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Pensions Bill

I thank the noble Baroness for tabling this amendment. I realise this is of great importance for a number of occupational pension schemes, particularly for those schemes whose rules even preclude any negotiation about changes to future benefits. In response to recommendations made by last year’s deregulatory review, the Government announced that they would regulate for overrides to enable scheme rules to be amended to reflect the 2005 change to the indexation cap for service going forward and for the proposed reduction in the revaluation cap in this Bill. In keeping with the recommendation from the independent deregulatory reviewers, Chris Lewin and Ed Sweeney, we have said that overrides would be exercisable provided trustees agree. We already have the necessary powers to make these changes by regulation under existing powers in Section 68 of the Pensions Act 1995. We are committed to introducing these new arrangements in regulations in due course, which is what we will do. In fact, we have already begun work on this. Our aim is to consult on the draft regulations later this year and to have the new arrangements in place in the first half of next year. The noble Baroness’s amendment seeks to introduce further regulations on overrides. It would not be appropriate to introduce a further regulation-making power to make changes to scheme rules when sufficient powers already exist. Furthermore, to introduce unnecessary legislation would hardly be in the spirit of the deregulatory review. As I said earlier, we already have powers to introduce what we have proposed and what we think will be appropriate in the circumstances. Further legislation to achieve that is not necessary. Moreover, if we were to adopt the amendment and regulations were made using the powers provided for in the amendment, it appears that schemes’ rules would have to be amended. The drafting of the amendment suggests that that would be compulsory. However, that is not the primary reason for asking the noble Baroness to withdraw her amendment. We have provision, and we are working on introducing regulations under it.