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Postal Services Bill [HL]

I thank my noble friends for moving and speaking to the amendment. I think that it was originally grouped with Amendment 39, which we discussed earlier. It is a pity that it was degrouped, because at least if they were together there would have been some good news in our response to my noble friend; maybe that will presage what I am about to say. However, I agree with the thrust of the comments that have been made about the opportunity for people to contribute to AVCs and therefore enhance their pension provision. As we discussed in relation to Amendment 39, which was also proposed by my noble friend Lord Clarke, members of the RMPP have been able to make additional voluntary contributions to the RMPP, which will provide them with a top-up to the pension that they will receive on retirement, including through the purchase of additional years of service. The Government’s intention is that accrued rights in respect of AVCs related to the purchase of added years accrued up to the qualifying time can be transferred to the Government. We are in discussions with the trustees concerning the practical arrangements for effecting such a transfer. I understand that particular concerns have been raised in relation to members who, as at the qualifying time of 16 December 2008, were still making contributions in respect of an existing AVC contract for the purchase of added years. I assure noble Lords that, for members in that position, their contracts in respect of AVCs are not changed by the Government’s proposals. I think that there was a concern that if they were broken and people had to contract again, given that they were older when they did that, the terms would be less favourable. In other words, they will be able to continue contributions under their existing contracts on the same basis after the qualifying time as they did immediately before. All that is changing is that rights that they had accrued under that contract prior to the qualifying time will be transferred to the Government together with their qualifying accrued rights in respect of their core scheme benefits. The rights that they accrue under the contract after the qualifying time will remain with the RMPP, as at present. I hope that this clarification is helpful in explaining why Amendments 43 to 45 are not required. More generally, the amendments would provide all members of the new government scheme with the opportunity to accrue additional rights under that scheme, in addition to the qualifying accrued rights transferred from the RMPP. The Government cannot support this outcome. The new government scheme will, exclusively, contain historic liabilities incurred before the qualifying time. To safeguard the interests of taxpayers, while also providing certainty to scheme members, there must be a clear cut-off between the liabilities in the new public service scheme and those in the RMPP. Because the public service scheme will have no members building up further service, it will not include provisions normally associated with the accrual of new rights in the scheme, either through normal service or through additional voluntary contributions. Including the provision in respect of additional voluntary contributions proposed by the amendment would add to the complexity of the administration of the scheme, and therefore the costs to taxpayers, duplicating the existing provisions in the RMPP—which the Government are not proposing to change—potentially creating confusion for scheme members and potentially adding to the costs and risks carried by taxpayers in the long term. I stress that the fear was that if people’s accrued rights in respect of AVCs transferred to the Government they would have to start a new contract to continue building rights, and that would be a more expensive option for them. My advice is that that is not necessary and that if they have contracts they can continue with them. Part in respect of accrued rights will go to the government scheme and part will remain with the RMPP. I do not think that there is anything proposed in relation to the RMPP, although that is a matter for trustees and the sponsoring employer going forward, which would prevent people contracting anew in that scheme for AVCs going forward. I hope that assurance will enable my noble friend to withdraw his amendment.