I beg to move, That the Bill be now read a Second time.
This very small Bill is narrow in scope, but it will provide financial assistance and fairness to people who are terminally ill who have seen the sponsors of their pension schemes become insolvent. It will do that by changing the definition of “terminally ill” for this purpose. I thank the legislative team of the Department for Work and Pensions and my staff for their help preparing the Bill.
I think everyone in the House would agree that those who receive the devastating news that they have a terminal illness should receive as much financial help as possible in their final days. The loss of their right to pension payments is a blow that they should not have to suffer, and that is what the Bill seeks to address.
By way of background, the Bill focuses on the Pension Protection Fund and the financial assistance scheme. The Pension Protection Fund was established by the Pensions Act 2004 and pays compensation to individuals when the sponsors of defined benefit pension schemes—usually their employers—become insolvent and lack the necessary assets to pay those pensions to the level that the Pension Protection Fund would ordinarily pay. That applies to insolvency that has taken place on or after 6 April 2005. The financial assistance scheme applies to individuals whose pension schemes were unable to meet their pension liabilities in full if those schemes started to wind up between 1 January 1997 and 5 April 2005.
The Bill relates to compensation payments from those schemes made to people with terminal illness. When meeting the liabilities of pension schemes, the Pension Protection Fund can pay a one-off lump sum to someone who is terminally ill. The financial assistance scheme can start to make pension payments, but not pay a lump sum, to someone at any age with a terminal illness. The issue is the definition of a terminal illness. The Pension Protection Fund and the financial assistance scheme use the same legal definition of terminal illness, which is that a person is terminally ill
“at any time if at that time the person suffers from a progressive disease and the person’s death in consequence of that disease can reasonably be expected within 6 months.”