Private Pension Schemes: Regulation

Mary Kelly Foy Excerpts

Wednesday 21st June 2023 Commons Chamber

[Mr Jones]

I thank the hon. Member—it would not be an Adjournment debate without his intervention. He raises an interesting point. Most people do not understand their pension; they put their trust in the provider. They think that they are saving for their retirement and that they should have a pension when they retire—let us be honest, we have all encouraged people to pay into a pension—only to be let down by the way in which the various schemes operate. I will touch on the regulation in a minute.

I want to make two key points at this stage. First, the change to the pension scheme was not directly communicated to pension plan members. In fact, having done some research, I understand there is no legal requirement for the scheme to do so. However, the trustees cover themselves slightly on page 8 of the 2011 annual report by saying that, during the planned year, they had made changes to some factors and a calculation of methodology—it is literally two lines in the annual report. I beg anyone to understand what that meant in practice for people’s pensions. The annual report provided no further detail and, frankly, it is not worth the paper it is written on. The first time most people found out about this was when they realised the pension they had already taken was not increasing.

According to the Pensions Regulator’s website, trustees must act in “the best interests” of scheme members, as well as “prudently, responsibly and honestly.” In this case, I would argue that the trustees are not putting the interests of pensioners first; they are putting the interests of Nissan Motor Corporation above those of pensioners. The cumulative effect of what they have done is to save Nissan money it would have put into the pension scheme. Nor would I argue that it is responsible or honest to hide the changes in less than two lines of an annual report. There was no direct communication to let pensioners, or potential pensioners, know about the changes and how they would affect future years.

When I heard about this, I thought the obvious person to go to was the pensions ombudsman or the Pensions Regulator. Well, there was a bit of a ping-pong between the two of them. One wrote to me saying that the other was responsible, and vice versa. It went backwards and forwards. Frankly, my experience of them is that they are about as much good as a chocolate teapot. They are just blaming one another. It was this Member of Parliament writing to them—heaven help an individual pensioner writing to them to get any joy out of them.

It comes back to the point raised by the hon. Member for Strangford (Jim Shannon) on regulation and how we control these pension schemes. As I say, my experience of those two organisations has not been very good, so I would like the Minister to look at that point about the regulator and the ombudsman.

[Mary Kelly Foy (City of Durham) (Lab)]

Constituents have contacted me on this very issue, so I thank my right hon. Friend for securing this debate. Does he agree that this is an outrageous way to treat workers and that, frankly, it reflects terribly on Nissan?

[Mr Jones]

It is. These people have worked hard and saved into their pension. They think they have done the right thing and, through no fault of their own, they have found themselves in this position.

I did finally get a line out of the pensions ombudsman; he said that he was not prepared to look at the case because that notification, that one line in the annual report, was good enough. I find it absolutely amazing that it could be argued that this is communication with pension members. I doubt very many people actually read their pension scheme’s annual report. I am one of the sad people who do, but that is because of my trade union background. Many people do not. My hon. Friend the Member for Sunderland Central (Julie Elliott) knows that I am a bit of an anorak when it comes to the pension industry. Again, the idea that that can be held up as showing that the pension trustees have informed the pensioners is ridiculous. But that was the end of the game—no more correspondence came forward from either the regulator or the ombudsman.