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Occupational Pension Schemes

Volume 401: debated on Thursday 20 March 2003

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To ask the Secretary of State for Work and Pensions if her Department will make contingency plans in the case of a shortfall in an occupational pension scheme to prevent a UK subsidiary of an overseas group abandoning the scheme and not meeting any funding shortfall. [103393]

Provisions already exist to prevent companies from abandoning and not meeting any funding shortfall in occupational pension schemes. If a salary-related pension scheme is operating with tax approval, and is subject to the Minimum Funding Requirement (MFR), then a wide range of requirements

levels of take-up. There is likely to be a wide margin of error around these estimates and they should only be used to provide an indication of the likely effect.

Estimated MIG expenditure under different levels of take-up

Expenditure take-up level

Estimated MIG expenditure (£ billion)

100 per cent.5.6
95 per cent.5.3
90 per cent.5.1
85 per cent.4.8

Notes:

1. The assumption has been made that the take-up levels requested relate to expenditure levels and not the case load level.

2. All figures are rounded to the nearest £100 million.

3. Expenditure for 2002–03 is based on PBR 2002 forecasts.