This House of Lords Library Briefing has been prepared in advance of the second reading debate in the House of Lords on the Pension Schemes Bill [HL] on 28 January 2020. The briefing looks at the three principal areas the bill addresses: collective defined contribution pensions, the Pensions Regulator, and pensions dashboards.Jump to full report >>
The Pension Schemes Bill is substantively the same as the Pensions Schemes Bill introduced in the 2019 session. The 2019 bill did not progress beyond first reading before Parliament was dissolved for the 2019 general election. The Conservative Party’s 2019 manifesto included a commitment to reintroduce the bill, and the bill was included in the December 2019 Queen’s Speech.
Part 1 of the Pension Schemes Bill would establish a framework for setting up, operating and regulating collective money purchase schemes (collective defined contribution pensions) in England, Wales and Scotland. Part 2 would make provisions similar to those in part 1 for Northern Ireland.
Part 3 of the bill would give new powers to the Pensions Regulator, the UK regulator of workplace pension schemes. The purpose of strengthening the powers of the regulator is so that it can respond earlier when employers put the viability of their pension schemes at risk.
Part 4 of the bill would set up a system for pensions dashboards (consumer-friendly digital interfaces that display information about all of an individual’s pensions savings in one place). The bill would compel pension schemes to provide their savers’ data to dashboards and make other provisions allowing for the establishment of private dashboards and a state-sponsored dashboard.
The bill also contains provisions relating to: the funding of direct benefit pension schemes; pension scheme members’ right to transfer their pension savings; defining pensionable service for the purposes of calculating compensation from the Pension Protection Fund; and clarifying the definition of administration charges.
The bill has been broadly welcomed by other political parties and the pension industry. However, many commentators have noted the absence of measures they hoped would also have been included in the bill, such as expanding pensions auto-enrolment and regulation of ‘superfunds’.
Lords Library notes LLN-2020-0018
Author: Emily Haves