Major draft occupational pensions legislation introduced by the UK government two weeks ago looks set to be left in the starting gates as a result of yesterday’s vote for an early general election.
By a wide margin, the House of Commons yesterday approved legislation paving the way for a December election. The bill still needs to pass through the House of Lords, which is expected to approve it, and parliament is expected to be dissolved on 6 November.
Yesterday’s developments have already led to the cancellation of the second reading of the Pension Schemes Bill in the House of Lords, which was due to take place today. A hearing this morning in the House of Commons Work and Pensions select committee to question executives of Clara Pensions, Pension SuperFund and Pension Insurance Corporation, was also scrapped.
A spokeswoman for the committee apologised for the lack of notice, saying: “We’re reacting to event as best we can here…we’ll be back at that issue in the new parliament, for sure”.
The Pension Schemes Bill was announced in the Queen’s Speech on 14 October and introduced in the House of Lords the next day for its first reading. An initial debate on the bill would have happened during today’s second reading.
However, a December election “pulls the curtain down on the government’s Pension Schemes Bill,” said David Everett, partner at pensions consultancy LCP.
“In so doing, “ he added, “[it] throws completely up in the air work that has been underway, in one form or another, on a pensions bill since David Cameron was prime minister.
“No matter how you look at it, this December’s general election has delivered yet another hiatus for occupational pensions policy delivering further uncertainty for trustees, scheme sponsors and members,” he said.
The bill, which had been keenly awaited, includes provisions to introduce a collective defined contribution (CDC) framework, enable pension dashboards, and grant new powers to The Pensions Regulator to tackle corporate misbehaviour.
According to Everett, even if Boris Johnson returns as prime minister following a general election it is not clear if the reform legislation will be resurrected and if so, when.
“And if he isn’t, then at the very least there is likely to be a long delay whilst the work on the bill is reviewed by the incoming administration.”
Speaking to IPE last week, Everett noted that the bill appeared to have cross-party support, and that a new government could very well introduce a bill in exactly the same form.