The Pensions Bill unveiled in today’s Queen’s Speech has been branded ‘disappointing’ by former minister Steve Webb for ignoring big issues such as oversight of DB scheme deficits, increasing contributions beyond 8 per cent and getting the self-employed saving.
Just days after the Pension Regulator’s controversial appearance before the Work and Pensions committee in relation to the BHS affair, Webb has highlighted the absence of new powers to protect pension benefits when corporate transactions take place.
Aegon criticised the bill for having no plans for legislation to protect against pension scams
Royal London director of policy Steve Webb says: “This is a very disappointing Bill. Regulators also need new powers to protect people’s pensions when corporate transactions leave workplace pension rights at risk. Unless new powers are added to the Bill during its passage through Parliament it will simply fail to address the big issues in pensions.”
“Whilst measures to improve the regulation of workplace pensions and reorganise financial guidance are welcome, the elephant in the room is the under-saving crisis in the UK, and this Bill will do little to address that problem. The DWP’s own figures show that more than 12 million people are not saving enough for their retirement and this Bill will barely scratch the surface of that problem. Urgent action is needed to get employees saving more than the statutory minimum of 8 per cent of their pay, and also to get more than two million self-employed people into pension saving for the first time.”
Hargreaves Lansdown head of pension policy Tom McPhail says: “The measures to strengthen regulation of master trusts are welcome but there is still more to be done. There are tensions in final salary schemes, where the cumulative deficits add up to an eye-watering £300bn. The conflicting interests of pension scheme members on the one hand and of shareholders on the other, exist in a state of ongoing instability. The Pension Protection Fund acts as an effective safety net, however it is funded by the same schemes it is set up to protect; with the numbers of schemes dwindling all the time, there is a risk of the snake eating its own tail.
“Ultimately, there are too many pension schemes in the UK and arguably too many regulators too. There are thousands of final salary schemes, tens of thousands of money purchase schemes, and dozens of Master Trust and Sipp providers, some of which may not be sustainable in the long term. There is also an alphabet soup of regulatory bodies involved, including the FCA, TPR, DWP, HMT, HMRC, BoE, PRA and sundry government committees.”
Aegon head of pensions Kate Smith says: “I’m extremely disappointed that the government has failed to use the Queens Speech as an opportunity to tackle the ever-growing threat of pensions fraud via legalisation . We still need to look at ways for the industry, regulators and pension industry to work together to raise the profile of pensions fraud to stamp it out and protect savers.”