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Pension Protection Fund (Investigation by PPF Ombudsman of Complaints of Maladministration) Regulations 2005

rose to move, That the Grand Committee do report to the House that it has considered the Pension Protection Fund (Investigation by PPF Ombudsman of Complaints of Maladministration) Regulations 2005. The noble Lord said: In moving the Motion, I shall speak also to the Pension Protection Fund (Reference of Reviewable Matters to the PPF Ombudsman) Regulations 2005 and the Pension Protection Fund (PPF Ombudsman) Amendment Order 2005. All these orders were laid before the House on 29 June. I understand that the Merits Committee has not sought to comment on these regulations, I am glad to say. These statutory instruments are needed to give detailed effect to the important roles and responsibilities of the Pension Protection Fund Ombudsman—the PPF Ombudsman, as he is commonly known. Your Lordships will be aware that the Government introduced a number of measures to protect better the interests of members of occupational pension schemes in the Pensions Act 2004. The key part of the Government’s approach has been the establishment of the Pension Protection Fund—the PPF. So on 6 April this year, if a   company with a defined-benefit scheme becomes insolvent and its pension fund is insufficiently funded to pay the PPF levels of benefit, members can be assured that they will still receive a meaningful level of income in retirement. I have no doubt that the PPF will aim to reach all of its decisions correctly. However, as we all know only too well, mistakes can arise in any organisation. So in establishing the PPF we have been mindful of the need to deal fairly with any problems or disputes that may arise in the course of its business. A list of the reviewable matters is therefore set out in Schedule 9 to the Pensions Act 2004. We have provided for a two-stage internal dispute process which allows those affected by the decision to dispute it. The first regulations already provide that the PPF board must review its decisions when requested. Secondly, it must reconsider those reviews if further requested. The board may also review and reconsider decisions of its own volition. Complaints of maladministration may also be referred to the board and regulations have established the procedure in this respect. If, after the internal two-stage process, a party is still not content with the outcome of the review, he may refer the matter onwards to the independent PPF Ombudsman. As for the sets of regulations, these are for the PPF Ombudsman’s investigation of reviewable matters and of complaints of maladministration that are referred to him. Given that the procedure set out in the two sets of regulations is broadly similar, I shall discuss them together. These regulations deal with applications to   the PPF Ombudsman, investigations by the PPF Ombudsman and determinations made by the PPF Ombudsman. Some of the detail set out in these regulations is similar to those governing the work of the Office of the Pensions Ombudsman, which has been in existence since 1991. There are, however, some differences between the two roles. First, the Pensions Ombudsman deals with complaints and disputes regarding pension schemes. The PPF Ombudsman deals entirely with complaints and disputes arising from the Pension Protection Fund. Secondly, the PPF Ombudsman will deal with class actions, whereas the Pensions Ombudsman does   not. This means that when carrying out an investigation the PPF Ombudsman will need to notify others who he thinks may be significantly adversely affected by his determination and he must notify them that an application has been made. This is so that they may make representations if they so wish. Finally, these regulations include a prescribed time limit for the PPF Ombudsman to reach a determination, whereas the Pensions Ombudsman has no time limits on reaching a determination. On the timings for people to make a reference and for the PPF Ombudsman to investigate and determine any such reference, the detailed regulations set those out, but provisions have also been made so that the PPF Ombudsman can in most cases accept a late reference where this is appropriate. The PPF Ombudsman has a duty to investigate a reference duly made to him. He may choose to hold an oral hearing or he may decide to carry out an investigation based on the paperwork before him. It is anticipated that most references will be paper-based, and that will be for the PPF Ombudsman to determine. At the request of the Council on Tribunals, there is the right for a party to a reference to request an oral hearing, and the ombudsman must consider such requests and explain in writing if he decides not to grant them. As part of his investigation, the PPF Ombudsman may consider evidence that was not available to the board of the PPF or to the committee of the board that undertook the second stage internal consideration of the issue. The PPF Ombudsman can also accept at any time supplementary statements in respect of a reference, and the regulations provide for the PPF Ombudsman to make a decision not to investigate in some cases. For example, he can make a decision not to investigate if a party makes a late application to him. Where the PPF Ombudsman decides to hold an oral hearing, he must fix an appropriate time and place and notify all the relevant parties providing details of where the hearing will be heard, the purpose of the hearing, and the rights of the parties. For the reaching and giving of determinations, provisions in the regulations give the PPF Ombudsman the power to direct the board to take any action including the payment of any compensation he considers appropriate. When the PPF Ombudsman makes determinations and gives directions, he must include a statement of the reasons for them. He must notify the referring party, the PPF board and people who were notified early on—those whom the ombudsman considered might be significantly adversely affected. The PPF Ombudsman may deal together with references that are the same or of similar content. He may also identify one particular person to exemplify the issues arising from the number of references. He has powers to make a single determination covering both a reviewable matter and a complaint of maladministration. The ombudsman must make available for inspection the reference and any document in respect of the reference, and, as a corollary, the regulations restrict the use of such documents and information. There are some differences between the two sets of regulations which stem from the different sorts of issues that will arise between maladministration complaints and reviews of PPF board decisions. For example, since primary legislation requires the Council on Tribunals to have oversight of the procedural rules for reviewable matters, the instrument includes provisions that relate to the council. Because some PPF board decisions need to become binding as quickly as appropriate, the time limits for some requests for reviewable matters cannot be extended. A third example is that, by their nature, provisions for determinations consequential directions are more complex for reviewable matters than for complaints of maladministration by their nature. I now come to the Pension Protection Fund (PPF Ombudsman) Amendment Order 2005. When we were making the detailed provisions in these regulations, we realised that we would need to extend the provision in Article 7 of the principal PPF Order, which was made on 15 March. That order makes provision for the ombudsman remuneration, compensation for loss of office and pension, the staff of the PPF Ombudsman, the delegation of functions, the power to obtain information and for restrictions on the disclosure of information. The provisions in the amending order deal with the restrictions on the disclosure of information. We need to permit disclosure by the PPF Ombudsman during the course of his investigations in specific circumstances. Essentially, the order enables the ombudsman to disclose information to the Council on Tribunals so that the council can exercise its functions effectively. The provisions in the order are drawn tightly, which is appropriate, but they would preclude the ombudsman from giving the council information. The council has oversight of procedure rules in the reviewal matters regulations, and has the right to attend oral hearings and sit in on any deliberations straight after a normal hearing. This is an appropriate use of the disclosure power. The amendment order also provides for people to whom the ombudsman may disclose information if he considers it necessary. That is so that he can carry out his own functions as ombudsman effectively. Without the amendment order, he would otherwise not have the power to disclose information on people who were notified of a reference. They are essentially the people whom the ombudsman considers may be significantly adversely affected by his determination. Finally, the new order makes provision for disclosure to a person providing an expert opinion or other evidence and extends the powers of disclosure to the PPF board and to the person making the reference and to a representative. In conclusion, I am satisfied that   the orders are compatible with the European Convention on Human Rights, and I commend them to the committee. I beg to move. Moved, That the Grand Committee do report to the House that it has considered the Pension Protection Fund (Investigation by PPF Ombudsman of Complaints of Maladministration) Regulations 2005.—(Lord Hunt of King’s Heath.)