The saga is nearing its end. Following completion of the Report stage in the House of Lords on 8 November, a new fifth version of the Bill (HL Bill 125) was published, containing the many new amendments agreed during that stage. Almost all were, of course, Government amendments. On a handful of issues, though, the Opposition pressed matters to a vote. The Government squeaked home (102 - 96) on their amendment to enable the Secretary of State to increase the proportion of MNTs on the trustee board from one-third to one-half. It had an even narrower victory (137 - 135) in defeating an Opposition amendment to require a triennial written report from the Secretary of State on the "adequacy" of funds provided for the Financial Assistance Scheme.

More remarkably still, six Opposition amendments were actually passed, and by much more substantial margins. Four concern the Pension Protection Levies:

(1) Clause 172 (now 175) ("Initial Levy"): the period during which this levy (based on factors to be prescribed by Regs, but expected to be essentially flat-rate) alone will be imposed cannot now exceed a maximum of 12 months. (passed 147 - 106)

(2) Clause 173 (now 176) ("Pension Protection Levies"): for each financial year after the initial period, the PPF Board must impose both a scheme-based levy AND a risk-based levy. The original wording had permitted "one or both" of these: the Government wanted more flexibility, arguing for example that for small schemes, a simplified approach perhaps involving only a scheme-based levy might suffice. The Opposition, however, was determined that the risk-based levy had to be operational as quickly as possible and that it had to apply to all schemes. (passed 149 - 104)

Unfortunately, this leaves an inconsistency in Clause 176, in that para 5, which requires the Board, before the beginning of each financial year, to determine in respect of that year whether to impose both or only one of the levies, has been left untouched.

(3) The word "all" was inserted in the same Clause 173 (now 176) to ensure it applied to all schemes. (agreed nem con)

(4) Clause 175 (now 178) ("Amounts to be Raised by the Pension Protection Levies"): completely replaced by new wording, which inter alia specifies that the scheme -based levy must aim to recover the Board's total administration costs, and that the risk-based levy must amount to at least 80% of the total amounts estimated to be raised by both levies. (passed 136 - 106)

The other two Opposition amendments passed were to Clause 284 (now 287) ("Financial assistance scheme for members of certain pension schemes"):

(5) Payments from the FAS must now come entirely from public funds, with no charges, levies or contributions to be made by the private sector. Considerable dismay was expressed at the continuing refusal (or inability) of the Government to provide any more details beyond the original commitment by former Secretary of State Andrew Smith in the House of Commons on 14 May 2004 to "make available £400 million of public money" in instalments over a period of 20 years. The Government plaintively argued that this amendment would close off any contributions from the private sector to the FAS (surely always a pipe dream); the Opposition was suspicious that any leeway for arm-twisting was capable of being exploited. (passed 132 - 110)

(6) Payments from the FAS shall be made to eligible scheme members regardless of their other income or capital (ie no means testing). Again, the Government wished to retain the option, although it hoped not to have to apply it; the Opposition was distrustful and wanted to put more certainty on the face of the Bill, noting that even if Lords were allowed a debate on subsequent Regs, their only options would be to accept or reject them entirely: no amendments would be possible. (passed 139 - 117)

The Bill now moves to its Third Reading in the Lords, scheduled for Monday 15 November. Opposition peers - and indeed the Government itself - have tabled further amendments (procedure dictates this is possible only if the issue has not already been voted on); an old saying about a fat lady at the Glasgow Empire comes to mind.

Among them is one which means that under funded final salary schemes that have started winding-up prior to the establishment of the Pension Protection Fund (PPF) with an insolvent employer, may now be eligible for help from the FAS. According to a DWP press release, the Minister (Malcolm Wicks) said, "When we announced the creation of the Financial Assistance Scheme we undertook to consider the position of schemes that fell between the date of the announcement and the start of the Pension Protection Fund.

"This, together with the details on PPF eligibility we announced on Monday*, will mean that help and protection will be available right up to the minute the PPF opens its doors, without the Fund being retrospective."

* Written Ministerial Statement Monday 8 November 2004

"The Minister for Pensions (Malcolm Wicks): We are aware that trustees of schemes whose sponsoring employers are currently in financial difficulty are uncertain as to whether they would be able to be considered for PPF compensation once the PPF is launched next year.

The Government are now able to state that eligible schemes, whose sponsoring employer has already entered insolvency proceedings may still be able to receive PPF compensation. The scheme will still have to satisfy other PPF eligibility criteria - in particular, the sponsoring employer will need to have an insolvency event after the introduction of the PPF and the pension scheme must not have commenced wind up prior to that date.

The Pensions Bill provides a power that could be used to exclude schemes that have an insolvency event before the PPF is launched. We wish to make it clear that we have no plans to use this power."

As Parliament is to be prorogued on 18 November, there is almost no time for ping-pong (the official title for the stage after Third Readings** in which each House considers the other's amendments), if the Bill is not to be lost, or carried over into the next session. Nevertheless, and despite the House of Lords Order Paper indicating the Bill is scheduled to receive Royal Assent on Monday 15th, the Government appears to have determined that the Commons should have a chance to overturn the Opposition's successful amendments.

There is another possible reason - perhaps connected with matters described above - why the Bill might have to return to the Commons. A Ways and Means Resolution has been tabled for debate on Monday 15th: these are needed to authorise the levying of taxes or other charges. Normally they are tabled after Second Reading, but such is the scale of change and innovation to the Bill since it left the Commons five months ago that the need might have arisen subsequently.