The Government is expected to remove the broad mandation powers from the Pension Schemes Bill when it returns to the House of Commons next week.
This follows a series of amendments made in the House of Lords, where peers voted to remove the power to mandate the asset allocation of pension schemes completely.
The pensions industry has been highly critical of the reserve powers in this Bill, which under its current wording gives the government broad powers to direct how workplace pension schemes invest members’ funds.
However it is understood that a compromise has been reached. While the Government will not remove mandation completely, the Department of Work & Pensions is looking to amend the wording of the Bill, which would modify these reserve powers, so they more closely align with the remit of the Mansion House Accord.
Previously Torsten Bell, the pensions minister, had defended the mandation clause, but said it could only be applied to the provisions agreed in the voluntary Mansion House Accord.
Sophia Singleton, President of the SPP says: “As the Pension Schemes Bill reaches its final stages of consideration, we appreciate that whilst the Lords had voted for the mandation power to be removed, a practical compromise ensuring that the mandation power is brought into line with the Mansion House Accord, does demonstrate that the government has listened to the pensions industry on this vitally important issue and is a welcome, practical solution to what we acknowledge is a complex matter.”