Pensions Bill

moved Amendment No. 78: 78: After Clause 123, insert the following new Clause— ““Financial Services Authority: duty in relation to Pension Protection Fund The Financial Services Authority must exercise its powers to regulate those bodies for which it is responsible so as to minimise the risk of compensation from the Pension Protection Fund becoming payable in accordance with Part 2 of the Pensions Act 2004 (c. 35).”” The noble Lord said: My Lords, this is to some extent a probing amendment; I apologise for moving it on Report rather than in Committee. It is prompted by the collapse, in particular, of Lehman Brothers and the hole that that exposed in its pension fund. Clearly, I do not need to tell noble Lords that there must be a considerable danger that other high-rolling banks’ pension funds will also be at risk. It struck me as I studied those reports and thought about the Lehman Brothers pension fund that organisations regulated by the Financial Services Authority, more than almost any other more traditional businesses, can go so fast from feast to famine. They can be in a situation, as Lehman Brothers appears to have been, where they are making large profits and large bonuses are being declared, and then suddenly go into administration. There are reports that there may be a deficit of as much as £100 million in the Lehman Brothers fund. I know that there have been some reassuring noises that it will not be as much as that, but it is public knowledge that it is being considered for admission to the Pension Protection Fund. The spirit of the amendment is that there should be some duty or extra responsibility on the FSA to be aware of how quickly banks can go into deficit. There is also of course a large deficit in the pension fund of Northern Rock. I suggest that this issue should at least be drawn to the FSA’s attention, when these situations develop so fast. I ask the Minister if he has information to give us, particularly on the Lehman Brothers pension fund. I beg to move.