Queen's Speech December 2019 - Pension Schemes Bill

Pension Schemes Bill

“Measures will be brought forward...to help people save for later life.”

The purpose of the Bill is to:

• ●  Support pension saving in the 21st century, putting protection of people’s pensions 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:

• ●  Creating a new pension scheme to give greater choice for employers and enable people to adequately save for retirement and better predict their income in later life.

• ●  Enhancing the Pensions Regulator’s powers so it can respond earlier when employers fail to take their pension responsibilities seriously, including putting lengthy jail terms on the table for reckless bosses who plunder people’s pension pots, thereby building greater trust for saving in pensions.

• ●  Providing savers with a much simpler oversight of their pensions savings by paving the way for the introduction of online pensions dashboards, giving people plain information about all of their pensions in one place for the first time.

  The main elements of the Bill are:

• ●  Providing a framework for the establishment, operation and regulation of collective money purchase schemes (commonly known as collective defined contribution pensions).

• ●  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.

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• ●  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.

• ●  Providing clearer scheme funding requirements for defined benefit schemes, and strengthening the Regulator’s scheme funding powers.

• ●  Amending the legislation for the Pension Protection Fund compensation regime to enable the Fund to continue to apply the regime as intended, and amending the definition of administration charges.

  Territorial extent and application

● The Bill's provisions would extend and apply to the whole of the UK. Pensions policy is reserved in Scotland and Wales, but devolved to Northern Ireland.

Key facts

• ●  Automatic enrolment was introduced in October 2012 and has since boosted the pension prospects of 10 million people.

• ●  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.

• ●  The Pensions Regulator estimated there were 100,000 transfers out of defined contribution schemes in 2017-18.