On 1 November 2016, the Pension Schemes Bill is scheduled to have its second reading. The Bill seeks to “[protect] savers and [maintain] confidence in pensions savings” by increasing the regulation of master trust schemes and providing members of occupational pension schemes with a “level of protection equivalent to that of members of personal protection schemes”. Part one focuses on the introduction of an authorisation and supervisory regime for master trust schemes, and part two seeks to implement the Government’s intention to introduce a cap on early exit charges and ban member-borne commission charges in certain occupational pension schemes. This Library briefing provides an overview of the policy background to the provisions of the Bill and outlines a number of its clauses.Jump to full report >>
The Pension Schemes Bill [HL] was introduced in the House of Lords on 19 October 2016 and is scheduled to have its second reading on 1 November 2016. The Bill seeks to “[protect] savers and [maintain] confidence in pensions savings” by increasing the regulation of master trusts and providing members of occupational pension schemes with a “level of protection equivalent to that of members of personal protection schemes”. The Bill consists of two parts and its provisions apply to Great Britain only. Northern Ireland will bring forward parallel legislation.
Part one focuses on the implementation of an authorisation process for establishing master trusts, the Pension Regulator’s powers to operate it, and the introduction of measures intended to ensure an “orderly exit” where a scheme fails or chooses to leave the market. The provisions in part 1 would introduce:
Part two seeks to “support the Government’s intention to introduce a cap on early exit charges” in certain occupational schemes and implement its commitment to ban member-borne commission charges. It would amend existing legislation to allow regulations to be made which override the terms of certain contracts which conflict with the regulations.
The Government briefing on the Queen’s speech 2016, which was delivered on 18 May 2016, stated that a Pensions Bill would be introduced which would include provisions to: implement a new regulation regime for master trusts; cap early exit fees charged by trust-based occupational schemes; merge the Pension Advisory Service, Pension Wise and Money Advice Service into one body; and create a new financial advice body. This Pension Schemes Bill would implement the first two measures. The Government announced on 9 October 2016, that it would take forward plans to develop a single public financial guidance body responsible for delivering debt advice, money and pensions guidance to the public. It stated that it would consult further on these measures and therefore legislation to create a new body would not be in the Pension Schemes Bill.
Lords In Focus LIF-2016-0057
Author: Sarah Tudor