Rt Hon Lord Lilley

    14. Mr. Peter Lilley (Hitchin and Harpenden) (Con): Whether public sector (a) pension schemes and (b) pension scheme members will be required to contribute to the Pension Protection Fund. [218095]

    The Minister for Pensions (Malcolm Wicks): A scheme that is eligible for protection under the Pension

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    Protection Fund will have to pay the levy regardless of whether it is a public sector scheme. However, most public sector schemes, including those with a Crown guarantee, will not come within the ambit of the PPF.

    No statutory provision requires schemes to pass on the costs of the levy to their members. How the costs of the levies are met will be for scheme trustees to decide. It is worth remembering, however, that we expect the levies to average out at about ?20 per member per annum and only ?10 in the first year.

    Mr. Lilley: I am grateful to the Minister for that reply. I understand the Government‘s reason for not asking taxpayers to underwrite the Pension Protection Fund?many taxpayers are not members of pensions funds?but how do they justify not asking members of public sector pension funds, which are underwritten by the taxpayer, to contribute to the PPF when they require members of private sector schemes to do so? Surely, we as Members of Parliament are beneficiaries of that unfair discrimination, and we all ought to contribute to the protection scheme.

    Malcolm Wicks: Let us remember that the PPF is coming into being because of the tragedy and scandal whereby pensioners are left bereft when a company goes bust and a scheme is underfunded. A common-sense comparison would suggest that most people in public sector schemes?the civil service and those in local government?are not likely to see their scheme go bust, although some non-departmental public bodies do not have a Crown guarantee and will pay a levy. Such bodies include the Arts Council, the Legal Services Commission, Remploy and the royal household.