The biggest shake-up of UK pensions for decades was confirmed today
(Thursday 11th February 2021) as the Pension Schemes Bill received
Royal Assent.
The Bill, now an Act, will bolster protections for savers and
further the government’s green agenda by supporting progress
towards net zero.
Minister for Pensions, , said:
This is a historic day for UK pensions, and I’m thrilled that
after more than 12 months, amidst all the challenges we’ve
faced, the Bill has now received Royal Assent.
This Act makes our pensions safer, better and greener, as we
look to build back better from the pandemic. Its passage will
reassure savers that they can, and will, have a retirement they
deserve.
The Act will strengthen protections for pension savers by
extending the powers of the Pensions Regulator, introducing the
power to issue civil penalties of up to £1 million, alongside
three new criminal offences.
A tough new sentence has been created - with a maximum penalty of
seven years in prison - for bosses who run pension schemes into
the ground, or plunder pots to line their own pockets. This will
deter employers from making reckless decisions with their defined
benefit schemes and strengthen the Regulator’s powers to take
efficient and timely actions to protect members’ hard-earned
savings.
The introduction of pensions dashboards will hail a digital
revolution for savers, creating one single platform to more
easily access and review pension pots. Savers will be able to see
how much they can expect each month in retirement, and find out
how they can improve their retirement prospects.
The Act ensures pensions play their part in our transition to a
net zero future through climate risk reporting, and changes to
requirements around pension scheme funding to improve financial
sustainability.
The Act also legislates for the creation of a new style of
pension scheme - Collective Defined Contributions (CDCs).
Developed in cooperation with trade unions, CDCs have the
potential to increase returns for millions, whilst being more
sustainable for both workers and employers.
- Provisions for commencement of all the measures are contained
in section 131 of the Act. These timings vary depending on the
measure.
