COMMITTEE FOR SOCIAL DEVELOPMENT
Simon Hamilton MLA
Chairperson
Social Development Committee Report - Legislative Consent Motion
Pensions Bill
MEMBERSHIP AND POWERS
1. The Minister for Social Development is to table the following Legislative Consent Motion for debate in the Assembly:
“That this Assembly endorses the principle of the extension to Northern Ireland of provisions of the Pensions Bill dealing with the financial assistance scheme and contributions towards cost of judicial pensions etc.”
1. The Committee agreed to prepare a short Report to be sent to all MLAs in advance of the debate. This is attached and includes a summary of the Committee’s consideration of the Legislative Consent Motion; Departmental correspondence and the relevant minutes of evidence.
Yours sincerely,
Simon Hamilton MLA
Chairperson
Committee for Social Development
Report on the Legislative Consent Motion associated with the Pensions Bill
Contents
Background
Committee Consideration
Appendices
Minutes of Evidence
Departmental Correspondence
Other Correspondence
Background
1. The Department advised the Committee that the Pensions Bill was introduced at Westminster on 12 January 2011. The Bill contains provisions dealing with certain devolved matters. Some of these matters are the subject of a Legislative Consent Motion. These are set out below.
2. The Bill includes provisions relating to the Financial Assistance Scheme (FAS). The FAS provides financial help to people where, in certain circumstances, an occupational pension scheme is under-funded or where the employer is no longer solvent.
3. The Pensions Bill will amend provisions relating to the FAS which already apply to Northern Ireland. The Bill provides for property, rights and liabilities associated with an occupational pension scheme to be transferred to a prescribed person – the Secretary of State - rather than the occupation pension scheme manager. The Department advises that this will clarify the original policy intention.
4. The Bill will also allow the Secretary of State to legislate for so-called ill-health payments to be made under the FAS along with ordinary payments. Ill-health payments can be made to occupational pension scheme members before normal retirement age. The change does not impact on the amount paid to individuals under the FAS but will allow for simplification of the regulations.
5. The Bill also includes provisions relating to increased contributions towards the cost of judicial pensions. Two office holders covered by the judicial pension scheme are the responsibility of DSD: namely members and the President of the Appeals Tribunal.
6. The other relevant offices include the Comptroller and Auditor General and other offices which are the responsibility of DEL and OFMDFM. The Department has advised that the approval of the DEL Minister, OFMDFM for these changes has been secured.
Committee Consideration
7. The Department for Social Development wrote to the Committee on 1 March 2011 indicating that the Executive’s support was to be sought for the Legislative Consent Motion associated with the aspects of the Pensions Bill described above. The Department’s letter and accompanying explanatory information are included in the appendices.
8. On 10 March 2011, the Committee took evidence from Departmental officials on the proposed Legislative Consent Motion. The officials explained that the Legislative Consent Motion applied solely to the Financial Assistance Scheme and judicial pensions provisions of the Pensions Bill.
9. The Committee noted correspondence from the Committee for the Office of the First Minister and deputy First Minister and the Assembly Audit Committee confirming that there was no objection to the Legislative Consent Motion. It is understood that the Committee for Employment and Learning also expressed no objection to the Legislative Consent Motion.
10. The Social Development Committee agreed that it would support the Legislative Consent Motion insofar as it related to the Financial Assistance Scheme and judicial pensions provisions of the Pensions Bill as they pertained to the Department for Social Development .
The Committee also noted that the Pensions Bill includes other provisions which are set out below and which are not the subject of the Legislative Consent Motion.
11. The Bill will accelerate the equalisation of State Pension Age for men and women at 65 to April 2018 and will bring forward the increasing of the State Pension Age to 66 to April 2020.
12. The Bill abolishes payable up-rated contracted-out deduction increments and provides a power to set a date for the consolidation of the elements of State Pension to provide a single value enabling easier prediction of entitlement at retirement.
13. The Bill will implement changes to the automatic enrolment process for occupational pensions including: the introduction of an earnings trigger (£7,475); an optional waiting period for enrolment (e.g. 3 months from the start of employment) and other related measures.
14. The Bill will implement technical changes to occupational pensions and the Pensions Protection Fund following the Westminster Government’s decision to use the Consumer Price Index rather than the Retail Price Index for up-rating purposes.
15. The Bill will enable the Secretary of State to make grants to pensions advisory bodies and will introduce a service rule specifying persons to whom pensions notifications are to be sent.
16. The Department advised that it was to undertake an Equality Impact Assessment (EQIA) on these proposals. It is anticipated that following the EQIA, an Assembly Bill may be brought forward in the next mandate to enact these other provisions. The Committee noted that these other provisions are not the subject of the Legislative Consent Motion.
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