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Postal Services Bill [HL]

I thank my noble friend Lady Turner for introducing this amendment and for all noble Lords who spoke on it. It is an important area. I also had the opportunity of meeting Unite—the pensions organisation, not the trade union, although I would be happy to meet representatives of the union as well. Amendment 40C requires that prior to the transfer of qualifying accrued rights, the Secretary of State must take certain steps to inform members of the new pension scheme about the details. In responding, I hope I do not disappoint my noble friends if I start by saying that the Government agree with the spirit of what is intended behind this amendment. It is quite appropriate that members should be made fully aware of what changes are being made and the effect that they will have on them. I would like to take the opportunity today to give some reassurance on the record. First, I would like to make it very clear that pensioners currently receiving payments will not see any reduction in their pensions. Their pension entitlement will be the same but will be paid from a different source—the new public scheme. Secondly, for members who have already left service, their accrued rights will be the same as when they left service. At the point they start to draw their pensions they will receive the same amount as they would have under the RMPP. Again, it will be paid from a different source—the new public service scheme. Finally, for active members still employed by Royal Mail, there will be no reduction in the rights that they have already built up. What will be different is that rights accrued up to the cut-off date—16 December 2008—will become payable from the new public scheme as though the member had left service on the cut-off date, with the remainder being paid by the RMPP. In other words, the total amount of pension payable to a member for service built up prior to the cut-off date will be the same, but it will simply be received from two different sources. We are absolutely committed to working with the RMPP trustees to ensure that the administrative implications are as smooth as possible—an area of concern raised by Unite—with the minimum disruption for members. Work is already under way with the trustees to discuss this and to develop a proper transition plan in the lead-up to implementation. The first condition of the amendment would be that the Secretary of State must inform all members that they will be transferred to the new scheme. Before the Government can transfer anyone they must make the order to do so with the detail of what the transfer will entail. Furthermore, under Clause 24, the Government are obliged to consult the RMPP trustees before any order is made. We will discuss this in more detail under Clause 24, but I can reassure Members of the Committee that, as part of this consultation with the trustees, the Government are committed to ensuring that proper communication is undertaken with members leading up to implementation. It is not, however, appropriate to make it a requirement on the Secretary of State. The RMPP trustees already have in place regular and effective communication with scheme members, and we are discussing what they intend to do going forward. I will certainly convey the thoughts of my noble friends on concerns that they have experienced in talking to members of the scheme. So, while the spirit of this subsection is quite appropriate, it is not sensible to put a requirement on the Secretary of State for something that may well result in duplication. Secondly, the amendment would require the Secretary of State to inform members of their accrued rights and entitlements before the transfer occurs. As I have said, members’ pension entitlements accrued up to the cut-off date are not changing under the proposals. All benefits accrued until the transfer date will remain exactly the same. We will, however, discuss with the trustees what their intentions are with regard to informing members about the transfer and its effects. Again, however, to require this in legislation may actually result in duplication. Finally, the amendment requires the Secretary of State to inform all members about the administrative consequences. This is clearly important. As I have said, we are working closely with the trustees to develop a detailed transition plan which will include discussion on the most appropriate communication to scheme members. However, I do not accept that this should be a requirement on the Secretary of State before the qualifying accrued rights have been transferred. If members are aware of the changes through communication from the trustees, it would be more sensible for the new scheme administrators to inform members of the detailed administrative mechanisms at the appropriate time, rather than the Secretary of State being required to do so prior to the transfer. There is a further important reason why I do not think these amendments are strictly necessary. The Occupational Pension Scheme (Disclosure of Information) Regulations 1996—to which my noble friend Lady Turner referred—impose disclosure obligations on the trustees or administrators of an occupational pension scheme. They apply to other public service pension schemes and we expect that they would also apply to the new scheme being set up here. This would require a copy of the documentation establishing the scheme to be available to members on request, which in this case could likely be met by virtue of the details being set out in the secondary legislation. The regulations also require that basic information about the scheme—including, for example, what benefits the scheme provides—be given to all members either before a member joins or, if that is not practical, within two months of the person becoming a member of the scheme. In conclusion, I very much agree with Members of the Committee that communication with members is critical and, for this reason, the Government have already started engaging with trustees to discuss what is appropriate in these circumstances. However, as I have explained, the amendments are unnecessary and, indeed, could well restrict flexibility and create duplication. On this basis, which I hope has been reassuring to Members of the Committee, I hope that my noble friend will not press her amendment.