Peter Lilley, Secretary of State for Social Security, said he was implementing all the main recommendations made by the Goode Committee which looked at pension law reform.
But Donald Dewar, his Labour shadow, said the raft of reforms were 'pick-and-mix' from a report that had presented a complete package.
The Government accepted, at least in part, 185 of the committee's 218 recommendations. They include:
The setting up of a pensions regulator.
Compensation for pension scheme members who are victims of fraud or whose employer becomes insolvent.
Phasing-in of minimum solvency requirements.
Giving employees the right to appoint one-third of trustees in schemes with over 100 members.
Age-related rebates to persuade people to remain contracted out of the state earnings-related pension scheme.
Abolition of the guaranteed minimum pension to replace the Serps entitlement in favour of a simple test of overall pension scheme quality.
The reforms are expected to be in place by April 1997.
The regulator will consist of a full-time chairman and six part- time members appointed by the Secretary of State and paid for by the pension schemes.
The cost is estimated at pounds 2m to set up and pounds 10m a year to run. Professor Roy Goode, whose report was published in September 1993, had recommended that the regulator should be funded by the state.
Professionals such as auditors and actuaries involved in pension schemes will have a statutory duty to report any suspicions.
Mr Lilley rejected criticism that the post had been created as recommended by the Goode Committee but the role had been emasculated. 'The regulator will have all the powers and strength that the Goode Committee recommended but will not be encumbered by bureaucracy,' he said.
Schemes will not have to report to the regulator, who will respond to complaints, but he or she will be free to initiate investigations. If the regulator finds faults in a scheme, the individuals reponsible, not the scheme, will be penalised.
If losses occur because of fraud a levy will be raised from all pension schemes in relation to their number of members.
Victims will be entitled to the lesser of 90 per cent of the missing assets or the amount required to boost the scheme to 90 per cent solvency. But they will not be entitled to money to compensate them for distress or inconvenience as recommended by Goode.
The Government rebates paid to those who give up their right to Serps will probably be higher than under current rules.
New arrangements over the splitting of pensions between couples who divorce has been delayed pending further research.
The National Association of Pension Funds broadly welcomed the White Paper but said it had some 'serious concerns'.
It called for more effective statutory arrangements for 'custody' to prevent a future Maxwell from obtaining share certificates. Ron Amy, chairman of the NAPF, said pension fund assets must be held by a properly regulated custodian independent of the employer.
Trade unions expressed disappointment at the White Paper, which they complained had left the stable door on pension abuse 'propped open'.
Many were angry that fund members were only being allowed to elect a third of trustees instead of a majority, which the unions had urged.
Mr Lilley said it was difficult to say whether the Maxwell fraud would have been prevented if these reforms had been in place. 'You can never offer a 100 per cent guarantee,' he added.
Tam Dalyell, a Labour backbencher, said: 'A whistle-blowing auditor would not have remained the late Bob Maxwell's auditor for many moons.'
View from City Road, page 33
(Photograph omitted)Reuse content