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Transfer And Revaluation

Volume 77: debated on Thursday 18 April 1985

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I beg to move amendment No. 25, in page 15, line 13, leave out 'ceases' and insert

'has ceased, whether before or after the commencement of this section,'.

These amendments are technical. We want a transfer premium to be payable even if either or both of the events mentioned in subsections (1)(a) or (b) took place before section 44A comes into operation. That is not achieved at present; these amendments will ensure that it is.

Amendment agreed to

Amendments made: No. 26, in page 15, line 16, leave out 'is' and insert 'has been'.

No. 27, in page 15, line 28, leave out from 'person' end of line 29 and insert
'within a prescribed time after the prescribed event'.

I beg to move amendment No. 28, in page 15, line 34, leave out from 'under' to end of line 38 and insert

'section 44 above, except that —
  • subsection (6) shall be disregarded; and
  • the Secretary of State shall apply the actuarial table prescribed for the purpose of calculating the amount of an accrued rights premium in such manner as may be prescribed.'.
  • This is a technical amendment. It is intended that transfer premiums should be calculated in the same way as accrued rights premiums except that section 44(6) should be disregarded. There is, though, a difference. Transfer premiums can fall due many years after contracted-out employment has ended. We therefore need to be able to relate the premium to the date the application to pay it is made. This means that the amount of the premium will be related to the time the member exercises his transfer option and not to when his pensionable service ended.

    Amendment agreed to.

    I beg to move amendment No. 34, in page 18, line 2, leave out 'to provide the amount' and insert

    'so far as what they were liable to provide is'.

    With this we will discuss Government amendments Nos. 36 and 37.

    Amendment No. 40, in page 19, leave out from beginning of line 11 to end of line 10 on page 20, and Government amendments Nos. 41, 42 and 43.

    This is another technical amendrnent because the Life Offices Association pointed out the differences between the words "benefit" and "amounts". I shall give further details should the House wish that.

    Amendment No. 37 results from a point made by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). We propose to make a regulation giving the power to deal with the problems that he raised. One of them is that the sums paid under policies can be paid only to people for whom the scheme provided for payment. The problem arises when the proceeds of the policy exceed the maximum benefit levels permitted by the Inland Revenue for tax approval. At present any excess can be used to provide benefits for other people or returned to the scheme. The Bill as drafted would not permit that, which means that the insurance company would retain any excess. I congratulate my hon. Friend on bringing that point to my attention.

    Amendment No. 40 has the effect that new section 52D provides that people who choose or consent to a buy-out should, in the event of the insurance company failing to bear any resulting loss—I am sorry, this is an Opposition amendment.

    Amendments Nos. 41, 42 and 43 are technical amendments.

    9.30 pm

    The Minister has already half moved or half replied to our amendment. We wished to draw attention again to the fact that in certain cases a member of a scheme will not have his or her shortfall in guaranteed minimum pension underwritten by the Department; when, as the Minister said, the member has consented to a buyout and the insurance company has failed. Then, a portion of the guaranteed minimum pension might not be covered by the Policyholders Protection Act or by the Department. We recognise that such cases will be rare and that the amounts of benefit involved will be small. For that very reason we hope that the Government can do something about such cases.

    We recognise that people should be given as much choice as possible. However, part of that principle is that they should take some of the consequences of their own decisions. The amounts concerned in the shortfall to which the hon. Lady referred are small, as she said. The Policyholders Protection Act will safeguard 90 per cent. of the guaranteed minimum pension, so that we are talking about a maximum of 10 per cent. of the guaranteed minimum pension rights. We believe, therefore, that the Opposition amendment should be rejected.

    Amendment agreed to.

    Amendments made: No: 36, in page 18, line 3 leave out from beginning to 'secured' in line 4 and insert —
    '(3) In this section "appropriately secured" means'.
    No. 37, in page 18, line 22 after 'that', insert
    'except in such cases as may be prescribed,'.-[Mr. Whitney.]

    I beg to move amendment No. 39, in page 18, line 38, after 'widow', insert

    'and of any other contingent beneficiary who can be identified at the time the policy is effected.'.

