Source · Select Committees · Public Accounts Committee
Recommendation 1
1
Rejected
Evidence heard from DWP, GAD, and PHSO regarding AEAT privatised pensions.
Conclusion
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 Summary
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.
Government Response
Rejected
HM Government
Rejected
The government disagrees with the Committee’s recommendation. Pension Protection Fund indexation rules are set out in paragraph 28 of Schedule 7 to the Pensions Act 2004. The indexation rules broadly reflect the legal requirements for defined benefit pension schemes, that is compensation based on benefits accrued after 6 April 1997 is increased in line with prices, capped at 2.5 per cent. The legislation came into force on 6 April 2005 when the Pension Protection Fund became operational. Therefore, as referenced in paragraph 6.5 of HM Treasury guidance, Parliamentary scrutiny of public spending, the department cannot respond further to this recommendation as to change these indexation rules would require a change in legislation and is therefore a policy matter.