Curb on retrospective pension powers
15 February 2013
BMA lobbying has led to government efforts to limit sweeping retrospective powers in controversial pensions legislation.
Doctors leaders had hoped for further concessions during the Public Service Pensions Bill’s report stage in the Lords this week. However, only amendments put forward by the government were passed.
BMA head of public affairs Robert Okunnu said: 'Although the amendments do signal a movement from the government, our view is that they still do not go far enough.'
In a briefing to peers before the debate, the BMA calls for stronger amendments to curtail sweeping new powers that would allow future UK governments to make unilateral and retrospective changes to accrued benefits in public sector pension schemes.
Changes not enough
A Lords select committee, the delegated powers and regulatory reform committee, had expressed similar concerns to the BMA.
The government acknowledged these and introduced what it believed to be better safeguards.
The initial text of the bill technically could have permitted unrestricted powers to amend primary legislation but the government amendment now says such powers would be limited to only making ‘consequential’ changes or to achieve ‘consistency’.
The government amendments also introduce a ‘consent lock’ for any retrospective changes to pensions that have ‘significant adverse effects on members’. This means members of pension schemes or their representatives would have to agree to such changes.
Although the government amendments signal some positive movement, these are not enough as changes can still be made retrospectively and they may not necessarily be only consequential.
In the debate, Liberal Democrat peer Lord Newby said: ‘The government recognises that if there are insufficient protections against using these powers in an unfair way, even if we have no intention of doing so, this could damage members’ confidence in these reforms.’
Protection against 'unfair use'
He added that the amendments provided ‘an extremely strong form of protection against the unfair use of retrospective powers’ and would give scheme members a veto on any changes where they would be adversely affected.
‘The consent requirement will apply to changes that have a significant adverse effect on the pensions of all scheme members, whether active, deferred or pensioners. That means that they go further than the protections against retrospective changes in many existing schemes, including the NHS, local government and teachers’ schemes,’ Lord Newby said.
During the debate, BMA president Baroness Sheila Hollins spoke out on pension age and the importance of making sure the bill was flexible enough to take in recommendations from the Working Longer Review, on which the BMA has a place.
The BMA has argued that the review was a key component of discussions between the government and trade unions, which appears to have been ignored in the bill. However, an opposition amendment to support this was defeated.
The Lords third reading of the bill takes place on February 26.
The story so far