Posted by Colin Blanks on 23 November 2000 at 18:28:36:

My MP Eileen Gordon sent me this letter from Jeff Rooker, pity he got my name wrong maybe he thinks I am Tony Banks Brother !!!
As this is a general letter giving the Governments' position I make it freely available to the Cplanners site.

DEPARTMENT OF SOCIAL SECURITY
from the Minister of State
Richmond House · 79 Whitehall · London SW lA 2NS
Telephone: 020 7238 0800 · email: Ministers @ms42.dss.gsi.gov.uk · www.dss.gov.uk
Your ref: 000593 BLANOO1

POS(2)3735/71.

Eileen Gordon MP

Dear Eileen

Thank you for your letter of 23 October on behalf of Mr Colin Banks of 74 Parkway, Romford about his pension scheme.
I appreciate the concerns Mr Bank's has about his occupational pension scheme, but I hope that you will understand that it is inappropriate for me to comment on any particular scheme. However, I have some comments on occupational pension schemes in general ' which I hope he may find helpful.
Under trust law, neither the employer nor the scheme members own the assets of the pension scheme. It is the trustees who hold the assets and they are under a strict legal duty to use them in accordance with the deed setting up the trust and the scheme rules. They are answerable through the courts, if necessary, for any breach of that duty. We believe that the trust law framework continues to provide the best basis for protecting the interests of all those concerned with a pension scheme, including the pensioners and contributing members.
At present, increases to pensions in payment are at the discretion of the trustees in accordance with the rules of the scheme. The only exception is that schemes contracted out of the State Earnings-Related Pensions Scheme are required to index the Guaranteed Minimum Pension element.
The Pensions Act 1995 requires that:
· before a payment is made to an employer from a surplus, all current and future pensions in payment must be increased annually in line with the Retail Prices Index up to a maximum of 5 per cent, including pensions accrued in the past.

· trustees satisfy themselves that the use of the surplus is in the interest of the members.
Recycled Paper

E.R.
· members have been notified of the proposal in the manner required by law.

We are not requiring backdating of indexation, as it would be wrong to impose substantial extra costs on schemes which would not have had the opportunity to take those costs into account when considering their funding position. However, if a scheme is in surplus and the employer wants a payment from, the surplus, indexation will still have to be provided for past as well as future service. We believe this strikes a fair balance between the need of scheme members to maintain an adequate income stream throughout retirement and limiting costs to employers who sponsor occupational pension schemes.
In schemes where payment is permitted by the scheme rules, members have a new right of challenge to the Occupational Pensions Regulatory Authority (Opra) against the trustees' decision if they believe the statutory criteria have not been followed. Opra will then investigate the case and decide whether to allow the payment.
In schemes which do not permit a payment, Opra has the power to modify the scheme rules. The statutory criteria would be the same as for schemes which do permit payment. Opra would then decide whether to modify the scheme rules to allow a payment to be made.
Because there are many tax reliefs associated with pension schemes, there are Inland Revenue requirements regarding 'schemes, including limits on the use of surpluses. These are contained in the Income and Corporation Taxes Act 1988, introduced originally by the Finance Act 1986. They were intended to make sure that pension funds did not receive undue tax relief by holding unnecessary surpluses.
Where a scheme holds funds in excess of 105 per cent of its liabilities, it must reduce the excess if it is to retain full tax exemption. This may be done in a variety of ways including employer/employee contribution holidays, improved benefits or taxable refunds to the employer. Any plan for the elimination of a surplus must be approved by the Inland Revenue.

The Occupational Pensions Advisory Service which is located at 11 Belgrave Road, London SWl 1RB (telephone 0207-233 8080) may be able to provide independent advice to Mr Banks about his occupational pension.

I hope that this reply reassures Mr Banks that there are measures in place to protect the interest of members of pension schemes.

JEFF ROOKER MP

Posted by Robin D'Souza on 28 November 2000 at 11:32:51:

In Reply to: Letter From Jeff Rooker MP Minister of State posted by Colin Blanks on 23 November 2000 at 18:28:36:

This letter states that....
The Pensions Act 1995 requires that:
· before a payment is made to an employer from a surplus, all current and future pensions in payment must be increased annually in line
with the Retail Prices Index up to a maximum of 5 per cent, including pensions accrued in the past.

So, this argument hinges on whether the monies were removed from the Defined Benefits (C-Plan) fund BY IBM, and then paid into the
M-Plan fund to meet IBM'S obligations to that scheme. If IBM did remove the monies, - even if only in the transition to the M-Plan pot
then IBM has broken the law.

However, if the Pension Fund is a single pot that funds all schemes then this argument may not hold. Perhaps it's time we got a Lawyer!

Posted by Colin Blanks on 10 December 2000 at 11:18:53:

In Reply to: Re: Letter From Jeff Rooker MP Minister of State posted by Robin D'Souza on 28 November 2000 at 11:32:51:

When The Ombudsman's decision was overturned in the High Court I e-mailed Jeff Rooker - on 27/11/00
----------------------------------------------------
Thank you for your e-mail to DSS Ministers.

A full reply will be sent to you. We have a target of replying to correspondence within 20 working days.

Tim Elms
Private Office

------------------------------------------------------------
For the attention of Jeff Rooker MP
You recently wrote to my MP Eileen Gordon about the measures you have in place to protect the interests of members of pension schemes.
ref: POS(2)3735/71
In view of the Pensions Ombudsman being overturned by the High Court I am not reassured by your letter.
Do you have any comment ??
Colin Blanks

WEDNESDAY NOVEMBER 22 2000

Posted by Colin Blanks on 28 December 2000 at 18:26:30:

i asked Jeff Rooker to comment on the assurances he gave in the light of the Barclays Bank ruling. Here is a reply from his staff.

Department of Social Security

The Adelphi 1﷓11 John Adam Street London WC2N 6HT
Telephone 020﷓7962 8000

Mr Colin BlanksCwblanks@bigfoot.com Your Reference:
Our Ref: TOA/00/44765
Date: 28 December 2000

Dear Mr Blanks

Thank you for your e-mail of 26 November to Jeff Rooker concerning occupational pension surpluses. I am sorry that the Minister has not been able to reply to you personally, but I hope you will understand that he receives a great deal of correspondence on a variety of subjects and it is not possible for him to reply to each letter individually. I have been asked to reply and I apologise for the delay in doing so.

You are particularly concerned about the High Court ruling on pension fund surpluses made in favour of Barclays Bank Plc.

As I am sure you will appreciate, Ministers and officials are unable to comment on the merits of any court ruling. Having said that, I can assure you that Ministers are aware of the concern that has arisen because of the High Court's ruling and are considering the implications for other pension Schemes.

As Jeff Rooker explained in his recent letter to Eileen Gordon, under trust law, neither the employer nor the scheme members own the assets of the pension scheme. It is the trustees who hold the assets and they are under a strict legal duty to use them in accordance with the deed setting up the trust and the scheme rules. They are answerable through the courts, if necessary, for any breach of that duty. The Government believes that the trust law framework continues to provide the best basis for protecting the interests of all those concerned with a pension scheme, including the pensioners and contributing members.

Yours sincerely

Joseph Onwuchekwa

Posted by Robin Bignall on 08 January 2001 at 20:30:10:

In Reply to: Response from Jeff Rooker posted by Colin Blanks on 28 December 2000 at 18:26:30:

I received a reply from Jeff Rooker just before Christmas, which was essentially the same as the one already posted here some months ago, reference rooker1.html