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Pensions Bill

The issue of risk does not necessarily drive how to create an effective trustee corporation board. The important thing is that all the right issues are raised and discussed at that board. If the noble Baroness looks at the example of how conventional DB and DC trust-based schemes work, she will see that they are mixed, with employee-nominated and employer-nominated people. They all have the duty to act for the members—there is no question about that. But the issue is how effectively to deal with those concerns. There are two panels—one is invited to put its people on to the board and one is invited to stay at arm’s length. Issues will arise that need employer input. That is the way in which the scheme operates. It is all about information flow and how employers deal with the interface on behalf of their employees. The construct that the department has and the noble Baroness seems to have—that employers are there to be consulted but are not really part of the process—may in the long run create an ineffective organisation because it does not have all the right interests welded into its operation. Having a consultation panel is not the same as having people on the board if other consultation panels appear to dominate the scheme. I am not trying to make a case for employers dominating a scheme or doing anything other than acting in members’ interests. I should like the Government to think again about whether it is the right answer to exclude employer representatives from the panel. The experience of existing employment-based provision suggests that this is fundamentally a good process. It sometimes causes difficulties but, overall, it allows a forum in which issues can be raised. I hope that the Government are prepared to look at this again. I am not seeking to put forward an employer-dominant case; I am just concerned about the efficiency of the scheme.