    It will be convenient for the House to consider at the same time Government amendments Nos. 154 to 160.

    We raised this issue in Committee, when we asked for cover for contingent beneficiaries and not just for widows and widowers. We wanted them to have their interests taken into account when somebody was deciding to make changes in their pension provision. It was said in Committee that the Department would look into the matter to see whether something could be done. We are now providing the Minister with an opportunity to say on what grounds it was decided not to take any action.

    As the hon. Lady said, we promised in Committee to look at the whole subject, and we have done that. We have some sympathy with the points that the hon. Lady made, but our purpose in this provision is to ensure that the legal position on buy-out is clear. It does not make radical changes to what is a permissible buy-out. We are concerned, I emphasise, only with benefits above the guaranteed minimum pension level.

    Guaranteed minimum pensions are already adequately protected on buy-out. To impose the requirement suggested by the amendment would involve administrative expense for the schemes, even if the whereabouts of existing beneficiaries were known. The need to obtain consent could, moreover, prevent buy-outs, even if the same contingency benefits were provided by the policy.

    Buy-out usually means that benefit rights change, and it would be unreasonable to prevent a buy-out simply because a contingent beneficiary preferred one benefit to another. We have considered the proposition but, for the reasons I have given, I urge the House to reject it.

    I come to amendments Nos. 155 to 160. At present, the Bill requires the revaluation of widow's benefit when the member dies after pension age. This group of amendments extends the requirement to include dependants' benefits provided by the scheme. This means that all benefits which must be preserved in accordance with the Social Security Act 1973 are also covered by the revaluation requirements in the Bill.

    I beg to ask leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Amendments made: No. 41, in page 19, line 12, after 'pensions', insert
    'provided for a member or his widow'.
    No. 42, in page 19, line 13, after 'been', insert 'wholly or partly'.

    No. 43, in page 19, line 32, leave out 'guaranteed minimum pensions' and insert 'amount secured'.

    No. 154, in page 20, line 37, leave out 'his widow' and insert

    'any other person in respect of the member'.
    No. 155, in page 21, line 5, leave out 'his widow' and insert
    'any other person in respect of him'.
    No. 156, in page 21, line 27, leave out
    'any widow he may leave'
    and insert
    'to any other person in respect of him'.—[Mr. Whitney.]
    Amendments made: No. 110, in page 21, line 37, leave out from beginning to 'and' in line 44 and insert
    'any notional pensionable service which is credited to the member by the scheme;'.
    Amendments made:.

    No. 111, in page 21, line 47, at end insert
    "(3A) For the purposes of sub-paragraph (2)(b) and (c) above, any notional pensionable service which is credited to a member by a scheme shall be taken to have ended immediately before the member's actual pensionable service began.'. —[Mr. Whitney.]

    I beg to move amendment No. 112, in page 22, line 4, leave out from 'any' to 'calculated' in line 6 and insert

    'benefit the rate or amount of which is'.

    With this it will be convenient to discuss Government amendments Nos. 113 to 116, 119 to 123, 132, 125, 126 and 128.

    These amendments are the result of suggestions by my hon. Friend the Member for Slough (Mr. Watts) as a result of representations from the Institute of Acturies. I am extremely grateful to my hon. Friend and the institute for their help. The amendments are all of a technical nature and I shall not delay the House by going through them unless that is the wish of the House.

    Amendment agreed to.

    Amendments made: No. 113, in line 8, leave out 'scheme' and insert 'benefit'.

    No. 114, in line 9, leave out 'scheme' and insert 'benefit'.

    No. 157, in line 13, leave out 'his widow' and insert 'to any other person in respect of him'.

    No. 116, in line 19, leave out 'member's retirement benefits are' and insert 'benefit is'.

    No. 158, in line 27, leave out 'his widow' and insert 'to any other person in respect of him'.

    No. 117, in line 29, after 'include' insert—' (a)'.

    No. 118, in line 31, at end insert 'and

    • (b) any amount which is for any reason credited to the member by way of salary notionally earned.
    • (6) For the purposes of the application of this paragraph to a case where a member is credited with an amount by reference to salary notionally earned over a period of time of a particular length that period shall be taken to have ended immediately before the member's actual pensionable service began.'.

