The government’s long-awaited Pension Schemes Bill has been reintroduced in parliament after the December general election put the brakes on the legislation's progress.
The bill, originally announced in the October Queen’s Speech and confirmed by the Queen in December, was placed in the House of Lords yesterday (January 7) as parliament reopened following the Christmas break.
It had already garnered cross-party support before being dropped when parliament was dissolved ahead of the December general election.
The policy includes news rules for pension dashboards, collective defined contribution schemes and new powers for The Pensions Regulator.
Supporting documents to the Queen’s Speech in December said the bill would "provide a framework to support pensions dashboards", including rules that compelled pension schemes to provide accurate information to consumers. New powers for regulators would ensure the relevant schemes complied, the document said.
The government also pledged to create a framework for the establishment, operation and regulation of CDC schemes.
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.
They are also different from traditional defined contribution plans in that they do not produce individual pension pots. They invest the savings in a larger collective pot, which provides an income to individuals during their retirement.
New powers for TPR, introduced via the bill, will make it a criminal offence to have committed “wilful or grossly reckless behaviour” in relation to a pension scheme, which will carry a prison sentence of up to seven years for company bosses responsible.
The new rules also include powers for TPR to obtain the right information about a scheme and its sponsoring employer in a timely manner, so the watchdog can ensure that it is able to gain redress for pension schemes and members when things go wrong.
Minister for pensions and financial inclusion, Guy Opperman said: “With this bill, we’re pushing ahead with our revolutionary pensions agenda and delivering for the millions of people brought into saving for later life by our reforms.
“We’re ensuring those who put pension schemes in jeopardy feel the full force of the law, transforming the way people get information about their retirement savings and introducing a new pension that could boost returns for millions.”
Charles Counsell, chief executive of TPR, said he welcomed the prompt reintroduction of the bill and looked forward to working with the DWP as it progressed.
He said the bill would allow the watchdog to be a “clearer, quicker and tougher” regulator, enforce clearer standards in DB schemes and flexibility to deter and punish “risky and reckless” behaviour.
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