Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill

Jonathan Reynolds Excerpts

2nd reading
Friday 26th November 2021 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I congratulate the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) on presenting this Bill. As the public probably know, Members have huge discretion in respect of what legislation to choose when they are successful in the private Members’ ballot, and I think everyone here today is personally very grateful to the hon. Lady for using her success in the ballot to propose these measures.

We face significant challenges in the world of pensions, whether they relate to the viability of schemes, the future of auto-enrolment—which was mentioned by the hon. Member for North West Durham (Mr Holden)—the threat posed by scams or the recent growth in pensioner poverty, which is a worrying trend. However, while we invest our efforts to confront those challenges, it is only right that, when possible, we seek to take the relatively more straightforward steps that will help us to correct problems in the pensions sector, and work with the pensions industry to deliver the best possible outcomes for our constituents. That is why, I am happy to say, we support the Bill in principle.

This is a sensible Bill, designed to streamline and clarify legislation on converting guaranteed minimum pensions in order to equalise benefits between men and women in accordance with the Equalities Act 2010 and following the High Court judgment relating to the Lloyds Banking Group schemes in 2018. The hon. Member for Rutherglen and Hamilton West made a very good speech outlining that case: it might sound technical to some, but I think that she explained it very clearly.

I know from my conversations with representatives of the sector that converting GMPs into other scheme benefits on a value basis like this is the preferred way of addressing equalisation, rather than the costly and often complex dual-records approaches. However, we recognise that there are problems that have remained unresolved since GMP conversion was first in legislation. As the hon. Member for Rutherglen and Hamilton West explained, they relate to the lack of clarity on whether the legislation applies to survivors as well as earners, and the lack of provision for circumstances in which the scheme’s sponsoring employer no longer exists and is unable to consent to the conversion exercise. Her Bill addresses those problems in a simple and practical manner, and I have noted the support that it has received from the pensions industry. The head of GMP equalisation at Lane Clark & Peacock—a friend of many of us—has said that it will

“make the whole process of equalising benefits using GMP conversion easier.”

The last Labour Government made clear their belief that we needed to equalise GMPs, and the Bill is an important step towards ensuring that everyone enjoys dignity and security in retirement. We should be doing everything possible to help the pensions industry to fulfil what are now its legal duties to deliver GMP equalisation, and that includes supporting the Bill. I see no reason why Members in any part of the House would not wish to see these flaws addressed, and I sincerely hope that the Bill is able to proceed to its Committee stage. I repeat our support for it, and commend the hon. Member for Rutherglen and Hamilton West for choosing to introduce it today.