The Pension Schemes Bill 2019 – 2021 was announced in the Queen’s Speech on 19 December 2019 and introduced in the House of Lords on 7 January 2020. Having passed through Committee stage, the Bill will move to Report stage in the House of Lords, where scrutiny will continue.
These are, however, unprecedented times and everything is fluid. Parliament has now shut down until 21 April at the earliest to combat the spread of coronavirus. That said, the Bill is still expected to come into force, even if this is later than originally envisaged.
Key provisions aim to ensure that there will be criminal sanctions for bosses who put retirement incomes at risk and that pension savers will be provided with more holistic information on their retirement savings via dashboards.
Issues that are expected to be the focus on future debates include:
- The new offences in Part 3 of the Bill (see our previous blog ‘Clause for concern’). When the Bill finally gets Royal Assent, The Pensions Regulator will issue, for consultation, further guidance on its approach to enforcement.
- The provisions on long-term funding and investment strategy, where it will be interesting to see if there is any impact on the proposed measures as a result of the financial effects of the current pandemic.
- Guaranteed Minimum Pension (GMP) equalisation where there have been calls to help trustees with their duty to address GMP inequalities and facilitate conversion of GMPs into non-GMP scheme benefits. Currently, the Bill does not contain any relevant provisions but the Government recognises the importance of the issue.
For the time being, pension scheme trustees and sponsors can only keep a watching brief on developments. In the words of Robert Kennedy, which seem very apt at the moment –
“Like it or not, we live in interesting times. They are times of danger and uncertainty; but they are also the most creative of any time in the history of mankind. And everyone here will ultimately be judged – will ultimately judge himself – on the effort he has contributed to building a new world society and the extent to which his ideals and goals have shaped that effort.”