    No. 119, in line 31, at end insert—

    • '3A. —(l) This paragraph applies to any benefit the rate or amount of which is calculated by reference solely to the member's length of service.
    • (2) A benefit to which this paragraph applies is referred to in this Schedule as a "flat rate benefit".
    • (3) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any flat rate benefit payable to the member or his widow is to be revalued —
    • by revaluing the benefits which have accrued to him during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or
    • (a)by the method specified in paragraph 2 above.
    • (4) The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in subparagraph (3) above appears to the trustees or managers of the scheme to be appropriate.'.

    No. 120, in line 32, leave out from 'any' to end of line 36 and insert

    'benefit the rate or amount of which is calculated by reference to payments made from time to time by the member, or by any other person in respect of him.'.

    No. 121, in line 37, leave out 'scheme' and insert 'benefit'.

    No. 122, in line 38, leave out 'scheme' and insert 'benefit'.

    No. 123, in line 39, leave out 'scheme' and insert 'benefit'.

    No. 124, in line 41, leave out 'contributions paid' and insert 'payments made'.

    No. 159, in line 44, leave out 'his widow' and insert 'any other person in respect of him'.

    No. 132, in page 23, line 3, at end insert—

    '4A. Nothing in paragraph 2, 3, 3A or 4 above is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 by way of complete substitute for another pension or benefit.'.

    No. 133, in line 15, leave out from 'if' to end of line 21 and insert —

  • (a)there were omitted—
  • (i) from paragraph (a), sub-paragraph (ii) and the word "or" immediately preceding it;
  • (ii) from paragraph (b), the word "and"; and
  • (iii) from paragraph (c), the words from "authorised" to the end; and
  • (b)there were added at the end of paragraph (c), the words "and
  • (d)any provision of a scheme whereby—
  • (i) no pension, or a pension at a reduced rate, is payable to a widow whom the earner married not more than six months before his death;
  • (ii) the whole or any part of a pension is not paid to a widow, but instead comparable benefits are provided for one or more dependants of the deceased earner: or
  • (iii) no pension, or a pension at a reduced rate, is payable to a widow (or, where a provision such as is mentioned in subparagraph (ii) above operates, to another dependant of the deceased) who was more than ten years younger than he was".'.
  • No. 160, in page 23, line 24, leave out 'his widow' and insert

    'for any other person in respect of him'.

    No. 125, in line 23, leave out

    'other than a member of a money purchase scheme'.—[Mr. Whitney.]

    I beg to move amendment No. 145, in page 24, line 25, after 'equivalent', insert 'at the relevant date'.

    With this it will be convenient to discuss Government amendments Nos. 146 to 148.

    As drafted, the Bill bases the transfer value on the cash equivalent of accrued benefit at the time that service ends. We now think that it should be related to the value of accrued benefits either when service ends or when the application for transfer is made. Application could be made some years after service ends. We believe that it is important to ensure that the value reflects the current worth of the member's accrued rights.

    Amendment agreed to.

    Amendments made: No. 146, in page 24, line 30, leave out 'terminated' and insert 'terminates'.

    No. 147, in page 24, line 31, leave out 'sub-paragraph (1) above' and insert 'this paragraph'.

    No. 148, in page 24, line 42, at end insert—

    '"the relevant date" means the date when the member's pensionable service terminates or the date of the relevant application, whichever is the later; and
    "the relevant application" means any application which the member has made under paragraph 15 below and which he has not withdrawn.'.
    No. 126, in page 25, leave out lines 14 to 22.

    No. 48, in page 25, leave out lines 33 and 34 and insert 'another scheme'.

    No. 49, in page 25, line 36, at end insert 'and which satisfies prescribed requirements'.— [Mr. Whitney.]

    I beg to move amendment No. 149 in page 26, line 7, leave out 'In any case where' and insert 'Where—(a)'.

    With this it will be convenient to take Government amendments Nos. 150 and 151.

