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Pensions

Volume 450: debated on Wednesday 11 October 2006

To ask Mr Chancellor of the Exchequer whether he has plans to compensate those who pay voluntary class 3 National Insurance contributions under the present system if the proposed Pensions Reform Bill is passed in its present form and additional contributions paid prove unnecessary. [91084]

[holding answer 13 September 2006]: The National Insurance system operates on a pay-as-you-go basis with the National Insurance Contributions that people pay funding payments to those currently in receipt of contributory benefits and helping to fund the NHS. Work is ongoing on the detailed implementation of the Pensions White Paper.

The Government intend to bring forward legislation on Pensions Reform during the second session of this Parliament.

To ask the Chancellor of the Exchequer what account is taken of pension deficits in the financial model for economic growth. (91617)

The Treasury macroeconomic model is principally a model of the economic activity described and recorded in the National Accounts. As such it does not explicitly include pension deficits that are defined by accounting standards e.g. FRS17. However, in preparing the Pre-Budget Report and Budget forecasts careful consideration is given to the possible economic implications of pension fund deficits for corporate and household behaviour.

To ask Mr Chancellor of the Exchequer what assessment he has made of how a restriction in tax relief on pension contributions to the basic rate would affect defined benefit pension schemes. (90411)