Recommendations & Conclusions
20 items
2
Recommendation
Fifty-Seventh Report - AEA Technology P…
Rejected
AEAT pension scheme members have been passed from one part of government to another, with no department taking overall responsibility for their complaints. Scheme members have raised complaints with government since 2012 covering a range of issues that involve several government organisations, including departments and regulators. The Department for Work …
Government response. The government disagrees with the recommendation, stating that complaints have already been considered by ombudsmen whose remits are statutory policy matters. It adds that the 2013 Fair Deal policy prevents similar situations from arising again.
HM Treasury
3
Recommendation
Fifty-Seventh Report - AEA Technology P…
Deferred
The AEAT case shows that there are gaps in the routes of appeal available for people raising complaints about their pensions. It is a fundamental right that 6 AEA Technology Pension Case people have appropriate and accessible routes of appeal. Ombudsman services provide a way for people to seek independent …
Government response. The government deflects the recommendation, stating that the request for the Public Administration and Constitutional Affairs Committee to consider time limits is a matter for that Committee. It does not address the recommendation to review ombudsman arrangements.
HM Treasury
4
Recommendation
Fifty-Seventh Report - AEA Technology P…
Accepted
This is another case of government not giving people enough time or support to make complex financial decisions. The government has a role to help people make good financial decisions, because of the detriment that bad choices can lead to. In the case of AEAT, it should have done this …
Government response. The government agrees to write to the Committee detailing actions to support informed financial decisions regarding pensions. It cites specific initiatives already in place, such as the Stronger Nudge to Pensions Guidance and the national rollout of the mid-life MOT, …
HM Treasury
1
Conclusion
Fifty-Seventh Report - AEA Technology P…
Rejected
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Work & Pensions (DWP), the Government Actuary’s Department (GAD) and the Parliamentary and Health Service Ombudsman (PHSO) on the pensions transferred to AEA Technology (AEAT) when it was privatised.1
Government response. The government disagrees, stating that Pension Protection Fund indexation rules are set out in legislation and changing them would require a change in law, which is a policy matter.
HM Treasury
5
Conclusion
Fifty-Seventh Report - AEA Technology P…
When the Atomic Energy Authority Act 1995 was introduced to facilitate the privatisation of AEAT and outline the pension arrangements, it required that the pension benefits in the new AEAT scheme must be “no less favourable” than the previous scheme. Around that time, other privatisations had included government guarantees on …
HM Treasury
6
Conclusion
Fifty-Seventh Report - AEA Technology P…
None of the information government provided to scheme members told them the government guarantee would be lost if they transferred their accrued benefits into the new pension scheme.7 We asked GAD why members were not told this, and whether the note it had provided at the time was therefore misleading. …
HM Treasury
7
Conclusion
Fifty-Seventh Report - AEA Technology P…
GAD’s note suggested that scheme members seek independent financial advice if they were unsure of the most suitable course of action.10 We asked GAD whether it was realistic for scheme members to get independent financial advice, particularly when GAD is a well-recognised authority on public sector pensions and members were …
HM Treasury
8
Conclusion
Fifty-Seventh Report - AEA Technology P…
Rejected
Since the scheme entered the PPF, members have lost money in real terms each year because the compensation they receive does not include rises for inflation. PPF compensation initially provides members 100% of their pension if they had already reached the scheme’s normal pension age, or 90% for those who …
Government response. The government rejects the recommendation, stating that changing the Pension Protection Fund indexation rules would require legislative change and is therefore a policy matter on which they cannot respond further.
HM Treasury
9
Conclusion
Fifty-Seventh Report - AEA Technology P…
Rejected
From 2012 onwards, scheme members raised a series of complaints with multiple government organisations and were dissatisfied with the responses they received. In July 2013, DWP produced a factsheet summarising the complaints government had received and a response to each on behalf of the government. In February 2014, it then …
Government response. The government rejects the conclusion, stating that complaints were already considered by relevant government bodies. They indicate that changing an ombudsman's remit is a policy matter, and existing 2013 Fair Deal policy prevents similar circumstances from reoccurring.
HM Treasury
10
Conclusion
Fifty-Seventh Report - AEA Technology P…
Rejected
When we asked it why no part of government had taken responsibility for the issue, DWP described pensions policy as a complex and wide-ranging area which touches on a number of departments. DWP is responsible for private sector pensions rather than public sector pensions, which it told us are the …
Government response. The government rejects the recommendation, stating that changing the ombudsman's remit is a policy matter and the 2013 Fair Deal policy prevents similar situations from reoccurring.
HM Treasury
11
Conclusion
Fifty-Seventh Report - AEA Technology P…
Rejected
Government has not commissioned any independent review into the complaints raised by AEAT members, and all of the relevant ombudsman services have said they cannot investigate the information government provided in 1996.19 PHSO told us it is unable to investigate personnel and superannuation matters, and that this would require a …
Government response. The government rejects the recommendation, stating that changing the ombudsman's remit is a policy matter and the 2013 Fair Deal policy ensures similar circumstances will not reoccur in the future.
