Collective defined contributions schemes could be opened up as an option for master trusts, if the new Pension Schemes Bill becomes law.
The Department of Work and Pensions has given further details about the contents of this bill, which was announced in yesterday’s Queen’s Speech.
The bill contains the legislation needed to develop the UK’s first CDC schemes. The government says it was committed to building on the operation of this Royal Mail-backed CDC pension scheme, and potentially opening the option up to master trusts and multi-employer schemes at a later date.
This Pension Schemes Bill also gives new powers to the Pensions Regulator to investigate and prosecute company executives who act recklessly with employees’ pensions. This follows a number of recent pension scandals, including BHS and Carillion.
Company directors who run plunder workplace pensions, or run them into the ground face up to seven years in jail, if the bill becomes law.
The bill also paves the way for pensions dashboards to be introduced. The DWP says the industry already trialling the first models with more expected to be tested next year.
Secretary of state for work and pensions, Thérèse Coffey says: “This Pension Schemes Bill is the next crucial step in making the UK the best place in the world to retire.
“With this legislation, we’ll ensure reckless bosses are brought to book, transform the way people get information about their retirement savings and introduce a whole new pension to the market boosting returns for millions.”