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Dept for Work and Pensions

Answer

Mr. Woodward: To ask the Secretary of State for Work and Pensions what plans the Government have to re-instate the full guaranteed minimum pension for members of final salary schemes where the assets of the scheme are insufficient to buy the full amount of guaranteed minimum pension when the scheme is wound-up. [144076] Malcolm Wicks: Members of contracted-out occupational pension schemes can already, in certain circumstances, have some or all of their state scheme rights restored for the period they were contracted-out. Deemed buyback--the mechanism for restoring members' guaranteed minimum pensions--was introduced as part of the Pensions Act 1995. Deemed buyback can be applied when the date the scheme started to wind up is on or after 6 April 1997. It is dependant on the scheme meeting certain conditions. Where deemed buyback applies, the Inland Revenue can accept a lower amount from underfunded schemes than it would normally cost to restore the individual's rights in the state scheme. The actual transfer value held for each scheme member for whom deemed buyback applies is paid to the Inland Revenue, with the result of either the remainder being "deemed", or the member's rights being partially instead of fully restored, thereby extinguishing the scheme's liability to provide the member with contracted-out benefits. The final decision to buyback into the state scheme will be taken by the individual scheme member.

Secondary information

Type

Written question

Reference

415 c1096W; 144076

Session

2003-04

Subjects

Workplace pensions Pensions Pension rights

Link

View this Written question on www.publications.parliament.uk