    The amendment results from arguments advanced in Committee by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). He suggested that when a scheme buys out guaranteed minimum pensions with an insurance company after other benefits have been transferred under the provisions in part II of the schedule, members should be able to choose the company. We have not been able to go quite that far. There could, for example, be difficulties if there was insufficient money to provide guaranteed minimum pension rights with the company of the members' choice. We think that when there is a transfer to a scheme that is not contracted out the member should be able to decide that his guaranteed minimum pension right should be secured with a company of his choice. This is a small but desirable increase in freedom of choice. I am grateful to my hon. Friend, with whom my hon. Friend the Minister and I had some differences earlier this evening, for pointing the way.

    Amendment agreed to.

    Amendments made: No. 150 in page 26, line 9, leave out 'only to have transferred to that scheme' and insert 'to have transferred to it only'.

    No. 151, in page 26, line 11, after 'pensions', insert 'and

    • (b) the member has not required them to use the portion of his cash equivalent that represents guaranteed minimum pensions in either of the ways specified in sub-paragraph (2)(b) and (c) above,'. —[Mr. Whitney.]

    I beg to move amendment No. 50, in page 26, line 20, at end insert —

    • '(7) A member who has exercised an option as in subparagraph 2(b) above can subsequently require the insurance company or friendly society to provide the then cash equivalent of the annuity purchased to be reapplied as in sub-paragraph (1) above.'.

    With this it will be convenient to take amendment No. 51, in page 26, line 20, at end insert —

    • '(8) A member who acquires a right to a cash equivalent, as in sub-paragraph (2) above, will have a subsequent right within 6 months to reverse his decision.'.

    We wish to raise here two important issues. In Committee we talked about the freedom that is being given to members of occupational pension schemes and we are anxious to extend those freedoms by means of these two amendments. First, we seek to allow members, once they have transfer value, not merely to move out of an existing occupational scheme and into perhaps some insurance-based scheme, but also, should they wish to do so, to move back out again. We see no reason why such burdens should be placed on occupational pension schemes in the interest of giving freedom to members, whereas insurance companies are allowed to continue without having to accept similar burdens.

    We recall that in Committee the Minister argued that if those freedoms were desirable and necessary market forces would make insurance companies act in that way so that there was no need to put such a requirement in the Bill. It seemed to us then, and it seems to us now, that on that argument there is no need for almost all of this part of the Bill. If market forces will always force insurance companies and occupational pension schemes to do what is desirable and what their members want, there would never be any need for statutory compulsion. As there is such a need, there is a Bill and it would be better to be more even-handed between occupational pension schemes and insurance companies.

    Amendment No. 51 seeks to raise the issue of a cooling-off period in explicit terms. We are not wedded to the period of six months suggested in the amendment but a specific cooling-off period should be allowed for three reasons. First, it was suggested that that would be a perfectly practicable proposal for portable pensions. Therefore, if it is practicable for portable pensions, why is it not practicable now? Secondly, it has been found to be practicable for life insurance policies, so why is it impracticable now?

    Thirdly, although we recognise that the Goverment are in favour of some sort of cooling-off period and have taken steps elsewhere to deal with such a period, to put it mildly, theirs is a rather woolly proposal. They say that as long as a person has thought about what he proposes to do and as long as he has changed his mind before the transfer value has gone through and all the arrangements made, that is fine and he can withdraw. I understand what the Government are trying to do in that respect, but as the different occupational pension schemes in different companies are likely to move at different speeds the Government are really saying that a person will have to try to find out how quickly, given the particular circumstances, a transfer might go through and that that will tell a person how long a period he has in which to change his mind. That is not satisfactory. Cooling-off periods exist in other circumstances and the Secretary of State has commended them to the House and told us how possible they are for portable pensions. Obviously, we believe every word that the Secretary of State tells us and we are sure that the Minister will tell us tonight that the same can be done in these circumstances.

