Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment she has made of the potential of state pension integration practices on (a) lower-paid and (b) female pensioners; and if she will take steps to review (i) guidance and (ii) legislation to help ensure (A) fairness and (B) transparency.

The aim of “integrated” pension schemes is to provide a more predictable and stable pension income over time where a person’s occupational pension comes into payment before their State Pension. This is achieved by paying a higher pension before the person reaches State Pension age, which is subsequently reduced when their State Pension comes into payment. The Government is aware of the concerns raised by members of these schemes, especially in terms of the possible disproportionate impact on women.

The reduction applied to lower-paid and female pensioners in an integrated scheme may be a greater proportion of the overall entitlement than it is for higher-paid and male pensioners. This is due to societal and labour market issues during their working lives, which has resulted in these groups having, on average, lower earnings and therefore receiving a lower pension from the scheme.

It is extremely important that people have good, clear information about their occupational pension scheme, so that they can make informed decisions about their retirement. Trustees are required to provide relevant information to members of a pension scheme, including information about how integration will affect their pension benefits. If someone does not think that their scheme has been sufficiently clear about the way integration will affect their pension, they should use the scheme’s internal dispute resolution service, which every scheme is required to have. If they are not satisfied with the outcome, they can take the matter to the Pensions Ombudsman.

The precise design of pension benefits is a matter for employers and trustees and is not covered in Department for Work and Pensions legislation. Pension scheme rules on the calculation of benefits are many and varied and are a matter for employers and scheme trustees to decide.; however, these pensions have been paid in accordance with the scheme rules and within the law.