WPC seeks update from new Pensions Minister

The Work and Pensions Committee (WPC) has written to the new Minister for Pensions, Laura Trott, to seek updates in a number of areas, including the state pension age review.

In his letter, WPC chair, Stephen Timms, noted that Baroness Neville Rolfe submitted the report of her independent review of the state pension age in September, requesting that, in the interest of public scrutiny, the report be published as soon as possible.

In addition to this, Timms highlighted concerns around the government’s GMP factsheet, which were previously raised by the committee earlier this year, explaining that that the WPC “continues to hear concerns from people who think they will be substantially worse off”, despite previous suggestion from the former-Pensions Minister, Guy Opperman, that “none would have been significantly worse off”.

In light of this, he requested further explanation as to what steps the Department for Work and Pensions (DWP) has taken since the new state pension was introduced to ensure occupational pension schemes give "accurate and timely" information about the impact of the new state pension on people with GMPs.

He noted that this issue has also been given "new urgency" by rising inflation, querying whether the DWP is considering a new campaign to raise awareness of the factsheet.

The’ letter suggested that rising inflation has also made finding a solution to issues around the DWP’s differing approach to paying arrears to members of the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS) “particularly urgent”.

The WPC has raised concerns on this issue previously, seeking clarification as to why a compensation cap continues to apply to FAS members, despite a similar compensation cap being lifted in relation to the PPF after being ruled unlawful following the Hughes judgement.

Timms' letter described this differing approach as a "new source of inequality”, querying whether Trott would meet with the Pensions Action Group to discuss these issues.

“The Pensions Action Group tells us that the lack of indexation on rights built up before 1997 means many are now receiving less than 60 per cent of their expected pension," he stated.

"They say their members are becoming financially distraught, affecting their physical and mental health.”

He also stated that while there is no legal requirement for the payment of interest on arrears, the WPC believes there is discretion to do so under HM Treasury guidance on Managing Public Money, requesting an update on the former minister’s work to explore whether such an approach would be appropriate.

The letter also flagged the committee’s recently launched inquiry into defined benefit (DB) schemes with liability driven investment (LDI) strategies, and its intended inquiry into wider issues affecting DB schemes next year.

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