Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) (Amendment and Revocation) Regulations 2020 Debate
Full Debate: Read Full DebateDepartment: Department for Work and Pensions
Lord Loomba
Main Page: Lord Loomba (Crossbench - Life peer)Department Debates - View all Lord Loomba's debates with the Department for Work and Pensions
Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) (Amendment and Revocation) Regulations 2020
Lord Loomba Excerpts(4 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Loomba (CB) [V]
My Lords, these regulations are necessary to ensure that the Payment Protection Fund can engage fully in a proactive and meaningful way in the conversations and decision-making processes when a company finds itself in difficulty. It is paramount that the PPF has this ability so that hard-earned pensions are safeguarded for their future security, and I fully endorse these regulations.
Turning to the PPF itself, I wish to raise two points. First, concerns were recently raised in the other place about the robustness of the fund at present, given the sadly expected rise in companies needing help and unable to support their pension funds. The fund had a healthy ratio of 118.6% as of March 2019, with 18.6% more in its funds than its obligations to pay out and an actuarial surplus of £6.1 billion. This year, while it is less than in 2019, March 2020 saw a healthy 113.4% ratio, with 13.4% more in its funds than its obligation to pay out. The PPF says:
“Market volatility forces us to remain vigilant and responsive to changes in our external environment which may also require changes in our strategy.”
We are now in uncharted waters as we head into winter, with the daily death toll from the virus rising. More and more restrictions are being placed around the country, and this will inevitably mean more and more businesses struggling to survive. In the current climate, what assurances can the Minister give us that everything is being done to ensure that the PPF is fit for purpose and able to sustain itself in order to support people and their pensions?
My second point concerns the actual amount of pension received. This is set to rise in line with the consumer prices index and capped at either 2.5% or 5%, whichever is the greater. Is this something that needs to be looked into in the light of the pandemic, in the same way that the Government have just done with the state pension uprating Bill?