Lords second reading of Public Service Pensions Bill

20 December 2012

Members of the House of Lords discussed the key principles and purpose of the Public Service Pensions Bill during second reading, yesterday (Wednesday 19 December)

Lord Newby (Liberal Democrat), government spokesperson for the Treasury, opened the debate and explained the need for a new common UK legal framework for public service pensions.

He stated: 'This bill proposes that members' benefits should be calculated on a fairer basis; namely, on an individual's career-average earnings. By following this approach, low earners will no longer be expected to subsidise the benefits of higher earners.

'The bill links normal pension age to state pension age for most members. This will automatically track changes in longevity and protect the taxpayer from the associated cost risks,' he added.

In the absence of Lord Davidson (Labour), opposition spokesperson for the Treasury, Lord Davies of Oldham (Labour) highlighted parts of the bill that needs further scrutiny, including Clause 3. 'We are concerned that Clause 3 is couched in the broadest of terms that permit the government to amend through secondary legislation public sector pension provision at any time of their choosing,' he said.

He concluded: 'We accept the need for reform of public sector pension provision, as we expressed while in government. Where we differ from the government's proposals is that we consider that public sector employees deserve greater clarity and security than the bill currently provides. It is for that reason that we look forward to a lively committee debate on the bill.'

Public Service Pensions Bill summary

The bill sets out the new arrangements for the creation of schemes for the payment of pensions and other benefits. It provides powers to ministers to create such schemes according to a common framework of requirements.

The bill provides powers to the Treasury to set specific technical details of certain requirements. It also gives powers to the Pensions Regulator to operate a system of independent oversight of the operation of these schemes.

It is intended that the powers in the bill will supersede powers in existing legislation to create schemes for the payment of pensions and other benefits.

The bill protects the benefits already earned by members of existing public service pension schemes and allows continued membership of those schemes for certain categories of person who are closest to retirement.

What is second reading?

Second reading is the first opportunity for members of the Lords to debate the main principles and purpose of the bill and to flag up concerns and areas where they think changes (amendments) are needed.

Before second reading debate takes place, a list of speakers for the debate is opened and interested members add their names to it.

The government minister, spokesperson or a member of the Lords responsible for the bill opens the debate.

Any member can speak in the debate so this stage can indicate those members particularly interested in the bill - or a particular aspect of it - and those who are most likely to be involved in amending the bill at later stages.

Second reading debates usually last for a few hours but sometimes stretch over a couple of days.

Further information

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