Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill — House of Commons, 2021-11-26
Topic: Mixed Topics
Sally-Ann Hart (Conservative, Centre-right): Today, I welcome the private Member’s Bill introduced by the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier). It is very commendable. On 29 May 1970, the Equal Pay Act gained Royal Assent. With its passing, this House took an important and laudable step towards ensuring the equal treatment of men and women in the workplace and our society more generally. Since the Act’s passing and its later commencement in 1975, even greater strides, both de facto and de jure, have been taken towards gender equality, but as colleagues will know, much work remains to be done to that end. We all have responsibility as lawmakers to strive towards it continuously, through pieces of legislation substantial, modest or otherwise. The Bill can rightly be seen as a means to do that. Specifically, it will help right a historical oversight by making important clarifications in relation to pension schemes and guaranteed minimum pensions The historical oversight has been explained comprehen- sively —I will not go into that—but we see that it has its roots in the state earnings-related pension scheme that was introduced in April 1978, as well as the Pension Schemes Act 1993, which required GMPs effectively to be calculated on a fairly unequal and unfair basis. It has ultimately meant that the age at which GMPs could be calculated and the rate at which benefits built up were different for men and women. It is far from clear which sex received the greater total benefit as a result of this discrepancy, primarily as related advantages fluctuate over time. Whether it is men or women who benefit, such equality cannot be considered just There have been consultations over time about guaranteed minimum pension schemes and how equalisation in occupation schemes should be looked at. There was a consultation and proposal in 2012, and another in 2016-17. Compared with the 2012 consultation and methodology, the Department for Work and Pensions stated that there was broad agreement that the newer method was a distinct improvement and offered a relatively simple way to convert GMPs into ordinary scheme benefits, thus ensuring equality across the board and assisting the industry to deliver the change without policies being excessively onerous. That development was welcome, but concerns have continued to be raised by the industry that existing legislation is unclear in some areas, including, for example, that it fails to provide for circumstances in which the scheme’s sponsoring employer no longer exists and therefore cannot consent to a proposed conversion exercise as per the methodology For the full benefits of the 2016-2017 proposal on methodology to be secured in the relevant regulations, including the positive results for equality of outcomes for the sexes, these concerns must be properly addressed in legislation, and that is what the Bill seeks to do. As I understand it, the Bill will make it clear that the legislation applies to survivors as well as earners; provide for a power to set out in the regulations the conditions that must be met in relation to survivor’s benefit; provide for a power to set out in regulations detail about who must consent to the GMP conversion; and remove the requirement to notify and inform HMRC The Bill has been welcomed by industry leaders for covering key areas where clarification is most needed, which will in turn make the important process of equalising benefits using GMP conversion easier. With this positive impact on the industry in mind, and given the broader message that it sends out—that the equality of the sexes is important in all legislative matters, both significant and modest—I welcome the Bill, which is worthy of support from across the House.