Pension Schemes Bill
“To help people plan for the future, measures will be
brought forward to provide simpler oversight of pensions savings.
To protect people’s savings for later life, new laws will provide
greater powers to tackle irresponsible management of private
pension schemes. ”
The purpose of the Bill is to:
-
Support pension saving in the 21 st century, putting
protection of people’s pension at its heart.
-
Create a legislative framework for the introduction of
pensions dashboards to allow people to access their information
from most pensions schemes in one place online for the first
time.
The main benefits of the Bill would
be:
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Providing more options for employers to support their
employees, including saving collectively and sharing investment
and mortality risk.
-
Enhancing the Pensions Regulator’s powers so they can
respond earlier when employers do not take their pension
responsibilities seriously, including taking tougher action
against those who recklessly risk peoples’ pension benefits,
building greater trust for saving in pensions.
-
Improving advice for savers so they can prepare for
retirement with confidence.
The main elements of the Bill are:
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Providing a framework for the establishment, operation
and regulation of collective money purchase schemes (commonly
known as Collective Defined Contribution pensions).
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Strengthening the Pensions Regulator’s powers and the
existing sanctions regime. This will include introducing new
criminal offences, with the most serious carrying a maximum
sentence of seven years’ imprisonment and a civil penalty of up
to £1 million.
-
Giving the Regulator powers to obtain the right
information about a scheme and its sponsoring employer in a
timely manner, ensuring that it is able to gain redress for
pension schemes and members when things go wrong.
-
Providing a framework to support pensions dashboards,
including new powers to compel pension schemes to provide
accurate information to consumers. This will include provisions
for the Regulators to ensure relevant schemes comply.
-
Creating regulations to set out circumstances under which
a pension scheme member will have the right to transfer their
pension savings to another scheme.
-
Improving the defined benefit scheme funding system by
requiring a statement from trustees on their funding
strategy.
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Amending the legislation for the Pension Protection Fund
compensation regime to enable the Fund to continue to apply the
compensation regime as intended and amend the definition of
administration charges.
Territorial extent and application
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The Bill's provisions would extend and apply to the whole
of the UK.
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Pensions policy is reserved in Scotland and Wales, but
devolved to Northern Ireland.
Key facts
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Automatic enrolment was introduced in October 2012 and
has boosted the pension prospects of 10 million people in just
6 years.
-
The Pensions Regulator and Scheme Funding measures are
designed to protect millions of members of private sector
defined benefit schemes, as well as approximately £1.5 trillion
held in them. To put this in context, £1.5 trillion is equal to
roughly three quarters of the UK’s annual GDP.
-
As individuals move through the labour market, they build
up multiple private pension pots depending on how many jobs
they have over their lifetime. The Department for Work and
Pensions have estimated the average person could have 11 jobs
over a lifetime.
-
The Pensions Regulator estimated there were 100,000
transfers out of defined contribution schemes in 2017-18. This
indicates the volumes of transfers that could potentially be at
risk of being scammed, and why the transfer measure in the Bill
is so important.
