It feels like a Pavlovian reaction to want to write an opinion piece just because the Government has issued the plan for some primary legislation in relation to pensions. We’ve been waiting an eternity for this Bill and its announcement is significant. I’ll briefly summarise what’s in and what’s not but, before we continue, we should acknowledge that despite its significance this Bill may never see the light of day. Although there is probably cross the house consensus for most of the initiatives here it will need a government with a majority to get through a fractious Parliament – we don’t have that. It will also need Parliamentary time to debate and pass – and we may not get that with a general election very possible.
What’s in? Powers for the Pensions Regulator. This will involve bringing in the rules so that The Pensions Regulator will have more powers to receive information in relation to corporate transactions. They will also be able to fine people up to £1m or send them to prison for seven years for “wilful or reckless behaviour” in relation to a defined benefit (DB) scheme, whatever that means.
The Bill also sets out the framework to create the Pensions Dashboards. These will be provided to allow people to see all their pension savings in one place initially via the Money and Pensions Service but some private dashboards are also expected. All schemes will have to provide data to be included. All schemes does mean every scheme in the country, no exceptions.
On collective Defined Contribution (CDC), the Bill shows the Government’s intention to press ahead with legislation to allow the creation of CDC schemes, the first of which will be the Royal Mail negotiated with its staff.
Changes to transfer rules also make it into the Bill. In a further bid to combat pension scams there will be a review of the rules for statutory transfers. We expect this to be strengthening the requirement for a genuine employment link if the receiving scheme is an occupational scheme.
Pension Protection Fund (PPF) compensation will also be clarified.
What’s not in? DB consolidator regulations. Notably the Government has noted that it needs more time to consider how best to regulate the DB consolidators (Clara and the Pensions Superfund). This is a blow for those schemes as the prevailing view would seem to be that it would be risky to continue with a deal with a consolidator with an objective regulatory framework to adhere to.
No state pension changes are planned. This will be a disappointment for those hoping for help for the WASPI women (women against state pension inequality) but it is not a surprise they’re not catered for.
On auto-enrolment we have long awaited changes discussed two years ago to lower the starting age for auto-enrolment to 18 and scrap the qualifying earnings. These remain on the side-lines.
In conclusion, this is useful as it does give an indication of the Conservative Party’s priorities should they remain in Government. It is probably fair to say that the majority of the above would be on the agenda irrespective of the colour of our Government. We shall watch this keenly to see if this has any time for progress. We do know TPR has said if there is a delay they will issue their DB Funding Code in advance of the legislation and this announcement may give them confidence to do so.
The Chancellor of the Exchequer has given us a date for our diary of 6 November for a post-Brexit Budget. Let’s see if that happens.