Committee stage in the Commons
- Speaker
Dr. Tony WrightLabour- Quote
- To ask the Secretary of State for Work and Pensions (1) what estimate he has made of the amounts which trustees of the pensions scheme which have already completed winding up and for whom annual payments have started have charged each scheme, per member, for registering, qualifying and liaising with Financial Assistance Scheme (FAS) staff and for submitting data and completing application forms for FAS payments;
- Source
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- Speaker
James PurnellLabour- Quote
- The information is not available in the form requested. The Department estimated the costs that might be incurred by trustees, scheme administrators and insurers in providing data as a Partial Regulatory Impact Assessment (RIA) published on 4 April 2005 as part of the Consultation Document on the Financial Assistance Scheme Draft Regulations 2005. This was placed in the Library of the House. This estimated that the cost of providing information to determine scheme eligibility might be around £250 per scheme. The costs for providing member data might vary from £15 to £75 per member depending on the how easy the data was to obtain. The costs for each scheme would also depend on the size of the scheme. The RIA concluded that the total cost of providing FAS with member data would be between £2 million and £3.4 million, which in relation to the 70,000 to 80,000 affected members we might expect to need data on to establish the full extent of losses, works out at between £24 and £40 per member.
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- Speaker
- Dr. Tony WrightLabour
- Quote
- To ask the Secretary of State for Work and Pensions what advice is available to members of winding up pension schemes who are offered deemed buyback to assist them with their decision.
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- Speaker
- James PurnellLabour
- Quote
- We have recently produced a deemed buyback fact sheet which gives information on the subject. This gives a brief explanation of deemed buyback and some of the issues that may need to be considered when deciding whether or not to adopt the option. This fact sheet will be sent by the National Insurance Contributions Office to anyone identified as qualifying for reinstatement. Only organisations registered with the Financial Services Authority are able to give financial advice.
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- Speaker
- Dr. Tony WrightLabour
- Quote
- To ask the Secretary of State for Work and Pensions what information his Department has obtained to assess the loss of contracted out state pension rights among members of pension schemes which started winding up between 1997 and 2005.
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- Speaker
- James PurnellLabour
- Quote
- The information requested is not available. An estimate of the total amount of pension rights (including where relevant, contracted out rights) lost by members of pension schemes which started winding up between 1 April 1997 and 5 April 2005 was given in the annexe to the Government's response to the Parliamentary and Health Service Ombudsman “Trusting In The Pensions Promise”, which was published in June 2006.
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- Speaker
- Dr. Tony WrightLabour
- Quote
- To ask the Secretary of State for Work and Pensions what estimate he has made of the potential costs to public funds of use of deemed buyback by members of pension schemes which started winding up between 1997 and 2004.
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- View in Hansard ↗
- Speaker
- James PurnellLabour
- Quote
- It is extremely difficult to produce an estimate to reasonable standards of reliability due to the lack of sufficient base data. Such estimates as we have are given in the following table. It must be emphasised that these figures are subject to high levels of uncertainty and therefore can be taken as a guide to potential costs only. The estimates assume, among other things, all those who qualify for deemed buyback will take up the option. They show a short-term increase in the funds being paid into the national insurance fund, followed by rising costs as the higher state benefit is paid out. Deemed buyback policy cost estimate, £ million in nominal pricesAdditional pension costTransfer receivedTotal annual cost2007-0815-50-402008-0915-50-352009-1015-50-352010-1115-50-352011-1215-50-352012-1320—202013-1420—202014-1520—202015-1620—202016-1725—252017-1825—252018-1930—302019-2030—302020-2130—302021-2230—302022-2330—302023-2430—302024-2530—302025-2630—302026-2730—302027-2830—302028-2930—302029-3030—302030-3130—302031-3225—252032-3325—252033-3425—252034-3525—252035-3620—202036-3720—202037-3820—202038-3920—202039-4015—152040-4115—152041-4215—152042-4315—152043-4410—102044-4510—102045-4610—10Notes:Figures are rounded to the nearest £5 million and therefore may not sum.
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