    I fear that the hon. Member for Derby, South (Mrs. Beckett) will not be surprised to hear me advise the House to reject the amendments. At the moment, annuities covering preserved pensions, including guaranteed minimum pensions, cannot be assigned or surrendered. We are proposing to allow assignment or surrender in prescribed circumstances. The appropriate powers are at paragraphs 3 and 11 of schedule 4. But we do not think that we should go further than that. We are confident that if there is a demand for policies which allow further transfer options, insurance companies will meet it. People will thus be able to shop around and buy the policy that they want and that best suits them.

    As the hon. Lady will be the first to recognise, our view of the efficacy of market forces and their importance for pension scheme holders and applicants for insurance funds is much stronger than hers. She shows a complete lack of comprehension of the efficacy of market forces.

    We have some sympathy with amendment No. 51. Indeed as she said, we promised in Committee to reconsider our position. As a result, we have brought forward amendment No. 64. That allows the application to make a transfer to be withdrawn at any time up until the scheme is committed to make payment to another scheme or insurance company. That will, in effect, provide a cooling-off period. Before deciding that they want a transfer, members will have to find out what the transfer value is. They will then need to shop around to decide how they wish to use it. Only then will they tell the scheme that they wish to have a transfer and how it is to be applied. So we have a built-in cooling-off period.

    I recognise that that will not go as far as the hon. Lady might wish. We considered the road that she has invited us to take, but concluded that we could not reasonably require schemes to take back a transfer value after it had been paid. We could require schemes to delay making transfer payments, but that would be unfair to people who know what they want and had considered the position carefully before making their choice. We therefore believe that the best way to meet the point, which we agree is a good one, is by giving the right that we have already proposed under amendment No. 64.

    We accept that the Government have to some extent moved on this matter, although perhaps not as far as we would have wished. In that light, I beg to ask leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    9.45 pm

    '(lA) The power to make regulations conferred by subparagraph (1) above includes power to provide that cash equivalents are to be calculated and verified in such manner as may be approved in particular cases—

  • (a)by prescribed persons; or
  • (b)by persons with prescribed professional qualifications or experience; or
  • (c)by persons approved by the Secretary of State.'.
  • With this it will be convenient to take Government amendments Nos. 76 and 77.

    We wish to have the power to provide that cash equivalents must be calculated and verified in a way that is approved by actuaries. In practice, that would normally happen without a statutory requirement. However, in this case we feel that the calculation of transfer value is too important a subject to leave any room for doubt. We have therefore tabled the amendment to remove the doubt.

    Amendment agreed to.

    I beg to move amendment No. 52, in page 27, line 8, at end insert—

    (4) Regulations shall provide that the cash equivalent mentioned in paragraph 10(1) shall not be less than the aggregate—

  • (a)of the contributions under the scheme paid by a member or on his behalf; and
  • (b)of any investment yield and bonuses which have arisen out of those contributions.'.
  • I make no apologies for raising again the question of the calculation of transfer values. I am glad to see that my right hon. Friend the Secretary of State is present. He will recall that on Second Reading he gave a clear undertaking that, if progress was not made on the question of a formula for calculating transfer values, the Government would introduce a measure. We all know that that is second best, and I have not been encouraged by what I have read about the progress since Second Reading.

    The fact that the Bill will leave the House in that state disappoints me. All the provisions on transfer values will be of little benefit to early leavers if there is not a clear formula. My amendment merely seeks to underpin whatever that formula may be. In paragraph 11 on page 25 there is a clear formula for a calculation of transfer values in relation to money purchase schemes. That is not the case for ordinary final salary schemes. My amendment merely seeks to introduce the same formula as a minimum for final salary schemes. That should be inserted into the Bill so that there is at least a guaranteed minimum.

    At present there is nothing in the Bill about the formula for the calculation of transfer values, yet that goes to the heart of the entire objective of that part of the Bill.

    I support my hon. Friend the Member for Beaconsfield (Mr. Smith). I have given the matter of the valuation of the early leavers' rights in final salaries schemes a good deal of attention, and 1 have had the benefit of first-class advice. It is a difficult problem to solve. The most practical approach to it is to encourage occupational pension schemes to build up an earnings-related money-purchase entitlement in relation to each employee within the envelope, if necessary, of the final salary scheme. In that way, even if it is difficult to assess what the final salary scheme would give the early leaver, there is a concrete and substantial fall-back, which has been built up on conventional money-purchase lines, assisted by an appropriate measure of indexation.

