Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, if she will take steps to address the lack of statutory inflation protection for pre-1997 defined benefit pension entitlements.
Answered by Emma Reynolds - Parliamentary Secretary (HM Treasury)
It is for sponsoring employers to decide on what pension benefits they offer, provided they meet minimum standards. Scheme rules set out how the scheme should be run. It would not be appropriate for the Government to interfere in decisions made by individual schemes, beyond setting clear, affordable minimum standards that apply to all.
Pensions legislation does not usually apply new provisions retrospectively to rights that have already been accrued. It is generally seen to be unreasonable to add liabilities to pension schemes that could not have been taken into account in the funding assumptions that determined the contributions to be paid at the time. In some cases, the additional unplanned liabilities could result in significant additional contributions for the sponsoring employers, and ultimately threaten the future viability of some schemes.
It is extremely important to achieve a balance between providing members with some measure of protection against inflation and not increasing schemes’ costs beyond a level that schemes and employers can generally afford.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, if she will make an assessment of the financial status of people (a) who received pre-1997 defined benefit pensions and (b) who received payments from schemes with mandatory increases.
Answered by Emma Reynolds - Parliamentary Secretary (HM Treasury)
Analysis by the Pensions Regulator estimates that, as of 31 March 2023, more than three quarters of schemes provide indexation on scheme benefits accrued before 6 April 1997. This is in addition to any Guaranteed Minimum Pension rights accrued between 1988 and 1997, which must be indexed by the scheme. These schemes represent over 80 per cent of the membership of private-sector occupational Defined Benefit (DB) pension schemes. This information is published and available at: Data requests | The Pensions Regulator
The Department does not hold any data on the financial status of the members of these schemes.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, if she will make an assessment of the potential impact of regulations not subjecting pre-1997 defined benefit pensions to statutory indexation on the financial wellbeing of pensioners.
Answered by Emma Reynolds - Parliamentary Secretary (HM Treasury)
Analysis by the Pensions Regulator estimates that, as of 31 March 2023, more than three quarters of schemes provide indexation on scheme benefits accrued before 6 April 1997. This is in addition to any Guaranteed Minimum Pension rights accrued between 1988 and 1997, which must be indexed by the scheme. These schemes represent over 80 per cent of the membership of private-sector occupational Defined Benefit (DB) pension schemes. This information is published and available at: Data requests | The Pensions Regulator
The Department does not hold any data on the financial status of the members of these schemes.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, if she will take steps with Cabinet colleagues to encourage private pension schemes to voluntarily offer inflation protection for pre-1997 defined benefit pension entitlements.
Answered by Emma Reynolds - Parliamentary Secretary (HM Treasury)
It is for sponsoring employers to decide on what pension benefits they offer, provided they meet minimum standards. Scheme rules set out how the scheme should be run. It would not be appropriate for the Government to interfere in decisions made by individual schemes, beyond setting clear, affordable minimum standards that apply to all.
Pensions legislation does not usually apply new provisions retrospectively to rights that have already been accrued. It is generally seen to be unreasonable to add liabilities to pension schemes that could not have been taken into account in the funding assumptions that determined the contributions to be paid at the time. In some cases, the additional unplanned liabilities could result in significant additional contributions for the sponsoring employers, and ultimately threaten the future viability of some schemes.
It is extremely important to achieve a balance between providing members with some measure of protection against inflation and not increasing schemes’ costs beyond a level that schemes and employers can generally afford.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, if her Department will make an assessment of the potential merits of implementing measures to support pensioners whose defined benefit schemes are underfunded.
Answered by Emma Reynolds - Parliamentary Secretary (HM Treasury)
The UK has a robust and flexible regime for protecting defined benefit (DB) pensions.
Sponsoring employers are ultimately responsible for meeting the promised pensions and DB pension schemes are subject to the statutory funding objective which requires them to have sufficient and appropriate assets to provide for their pension liabilities. Schemes must be valued, at least every three years, and where there is a funding deficit a recovery plan must be put in place, and the deficit filled as soon as the sponsor can reasonably afford.
The Pensions Regulator has a range of enforcement powers and can intervene to protect member benefits when needed.
Where an employer becomes insolvent, and the scheme winds up underfunded, benefits are underpinned by the Pension Protection Fund (PPF) which can provide compensation at 100% of scheme benefits for pensioner members and 90% of scheme benefits for deferred members.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what information her Department holds on the number of retirees affected by the lack of statutory inflation protection for pre-1997 defined benefit pensions.
Answered by Emma Reynolds - Parliamentary Secretary (HM Treasury)
Analysis carried out by the Pensions Regulator estimates that, as of 31 March 2023, 23 per cent of private-sector occupational Defined Benefit (DB) pension schemes have no indexation applied to pre-1997 benefits. However, this is in addition to any Guaranteed Minimum Pension rights accrued between 1988 and 1997, which must be indexed by the scheme.
This information is published and available at: Data requests | The Pensions Regulator
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the Foreign, Commonwealth & Development Office:
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs, whether he has had discussions with the Fire Brigades Union on the fire engine donated to Gaza.
Answered by Hamish Falconer - Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)
The UK continues to call on Israel to increase humanitarian and commercial access into the Occupied Palestinian Territories by ensuring all aid crossings are fully operational, including the port of Ashdod. The Foreign Secretary recently spoke to Israeli Officials and raised the urgent need for a rapid increase in aid for those most in need. FCDO officials have raised the matter of this donation directly with the Israeli authorities and are working with colleagues in the Scottish Government to resolve the matter.