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Pensions Bill

With respect to these two amendments, it is understandable that one might think that rights to GMPs in these occupational pension schemes derive from ““pensionable”” service and that this might be a more appropriate term to use in the legislation. However, we are dealing here, by definition, with contracted-out schemes. In these schemes, members derive rights from undertaking employment which is ““contracted out”” from the state second pension provisions. Due to the nature of the legal status of this employment and to the link with lower-rate contracted-out national insurance contributions which are payable by both employer and employee, the contracting-out legislation uses the term ““employment”” rather than ““pensionable service””. Similarly, the legislation refers to ““earner”” rather than ““member””. Therefore, while understandable in their intention, the proposed amendments do not fit with the legislation already in existence. Again I believe that we are at one in what we think should apply. I hope that explanation has given the noble Baroness some reassurance.