    On Budget day The Times published a letter which I submitted in which I recommended that in the requirements on which the Government propose to insist for the registration of all occupational schemes the element which is funded on behalf of individual beneficiaries should be identified separately from that element of the fund which is held by the trustees but which is not allocated to individuals. There is misuse of the tax provisions relating to occupational pension schemes by corporate treasurers who, when they have funds available, put them into the occupational pension fund so that they will increase without taxation.

    Obviously, these funds cannot then be allocated to individual beneficiaries. If, however, the Government insisted that, in reporting to the registrar, the trustees or managers of schemes should separate that element of the fund which is identifiable as belonging to individuals from the other elements which are not allocated to individuals, the trustees could see the advantage in allocating the maximum, instead of the minimum, to individual beneficiaries. That would be a step in the right direction.

    We had long discussions before the Budget on the taxation of occupational pension schemes. After taking first-class advice, I came to the conclusion that it would be entirely wrong to introduce taxation of the build-up of that element which is allocated to individuals; but I believe that the Government would be within their rights to introduce taxation of the income that arises from the unallocated fund. If they did that the trustees or managers of the schemes would choose to allocate the maximum to individuals because it would suit them to do so. When the individual's entitlement was valued because he chose to move to another scheme, he would get something much more like his real entitlement instead of, as now, a ridiculous and insulting pittance.

    Like the hon. Member for Beaconsfield (Mr. Smith), I wish to hear a comment from the Minister on the Government's reaction to the proposals that the actuaries have made, which, as I understand them, are more a statement of principles than anything that we could conceivably call a set of comparable tables. I, too, recall the assurance given by the Secretary of State that a satisfactory measure would be introduced. Although it has been suggested to me that the actuaries' proposals will do away with the grossest abuses, it is not certain that:hey would meet the argument that people should be given, the transfer value for a given benefit, or something like it, which is what most hon. Members were expecting to get from the Bill.

    There is little difference among us on this issue. I should make it clear to the House that the discussions to which my hon. Friend the Member for Beaconsfield (Mr. Smith) referred are making good progress, and that the actuarial profession is close to issuing its draft guidance. When it does, it will be followed as soon as possible by the Government's proposals for regulations, which will be subject to full consultation. I hope that that will give him some of the encouragement that he seeks. The matter has not been forgotten or ignored. On the contrary, we are as anxious as he is to make progress, because it is crucial to fulfilling the Government's intentions in respect of this part of the Bill.

    I hope that my comments will also sound reasonably satisfactory to the hon. Member for Derby, South (Mrs. Beckett) in view of the helpful attitude that she has displayed throughout the evening. Unless I am pressed further, that is probably as much as I can sensibly say now.

    I had hoped that my hon. Friend would enter into the spirit of happy co-operation that has pervaded our proceedings this evening —[Interruption.] I do not wish to be barracked from the alliance Benches, although I suppose I could not hope for much better.

    As long as the hon. Gentleman is getting at my hon. Friend, not at me, I am prepared to put up with it.

    My hon. Friend has fairly asked for a further explanation. The transfer provisions in the Bill will give early leavers the cash equivalent of their accrued rights under the scheme. That includes the value of any revaluation under the Bill and any increase due from the anti-franking provisions in last year's Act. Details of how the cash equivalent is to be calculated will be set out in regulations. Money purchase benefits will be treated largely on the lines suggested by my hon. Friend. What we intend here is that the transfer value should be the product of what the invested contributions are worth less any administrative expenses. Therefore, what we intend and what my hon. Friend proposes amount more or less to the same thing.

    Where I differ from my hon. Friend is when we consider defined benefit schemes. Average and final salary benefits, as their name implies, are calculated in relation to salary and length of service. They do not directly reflect the individual value of contributions paid either by the employer or the employee. There is a considerable element of cross-subsidy in these schemes; for example, benefits for younger members cost less to provide than those for older members. While, notionally, employers make the same contribution for all members, what they are in fact doing is providing sufficient money, expressed as a percentage contribution for each member, to enable the scheme to meet its benefit promises. If we were to require these schemes to give transfer values based on contributions paid by employers and employees, we should in effect be destroying the cross-subsidy or pooled risk element inherent in them.