HM Treasury
12
Conclusion
Fifty-Seventh Report - AEA Technology P…
Rejected
We asked how government can ensure that, if a similar thing were to happen again, pensioners making complaints would not be shunted from pillar to post in trying to make appeals and getting no advice or satisfaction. DWP told us that the government’s Fair Deal policy introduced in 2013 means …
Government response. The government rejects the recommendation, stating that changing the ombudsman's remit is a policy matter and the 2013 Fair Deal policy ensures similar circumstances will not reoccur in the future.
HM Treasury
13
Conclusion
Fifty-Seventh Report - AEA Technology P…
Deferred
It is a fundamental right that people should have appropriate and accessible routes of appeal. Actions by government bodies are in principle subject to judicial review through the courts, but this is an expensive process.25 Ombudsman services provide a way for people to seek independent review of their complaints without …
Government response. The government agrees with the recommendation and will conduct an independent review of The Pensions Ombudsman in Autumn 2024, noting the department can request consideration of other relevant areas during this review.
HM Treasury
14
Conclusion
Fifty-Seventh Report - AEA Technology P…
Deferred
In the case of the AEAT pension scheme, relevant ombudsman services said they were unable to properly investigate key aspects of scheme members complaints.27 Some aspects of the case could be reviewed. For example, GAD described to us how complaints about work done by individual actuaries who are members of …
Government response. The government agrees with the recommendation and will conduct an independent review of The Pensions Ombudsman in Autumn 2024, noting the department can request consideration of other relevant areas during this review.
HM Treasury
15
Conclusion
Fifty-Seventh Report - AEA Technology P…
Deferred
PHSO described to us the gaps in its remit which prevent it from providing pension scheme members with a route to appeal in this case or in similar situations. PHSO explained that its jurisdiction only allows it to investigate GAD on a very specific point about insurance companies during a …
Government response. The government agrees with the observation, stating that The Pensions Ombudsman will undergo an independent review in 2024, during which the department can request consideration of additional areas, without committing to amend PHSO's legislation.
HM Treasury
16
Conclusion
Fifty-Seventh Report - AEA Technology P…
Deferred
The Pensions Ombudsman may also be a suitable body to investigate the administration and management of pension schemes, as it is the expert in government for investigating pensions complaints.32 However, it has no remit over the role of GAD in providing information to scheme members. The Pensions Ombudsman could in …
Government response. The government agrees with the recommendation and will conduct an independent review of The Pensions Ombudsman in Autumn 2024, stating the department can request the reviewer considers other areas that would benefit from their consideration.
HM Treasury
17
Conclusion
Fifty-Seventh Report - AEA Technology P…
Accepted
The AEAT case is one where government directly provided information intended to help pension scheme members decide what to do with their accrued pension benefits. Members were only given one month to make the decision, and consider that the information provided was insufficient and misleading.36 GAD acknowledged that in the …
Government response. The government agrees with the recommendation and will inform the Committee of actions taken to support informed pension decisions. They cite recent steps like the Stronger Nudge to Pensions Guidance, national mid-life MOT delivery, and new regulations for Pensions Dashboards.
HM Treasury
18
Conclusion
Fifty-Seventh Report - AEA Technology P…
Accepted
This committee has previously found similar issues with how government provides or oversees support for people making complex or long-term financial decisions, including through the regulation of independent financial advice. Most recently, our inquiry last year into the British Steel pension scheme found that pensions regulators had failed to provide …
Government response. The government agrees with the recommendation and will inform the Committee of actions taken to support informed pension decisions. They cite recent steps like the Stronger Nudge to Pensions Guidance, national mid-life MOT delivery, and new regulations for Pensions Dashboards.
HM Treasury
19
Conclusion
Fifty-Seventh Report - AEA Technology P…
Accepted
This committee’s 2016 report on financial services mis-selling similarly concluded that the Financial Conduct Authority was not doing enough to ensure that consumers understand the financial products they are buying. The report found that even the most knowledgeable consumers can find financial services too complex to understand, which emphasises the …
Government response. The government agrees with the recommendation and will inform the Committee of actions taken to support informed pension decisions. They cite recent steps like the Stronger Nudge to Pensions Guidance, national mid-life MOT delivery, and new regulations for Pensions Dashboards.
HM Treasury
20
Conclusion
Fifty-Seventh Report - AEA Technology P…
Accepted
We asked DWP how government can ensure it gives clearer and more accessible financial advice in similar situations in future. DWP told us that changes to policy on privatisations and transfers of pensions meant that the specific circumstances affecting 33 Qq 50–51; C&AG’s Report, paras 3.10–3.11 34 Qq 44, 51 …
Government response. The government agrees, committing to write to the Committee by September 2023 to outline actions for supporting informed pension decisions through advice, guidance, and reduced complexity, alongside ongoing initiatives like the Stronger Nudge and Pensions Dashboards.
HM Treasury