[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell): … Pensions legislation sets minimum legal standards that all schemes must meet, and they are designed to strike the balance between fair and workable, and having a stable DB landscape. I completely recognise the case for change that the right hon. Member for New Forest East has made today and in the past. The challenge is that it would be unreasonable to retrospectively change long-standing rules in blanket terms in a way that would put some schemes’ stability at risk, whether that is today by fundamentally changing their funding position, or in future, when we do not know what the world will look like.]

Sir Julian Lewis: If the Minister would follow the recommendation of at least giving the trustees the full power to make the decision over discretionary awards and taking it away from the company, one could be pretty sure that if the scheme went into deficit, the trustees would act accordingly.

[Torsten Bell: I will come in a second to the point that the right hon. Gentleman is making, which is about where power lies in the system. … The reforms introduced in the Pension Schemes Bill will give more trustees of such schemes the flexibility to release surplus. That will help shape the balance of power between trustees and employers when it comes to well-funded schemes. There is not nothing we can do, and the Pension Schemes Bill will make a difference, particularly for the kind of schemes being raised tonight – those which have a surplus today.

The decision to release surplus will remain entirely with the trustees. That will place them in a better position to negotiate benefit improvements as part of any release. It is entirely for trustees, working with the employer, to determine how members may benefit. Let me be really clear: if trustees wish to insist on discretionary pre-1997 indexation as a condition for surplus release, they will be entitled to do so. I expect that many will, given the discussions I have had with them. We are obviously in the early stages of that Bill; it has not passed through Parliament yet. Employers and trustees are thinking through a world where they suddenly find themselves with a surplus, and in many cases are thinking about what that means for the future of their pension scheme. These reforms recognise trustees’ and members’ understandable frustration with the status quo, but also the diverse circumstances of DB [Defined Benefit] schemes. ...]