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Guaranteed Minimum Pensions Increase Order 2008

I am grateful for the range of contributions. I shall try to deal with as many points as I can and will certainly write where I cannot. The noble Lord, Lord Kirkwood, asked why we cannot do away with the guaranteed minimum pension. The Pensions Act 2007 contains provisions which allow schemes to convert guaranteed minimum pension rights to normal scheme benefits so long as they are equivalent. That is a means of addressing the noble Lord’s question. The provisions cover also the removal of contracting-out or defined contribution schemes, which is a welcome simplification of pension arrangements. The noble Lord, Lord Skelmersdale, asked what this was all about. Where there are defined benefit schemes—previously, defined contribution schemes—and a contracting-out of SERPS, the legislation required that those contracted-out schemes provided a guaranteed minimum pension which was broadly equivalent, although not identical, to SERPS. The provision requires those defined benefit and defined contribution schemes to maintain a pension that covers the SERPS from which people have withdrawn.