Scottish Parliamentary Pensions Act 2009 (Consequential Modifications) Order 2009

If I may, I propose to provide your Lordships with a detailed explanation of the largely technical amendments which this order seeks to achieve. I do not think that any speech of mine has ever been described as riveting, but I am certainly clear that not many speeches on pensions made by anyone in this world have been described as riveting, unless perhaps delivered to the Institute of Actuaries. Accordingly, I apologise in advance for the thousand or so words that I am going to deliver, and I hope only that I can deliver them all in the order in which they are on the paper and resist my normal temptation, which is to speak too quickly. The order is made under Section 104 of the Scotland Act 1998, which allows for necessary or expedient changes to UK legislation in consequence of an Act of the Scottish Parliament. It is made in consequence of the Scottish Parliamentary Pensions Act 2009, which sets out updated arrangements for paying the pensions of Members of the Scottish Parliament and related officeholders. Those officeholders are the Presiding Officer and Deputy Presiding Officer of the Scottish Parliament and Scottish Ministers, including the First Minister and junior Scottish Ministers. The purpose of the Scottish Parliamentary Pensions Act 2009 is to place the arrangements for paying the pensions of MSPs and related officeholders on to a more permanent statutory footing, largely replacing transitional arrangements made at the time of devolution. The Act sets out new rules for the Scottish parliamentary pension scheme that largely take account of developments in UK pensions, tax and equalities legislation. The order makes minor amendments to ensure that from 1 September 2009, when the Scottish Parliamentary Pensions Act 2009 comes into full force, aspects of reserved pensions legislation continue to apply appropriately to the existing pension schemes for MSPs and related officeholders, further to changes brought about by the Act once this is fully commenced from 1 September this year. Prior to the Scottish Parliamentary Pensions Act 2009, the pension schemes for MSPs and related officeholders were the subject of a transitional order—the Scotland Act 1998 (Transitory and Transitional Provisions) (Scottish Parliamentary Pension Scheme) Order—made under the Scotland Act 1998. It was always intended that the Scottish Parliament would legislate to put the pension schemes of MSPs and related officeholders on to a more permanent statutory footing. Section 81(3) of the Scotland Act 1998 envisages the Scottish Parliament legislating to replace the transitional arrangements made at the time of devolution. In addition, there have been a number of changes to UK legislation in the reserved areas of the regulation of occupational pensions, tax and equalities which necessitated amendment to the transitional order. Although Section 81 of the Scotland Act 1998 permits the Scottish Parliament to make provision for the pensions of MSPs and related officeholders by resolution, an Act of the Scottish Parliament was needed in this case to bring about the necessary changes to the transitional order. The Scottish Parliamentary Pensions Act 2009 continues the Scottish parliamentary pension scheme, subject to new rules set out in Schedule 1 to that Act. These new rules contain provisions for both MSPs and officeholders. The separate unfunded scheme for First Ministers and Presiding Officers set out in the transitional order is continued but is closed to new members, who will be covered by the new rules of the Scottish parliamentary pension scheme. The two amendments in the Section 104 order are of a technical nature. They are required to ensure that certain reserved regulatory controls continue to apply appropriately to the Scottish parliamentary pension scheme and the existing First Minister and Presiding Officer pension scheme, once the Scottish Parliamentary Pensions Act 2009 is fully in place. The first amendment is to Section 11(7) of the Pensions Act 1995 and ensures that the Pensions Regulator continues, in limited circumstances, to have the power to adapt, amend or repeal the legislation that contains the rules of the Scottish parliamentary pension scheme and the First Minister and the Presiding Officer pension scheme. The second amendment is to Section 249A(3) of the Pensions Act 2004, which requires the trustees or managers of occupational pension schemes to establish and operate internal controls. Section 249A(3) sets out various types of schemes that are exempt from that obligation. That includes schemes which are established under an enactment and are guaranteed by a public authority, and the Scottish parliamentary pension scheme, as currently constituted, falls within this exemption. Further to the Scottish Parliamentary Pensions Act 2009, the Scottish parliamentary pension scheme will not be covered by that exemption as it will not be a scheme guaranteed by a public authority. Therefore an amendment adding the Scottish parliamentary pension scheme into the list of exempt schemes at Section 249A(3) is required. The First Minister and Presiding Officer pension scheme does not require an equivalent amendment, as it is a pay-as-you-go scheme and as such is already exempt under Section 249A(3)(b). Noble Lords may also wish to note that, in addition to this order, it is proposed that two sets of regulations will be made by UK Ministers, further to the Scottish Parliamentary Pensions Act 2009. The Department for Work and Pensions is currently consulting on drafts of these regulations and will take forward the Occupational Pension Scheme (Scottish Parliamentary Pensions Act 2009) Regulations and the Occupational Pension Scheme (Public Service Pension Schemes) Regulations. The latter of these two sets of regulations will be made jointly by the Department for Work and Pensions and HM Treasury. The Scottish Parliamentary Pensions Act 2009 was the product of a committee Bill brought forward by the Scottish Parliament. It is intended that the newly appointed fund trustees of the Scottish parliamentary contributory pension fund will issue guidance to the members of the Scottish parliamentary pension scheme on the new scheme rules, which are effective from 1 September 2009. This order demonstrates the Government’s commitment to working with the Scottish Parliament to make the devolution settlement work. I hope noble Lords will agree that this order is a sensible use of the powers in the Scotland Act and that the practical result is something to be welcomed. I commend the order to the Committee.