The right hon. Gentleman makes a good point. Having chaired the London borough of Barnet pension fund committee for several years, I know that while the council is by far the largest fund, there are also many admitted bodies for which it administers funds,
such as Middlesex university, academies and various charities. The crystallisation of debt that may arise if there is any vagueness in the legislation could therefore have massive impacts not only on councils, which could, perhaps, withstand the financial shock by using reserves and spreading the effects over many years, but on smaller admitted bodies, who certainly could not do that.
As we have seen in respect of Equitable Life, once a fund closes and becomes a zombie fund, all the good fund managers flee. No decent fund manager worth their salt wants to manage a zombie fund. Therefore, because of the performance of the zombie fund, the liability grows still further. The implications of crystallisation of liabilities in this context must be taken into account. I urge the Economic Secretary to explain precisely what he means when referring to closing a fund. I believe he means that one fund would remain but would have no new contributions and no new members, and a new fund would run in parallel. I urge him to make that clear.
On the issues addressed in new clause 2, I urge the Government to go further, because best practice in the public sector in respect of providing information is not enough. It is my hon. Friend the Economic Secretary’s birthday tomorrow; I think he will turn 43 years of age. I calculate that by the time he reaches the normal pensionable age of the parliamentary scheme he will have contributed some 24 years of accrued service, presuming that he is in a one fortieth, one fiftieth or one sixtieth scheme with the various contribution rates that attach to them. My hon. Friend the Economic Secretary is a man of finance and has a head for figures, so I have no doubt that he understands the pension choices he has made, but I spend a surprisingly large amount of my time explaining to teachers and others—on Saturday I spoke to a police officer—exactly how their pension works, because they do not know and do not understand.
Further requirements in terms of transparency and quantity of information are needed, therefore, because people need to make rational decisions. If we want to defuse the pension time bomb, people have to make a rational decision based on information, not supposition. A constituent of mine who is a doctor has been trying for six months to get information from the NHS about his pension contributions and likely benefits. That is simply not good enough. The Government must go further in this regard.
2.45 pm