onwards, is in progress and will conclude on 31 March.

The setting of employer contribution rates is locally led and managed. Administering authorities consult employers, including local authorities, to ensure that rates are sustainable for both the fund and employers. The Department does not set the rates or take part in these consultations.

Question to the HM Treasury:

To ask His Majesty's Government what analysis they have carried out to support the exclusion of UK listed investment funds as qualifying assets under the Pension Schemes Bill.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The scope of the qualifying assets provisions in the Bill’s asset allocation reserve powers are designed to reflect the scope of the Mansion House Accord, a voluntary expression of intent by seventeen major pension providers to invest 10% of their main defined contribution default funds in private markets, including 5% in UK private markets.

This reflects the Government’s intention that the reserve powers should not be open-ended but should be capable of serving as a limited backstop to the commitments made in the Mansion House Accord.

Question to the Department for Work and Pensions:

To ask His Majesty's Government what estimate they have made of the cost of compensation for the loss of inflation protection for benefits accrued before 1997 for past members of the AEA Technology pension scheme who were transferred out of the public sector scheme in 1996.

Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)

We recognise the challenges members of the AEA Technology pension scheme face and are directly tackling the point you raise about the loss of inflation protection. The Chancellor announced at the Budget that this Government will introduce annual increases on compensation payments from the Pension Protection Fund and Financial Assistance Scheme that relate to pensions built up before 6 April 1997. These will be Consumer Prices Index-linked (capped at 2.5%) and apply prospectively (i.e. to payments going forward) for members whose former schemes provided for these increases.

I am pleased to confirm that past members of the AEA Technology pension scheme with pre-97 accrual will benefit from this measure.