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Postal Services Bill [HL]

Amendment 39 to Clause 15 deals with additional voluntary contributions, commonly described as AVCs. The only purpose of AVCs is to help people have a better retirement. They are provided either through the pension scheme itself or by insurance companies. My Amendment 39 seeks to add to Clause 15(2)(b) the words, ""other than additional voluntary contributions paid to acquire money purchase benefits (as defined in section 181 of the Pension Schemes Act 1993 (c. 48))"." Additional voluntary contributions under the Royal Mail pension plan can be used to pay for additional periods of service or to buy additional pension on a money purchase basis. The Bill does not differentiate between them. Money purchase AVCs are linked to service and carry a surplus or deficit. The cost of buying an additional period is linked to a member’s age. Once a member agrees to buy the added years, the price is fixed. If a member of the scheme has already entered into an additional voluntary contribution contract, he or she should be permitted to continue with it. The years already purchased will be qualifying accrued rights, and so the right to continue with the contract should pass to the new public scheme, or the public scheme section of a segregated Royal Mail pension plan as it is envisaged that it will be segregated. As I say, AVCs are a very valuable part of any pension scheme. It would be useful if more attention was paid to this method of enhancing occupational pensions. I hope that the Secretary of State will recognise the value and benefits of this amendment. It is straightforward, quite simple and makes clear that years already paid for by the member will be set out as qualifying accrued rights. Added years, a contract between the member and the pension plan, and money purchase schemes should stay with Royal Mail pension plan. The right to transfer these accrued rights is important. I hope that the Secretary of State will agree that this amendment is supportive and helpful to people in the industry. I beg to move.