Shadow pensions minister Jack Dromey has said that the long awaited Pensions Bill could come out this month but will not include all the measures previously discussed.
At an Association of Member Nominated Trustees (AMNT) conference this morning (July 4), Mr Dromey said he wanted the bill to be introduced this month but noted that it would be a "quickie" bill instead of including a raft of comprehensive measures.
He said it would not include defined benefit consolidation but will instead focus on increased powers for The Pensions Regulator, collective defined contribution schemes and the pensions dashboard.
The shadow pensions minister has been working closely with pensions minister Guy Opperman on the bill.
Mr Dromey said: "DB consolidation will not be included in the Pensions Bill at this stage but this doesn’t mean that this has been kicked into the long grass."
DB consolidation has long been on the government's agenda, with the department for Work and Pensions (DWP) publishing a consultation paper in December, which closed in February.
The consultation followed a DB white paper published in March 2018, in which the government revealed plans to promote consolidation in the DB pension market, in which two thirds of the 5,600 schemes have funding shortfalls.
Mr Dromey said he had hoped that the pensions bill would have been introduced in June but has hopes it will still come out in July.
He said: "We still hope that the bill will be introduced this month as I don’t want it to plunge into the uncertainty of what will happen in September and October when government will be handling Brexit."
He added that Parliament was ready to improve and amend the bill as soon as it has been introduced and said that "the longer the delay the more chance there is of another BHS or Carillion pension scandal".
The DB white paper also set out a series of new measures for the TPR "to undertake a tougher and more proactive role".
Besides creating new legislation to introduce a criminal offence to punish those found to have committed wilful or grossly reckless behaviour in relation to a pension scheme, the government is also giving the watchdog powers to disqualify company directors, and introduce new punitive fines.
Mr Dromey confirmed that this would be included in the Pensions Bill and referred to it as the "Philip Green" law as it will introduce tougher penalties on the back of the BHS debacle.
BHS went into administration in April 2016, putting workers' retirement nest eggs at risk and TPR has been investigating the case since.
In the end, a £363m settlement with Sir Philip was reached to fund a new independent pension scheme for 19,000 former BHS workers.
At the time, the Work and Pensions committee suggested new powers for TPR, as these would provide what it described as a "nuclear deterrent" against another BHS-style scandal.
CDC schemes will also be included in the bill, according to Mr Dromey.
CDC schemes differ from DB pensions in the sense they do not guarantee certain incomes in retirement.
Instead, CDC have a target amount they will pay out, based on a long term, mixed risk investment plan.
These schemes also differ from the traditional DC plans in that they do not produce individual pension pots. Instead they invest savings in a larger collective pot, which provides an income to individuals during their retirement.
Mr Dromey said: "First and foremost we will seek to defend historic DB schemes and do not approve of the current direction of travel with the number of DB schemes dwindling.
"Unless we are careful, there could be a major problem with people entering retirement with inadequate pension schemes. This is why CDC is a step in the right direction."
Regarding the pensions dashboard, the shadow pensions minister said that it was crucial to alert people to what they are entitled to in retirement.
Pension dashboards will ensure people throughout the UK have easy access to key information about what pensions they have, who manages them and what they are worth.
The government confirmed in December it will introduce multiple pension dashboards, with the first one, developed by the Money and Pensions Service, expected in 2019.
Mr Dromey said he would prefer to have just one publicly administered dashboard.
He added: "The principle behind the pensions dashboard is a good one, even if in practical terms it will be a nightmare to make work."
amy.austin@ft.com
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