    We believe that transfer values should reflect the value of preserved benefits in schemes. That is what the Bill seeks to do and we shall reinforce that in our proposals for regulations. I think that we have got the basic concept right and I hope that what I have said will be sufficient for my hon. Friend to accept the broad principle that we have followed.

    I do not want to get into a complicated debate now about cross-subsidies, so, in the light of what my hon. Friend said earlier about the good progress that has been made, I beg to ask leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    I beg to move amendment No. 127, in page 27, line 34, leave out from 'to' to end of line 38 and insert

    'provide benefits to which the cash equivalent related'.

    As drafted, when a member takes a transfer the Bill removes liability from schemes for guaranteed minimum pensions and benefits required by present legislation. This amendment goes further than that and removes liability for all benefits to which the transfer related. This is a point that was made in Committee and also by people outside the House. We have considered it and we accept that it is logical and are therefore implementing it.

    Amendment agreed to.

    Amendments made: No. 53, in page 28, line 5, leave out from 'proceedings' to 'it' in line 8 and insert

    'or proceedings before a court have been commenced against a member at any time before the expiry of the period of twelve months beginning with the date when his pensionable service terminates; and
    (b)'

    No. 54, in page 28, line 13, after 'duty', insert

    ',subject to the following provisions of this paragraph,'.

    No. 55, in page 28, line 21, leave out from 'may' to end of line 23 and insert

    'grant an extension of the period within which the trustees or managers of a scheme are obliged to do what is needed to carry out what a member of the scheme requires—'.

    No. 56, in page 28, line 24, at end insert 'in the opinion of the Board'.

    No. 57, in page 28, line 25, leave out 'a' and insert 'the'.

    No. 58, in page 28, line 26, leave out 'or'.M

    No. 59, in page 28, line 27, leaveout first 'a' and insert 'the'.

    No. 61, in page 28, line 30, leave out 'a' and insert 'the'.

    No. 62, in page 28, line 32, leave out from 'what' to end of line 34 and insert

    'is required within that period'.

    No. 63, in page 28, line 34, at end insert

    'or
    (iv) the member has not take all such steps as the trustees or managers can reasonably expect him to take in order to satisfy them of any matter which falls to be established before they can properly carry out what he requires;
    (b) in any case where the provisions of section 49 above apply; and
    (c) in any case where a request for an extension has been made on a ground specified in paragraph (a) or (b) above, and the Board's consideration of the request cannot be completed before the end of that period.
    (5A) A request under sub-paragraph (5) above may only be made by the trustees or managers.
    (5B) The Board shall have power, if they are satisfied that there has been a relevant change of circumstances since they granted an extension, or that they granted an extension in ignorance of a material fact or on the basis of a mistake as to a material fact —
  • (a)to direct that the extension shall end on a date earlier than that on which it would otherwise have ended; or
  • (b)to revoke the grant of the extension.'.
  • No. 64, in page 28, line 38, at end insert—

  • '15A.—(1) Subject to sub-paragraph (2) below, a member of a scheme may withdraw an application under paragraph 15 above by giving the trustees or managers of the scheme notice in writing that he no longer wishes them to do what is needed to carry out what he previously required.
  • (2) Such a notice shall be of no effect if it is given to the trustees or managers at a time when, in order to comply with what the member previously required, they have already entered into an agreement with a third party to use the whole or part of the member's cash equivalent in a way specified in paragraph 12(2)(a), (b) or (c) above.
  • (3) A member who withdraws an application may make another.
  • (4) A notice to the trustees or managers of a scheme under this paragraph is to be taken to have been given if it is delivered to them personally, or sent by post in a registered letter or by the recorded delivery service.'.
  • No. 128, in page 29, leave out lines 24 and 25 and insert—

    • (b) any benefit is an average salary benefit, a flat rate or a money purchase benefit.' [Mr.Newton.]