Pensions bill will return, govt pledges

Pensions bill will return, govt pledges
Guy Opperman, minister for Pensions and Financial Inclusion

The minister for Pensions and Financial Inclusion said he is confident the next government, independent of which party wins the general election, will bring back the pensions bill.

Speaking at the Association of Member Nominated Trustees’ Autumn Conference 2019 in London today (October 31), Guy Opperman said it was “regretful” that a general election had got in the way of the bill, but stressed it would come back as there was cross party support for it.

The Pension Schemes Bill, announced in the Queen Speech, included long-awaited rules around pension dashboards, collective defined contribution schemes, and new powers for The Pensions Regulator.

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Mr Opperman said: “I do not believe in any way whatsoever that there is any problem to a new government of any political persuasion taking this bill and taking it forward.”

The General Election will take place on December 12 after MPs backed prime minister Boris Johnson’s election bid this week.

Bills that have not been passed by the end of the session in which they were introduced – such as the Pension Schemes Bill - will fail and need to be reintroduced in the next session.

Mr Opperman added: “Whichever government is in power after December 12 in my view can and will bring forward this bill. Whilst there has been a pause, this bill does not cease to exist.

“It is very much the case that this is a cross party thing that I believe will continue long after this general election being considered.”

The Pension Schemes Bill includes rules for pension schemes to provide data to pension dashboards – which will ensure people throughout the UK have easy access to information about their pensions, who manages them, and what they are worth.

The government confirmed in December it will introduce multiple pension dashboards, with the first one being developed by the government's new guidance body, the Money and Pensions Service.

The major part of the new bill, however, addresses CDC schemes, as the document provides a framework for the establishment, operation and regulation of this new type of pension fund.

These schemes differ from defined benefit pensions because they do not guarantee a certain income 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 traditional defined contribution plans in that they do not produce individual pension pots. Instead they invest the savings in a larger collective pot, which provides an income to individuals during their retirement.

Royal Mail is the first company looking to set up one of these plans, after gaining approval from workers in April 2018.

But the pensions bill also sets out new powers for TPR.

Besides creating 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 giving the watchdog powers to disqualify company directors and introduce punitive fines.