My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I take this opportunity to congratulate my noble friend on his new appointment and wish him every success with it.

The Question was as follows:

To ask Her Majesty's Government whether they will review the effectiveness of lay involvement in the governance of trust-based and contract-based workplace pension schemes in light of the Holden Trusteeship Review, Putting Structure into the System.

My Lords, I thank my noble friend for her kind words. The Government welcome all contributions to the debate on the governance of pension schemes. The role of the trustee is a key element of the governance of occupational pension schemes. My honourable friend James Purnell, a Minister in the other place, met Brian Holden on 9 October to discuss the key findings of his review. Although some of the review's recommendations are consistent with government policy, the Government take the view that the direction suggested by Mr Holden does not sit with the risk-based proportionate regime that the Government have established.

My Lords, I thank my noble friend for that response. Is he aware—I am sure he is—that employers have been turning away from final salary defined benefit schemes in favour of contract-based money purchase schemes, which are increasingly being offered to new employees? In final salary schemes, there is usually provision for the election of lay trustees by the workforce. That does not normally exist in the more common money purchase schemes. Does the Minister think that that is correct? Could not something be done to ensure that the employees concerned have some means of representation?

My Lords, I am aware of the movement away from defined benefit schemes, but the Pensions Regulator has commenced a consultation on how DC schemes should be regulated. On 13 November, the regulator published a consultation on how it proposes to address the risk to members in DC schemes and how it will regulate these schemes. The five common areas of risk outlined are poor administration, poor investment choice, unduly high charges, poor decisions on retirement choices and lack of member understanding. The consultation runs until 2 February 2007. There will doubtless be an opportunity in due course to consider the consequences of that.

My Lords, we on this side of the House congratulate the Minister on his promotion to the Department for Work and Pensions, where I am sure he will prove just as effective and popular as he was as spokesman for the Treasury. Given the dismal state of pensions over the past 10 years, may I add slightly to what the noble Baroness, Lady Turner, has just said? Does the Minister now see a need for defined contribution schemes to have trustees, or does he remain happy to leave them in the hands of the pensions industry, which for defined contribution schemes has always been the case?

My Lords, I thank the noble Lord for his kind words. I thought I set out a moment ago what is happening on that: consultation is under way, kick-started by the Pensions Regulator. It will run for a little longer yet. The state of pension schemes has been discussed in the House on a number of occasions. It is right that we should recognise what has happened to defined benefit schemes over the years. All informed analysis shows that the change has been brought about by increasing longevity, falling interest rates, which has had a significant impact on gilts, and the effect of equity markets. Those issues have caused the change and the move into defined contribution schemes.

My Lords, in congratulating the Minister on his promotion, I have a sinking feeling that he will be every bit as good as his predecessor—so no free hits there. Is the Minister giving us an assurance that those paying into schemes will have a voice in the way that they are managed? That seems to be the nub of this interchange.

My Lords, there is provision in the 1995 Act, which was amended and simplified in the 2004 Act, for there to be member-nominated trustees of occupational schemes. That is enshrined in legislation and is subject to the review of pension scheme regulation—to see whether that can be improved and made more effective and more risk-based in order to reduce the burden on pension schemes generally.