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Occupational Pension Schemes (Levy Ceiling) Order 2009

Indeed, although I do not think that anything is scheduled to be brought forward in the immediate future. The noble Lord asked me to confirm the numbers, and I am sorry if I went a little quickly earlier. Let me look first at the pension protection levy for 2008-09. It was set at £675 million, part of it as a risk-based assessment and part on a scheme basis at roughly an 80:20 split. In 2009-10, as I indicated, the proposal is for a £700 million levy that is designed to meet the commitment of the PPF to keep the levy in real terms, which is what it does. On the levy ceiling, in 2007-08 it was £804 million, in 2008-09 it was £833 million, and for 2009-10, as we have discussed, it is £863 million. I believe that the odd numbers at the end are derived just from the arithmetic of that percentage increase, but if they are other than that, I shall let the noble Lord know. He also asked about the levy ceiling in 2005-06. No levy ceiling was applied in the first year of the levy. The noble Lord, Lord Oakeshott, raised important points about recent reports, the 7,800 series, and projections for scheme deficits. As he acknowledged, it is important that we look at those for the long term. Liquidity is the key issue for the Pension Protection Fund. As my colleague said in another place and as was touched on earlier, there is sufficient liquidity in the PPF, even testing it against some quite severe economic scenarios, to continue to pay benefits for many years to come—I think it is about 20 years. On the request made of the Minister of State, when she said that she would consider what could be done, the data is driven by the PPF and we need to be mindful of its confidentiality, but we are in touch with the PPF to see how that matter might be taken forward. The noble Lord, Lord Oakeshott, talked about pre-packs and the current trend. It is important to remember that pre-packs require the agreement of all creditors, including the pension scheme, but he is quite right that we need to ensure in all these things that the pension scheme should be treated fairly. He raised an issue that has been raised before: should the Government effectively underwrite the pension protection scheme? We do not believe that it is necessary to do that; we have not been asked to do that by the Pension Protection Fund itself. To underwrite it would be to move us away from the principle that the fund is funded by those who are protected by it. If we went to a government guarantee, we would be drawing other people in to underwrite it. On the strength of the PPF and the role of the regulator—again, the noble Lord referred to the challenges that schemes and scheme sponsors face—the Pensions Regulator has made clear in a number of pronouncements recently that it is entirely appropriate for trustees to look at reasonable affordability when looking at recovery plans. He subsequently referred more specifically to the opportunities of back-end loading plans and, if necessary, lengthened loading plans, if that is what it takes to ensure that schemes are secure. I have not dealt specifically with the point made by the noble Lord, Lord Skelmersdale, about the current economic situation, but I think that I have dealt with it in my response to the noble Lord, Lord Oakeshott. Currently, the PPF has about £3 billion in assets and is paying out £3.7 million a month in compensation. It was designed to work in a benign environment as well as in the downturn. On the basis of the analyses that have been undertaken, it has enough cash to continue to pay benefits for at least 25 years. Part of its assessment is to keep its promise that the levy should be kept whole in real terms.