Pensions Bill

moved Amendment No. 136ZB: 136ZB: After Clause 111, insert the following new Clause— ““Parliamentary pension scheme member-nominated trustees (1) After section 241 of the Pensions Act 2004 (c. 35) (requirement for member-nominated trustees) insert— ““241A Parliamentary pension scheme: member-nominated trustees (1) This section applies to a scheme which is set up under section 2 of the Parliamentary and other Pensions Act 1987 (power to provide for pensions for Members of the House of Commons etc). (2) The requirements of section 241 shall apply to the trustees of such a scheme subject to the following modifications. (3) Section 241(2) shall be read as if for paragraph (b) there were substituted— ““(b) are selected as a result of a ballot in which all the eligible scheme members are given the opportunity to vote.”””” (2) Regulation 2(i) of the Occupational Pension Schemes (Member-nominated Trustees and Directors) Regulations 2006 (S.I. 2006/714) is revoked.”” The noble Lord said: These amendments have been given some marvellous numbers. I declare an interest as a member of the Parliamentary Contributory Pension Fund. Parliament passes Bill after Bill on pensions. Since 1997, we have had the Welfare Reform and Pensions Bill, the Child Support, Pensions and Social Security Bill, the State Pension Credit Bill, the Income Tax (Earnings and Pensions) Bill, the Pensions Bill of 2003, the Armed Forces (Pensions and Compensation) Bill of 2003, the Pensions Bill of 2006 and the Pensions Bill that we are discussing today. As I think that list establishes, we are very willing to place obligations on other people and on outside schemes. Indeed, in an earlier intervention, the Minister talked on the vital role of trustees and the obligations that we place on them. But when it comes to the Parliamentary Contributory Pension Fund, we do not follow the rules laid down for others or for schemes in the outside world. I concede immediately that my mind and the minds of others have been concentrated by errors that the parliamentary fund has made concerning many members of the fund and their pensions. However, I do not want to detail all that in this debate. Suffice it to say that the pension fund made an error and that pensions have been paid incorrectly for several years to about 50 or 60 members. There has been an overpayment and a mistake concerning the guaranteed minimum pension. There is no dispute whatever that the parliamentary fund made the mistake. There is also no doubt that the error has led to financial demands to pay back and new reduced pensions. Although those errors are not insignificant factors, they have simply spurred this amendment. They are a part of that case, which will be decided in other ways, and I do not want to go into individual cases at this point. But I am told that the fund made the error because it relied on the advice of HM Revenue and Customs. One might think that the fund must have had its own skilled pensions advice available to it, but the truth is that it did not. I am told that, until very recently, the fund employed no professional pensions expertise. As extraordinary as it might seem, the fund was run by the Fees Office. As the Treasury took the view that the cost of professional pensions expertise was unnecessary, no such expertise was available. It is to the credit of the pension fund chairman and the other trustees that that position has changed. However, it has changed only recently. It is impossible not to come across further anomalies in the detail of the arrangements for the fund, including the arrangements for trustees, to which this amendment relates. As the Minister knows, the rules that generally apply mean that pension schemes have to ensure that at least one-third of trustees are nominated by the members. The trustees must make arrangements for the selection of member-nominated trustees, and there are a couple of stages to that appointment process. First, the trustees must ask at least the active and pensioner members for nominations. A member can nominate any other scheme member whom he believes is fit to act as a trustee of his scheme, and the nominated person must obviously give his consent. Next, the trustees have to decide on the selection process. Either a selection committee decides or, if a ballot is arranged, details of the nominated persons are put to all eligible scheme members. The members are asked to vote for whoever they believe is fit to act as a trustee. Those with the highest number of votes are thereby elected as member trustees. That is the general view. The Parliamentary Contributory Pension Fund, however, is one of a number of funds to which an exemption has been given. That should come as no surprise, because it relates to the purpose of my amendment. This fund is exempt from the trustee requirements of a normal pension scheme. No pension trustee is nominated, let alone elected, by the members. Trustees are, in effect, appointed by the House of Commons Whips—I was going to say the usual channels—whose pensions knowledge is encyclopaedic and renowned; it is only their vow of silence that prevents them holding forth on the technicalities of the guaranteed minimum pension and other such subjects. In so far as the trustees answer to anyone, they seem to answer to the Leader of the House, who may or may not have some knowledge of pension matters.