My Lords, I will add a brief footnote to the powerful case made by the noble Baroness, Lady Bowles. She referred to the Railways Pension Scheme. As Secretary of State for Transport from 1995 to 1997, I am familiar with the scheme, which has grown in the intervening years to be one of the UK’s largest funds and which I believe to be well run.
I shared with my noble friend Lady Stedman-Scott the concerns of the RPS; namely, as the noble Baroness, Lady Bowles, has said, that the draft DB funding code that will emerge as a result of this legislation would oblige the various schemes under the RPS to de-risk with lower returns. As the noble Baroness has explained, these would have to be made good by the industry, if it could afford it, or its employees, or the schemes would be closed to new members.
I was encouraged by my noble friend’s helpful reply, dated 17 June, which said:
“Those employers and schemes who are already following good practice and planning for the long term should not need to change and we would not expect such schemes to require significant additional funding.”
However, I shared the letter with the RPS and, despite this, it believes that the powers in the Bill are too loosely expressed and that more specificity would ensure that the subsequent regulations got off on the right track. If the Minister cannot accept the amendment, can he make a commitment that there will be a distinction between open and closed schemes, to be followed up in the subsequent regulations? Will he ask his officials to discuss these concerns further with interested parties in an endeavour to find an acceptable way through as the Bill completes its passage through both Houses?