The Pension Schemes Bill has been approved in the House of Lords and will be taken through the House of Commons later this year.
There are a number of proposals in this bill that will have a lasting impact on the workplace pensions market, not least its requirement that pension schemes adopt the recommendation of the Task Force on Climate-Related Financial Disclosures (TCFD) to act against climate change.
The bill also contains important proposals to move forward legislation on the pensions dashboard.
This move was welcomed by many in the pensions industry.Barnett Waddingham associate, and policy and strategy lead, Amanda Latham said it would have a significant impact on future pension savers.
“This is a pivotal moment as climate-aligned investment takes centre stage in company pensions.
“Under the new proposals, employers and trustees will have to understand and assess how their pension scheme is contributing to climate change, and how exposed it is to climate risks, and make decisions based on these considerations.
“There’ll be more transparency for policyholders too, who previously might have been in the dark about how their contributions were impacting the planet. The new rules will mean they can see exactly how their pension is being managed and how much it is contributing to the rise in global temperature.
“Crucially, these changes mean savers can potentially have more say in their own financial future. If they’re not happy with how their pension is being managed or spot any inconsistencies between policies and actions, they’ll have a chance to speak out and can look to hold trustees to account for lining the pockets of unethical or unsustainable ventures. Putting savers in the driving seat should build more ethical, climate-conscious and sustainable schemes for the future.”