The UK’s new government has brought back the workplace pensions bill that its predecessor introduced in October shortly before last month’s general election was called.
The pension schemes bill was introduced in the House of Lords yesterday although the date for a first substantive debate on all aspects of the bill has not yet been scheduled.
No major differences with the bill’s predecessor have been highlighted by experts so far. Like the bill tabled in October, the new draft legislation includes provisions to enable the pension dashboard and collective defined contribution (CDC) schemes and strengthen the regulator’s powers, but does not introduce a framework for consolidation of defined benefit schemes into so-called superfunds.
The country’s main pension fund lobby group, the Pensions and Lifetime Savings Association (PLSA), today welcomed the speed with which the government has brought back the bill.
“With the reintroduction of the Pension Schemes Bill as one of its first acts following the election, we are pleased the government is prioritising the £2trn pension sector,” said Nigel Peaple, director of policy at the association.
Charles Counsell, chief executive officer at The Pensions Regulator (TPR), said it welcomed “the prompt re-introduction” of the bill.
Tyron Potts, associate and head of pensions research at Barnett Waddingham, said the reintroduction of the pension schemes bill meant the regulator would soon be in a position to launch its first consultation on a brand new code of practice for defined benefit (DB) pensions funding.
“In turn, this will provide helpful guidance around the legal obligation for DB schemes to align investment and funding approaches to a long-term objective – an obligation which TPR has in any case been encouraging schemes to look at now rather than waiting until [the legislation receives] Royal Assent.”
The PLSA’s Peaple highlighted that the bill did not provide a schedule for the planned removal of the lower earnings limit to automatic enrolment contributions, “meaning millions missing out on extra saving with employer support and tax relief”.
According to Peaple there is also room for improvement with regard to new criminal sanctions and civil fines intended to prevent scheme sponsors from deliberately evading their responsibilities.
“[C]urrent drafting is too loose and risks applying far more widely than intended,” he said.