On 19 December 2019, the Queen's Speech was delivered to both Houses of Parliament. It sets out the Government's legislative priorities for the 2019-20 parliamentary session.
Background briefing notes include details of the reintroduced Pension Schemes Bill, which was first announced in the last Queen's Speech in October 2019 but fell with the dissolution of Parliament earlier this month.
The following measures are included in the Bill (all substantive proposals were in the original version too):
- New powers for the Regulator. These include ‘lengthy jail terms on the table for reckless bosses who plunder people's pensions pots’.
- Scheme funding. Measures regarding Defined Benefit (DB) scheme funding, including additional Regulator powers.
- Collective defined contribution schemes. A new pension scheme design to give greater choice for employers and enable people to adequately save for retirement and better predict their income in later life.
- Pensions dashboards. Establishing the framework for the creation of pension scheme dashboards that will “allow people to access their information from most pensions schemes in one place online for the first time”. The Pensions Regulator will have the power to ensure schemes provide information to populate the dashboards.
- Scheme transfers. Revisions to the rules to help combat pension scams.
- Pension Protection Fund (PPF) compensation. Changes to compensation rules to ensure the regime works as originally intended and to respond to the decision in Beaton v The Board of the Pension Protection Fund [2017]. It will be interesting to see if there is further tweaking in light of this week’s decision of the Court of Justice of the European Union in the Bauer case.
A draft of the Bill has yet to be published but, for further information, see –
https://www.gov.uk/government/publications/queens-speech-december-2019-background-briefing-notes.
Employers and trustees may want to start discussion with advisers on the prospective changes to the scheme funding regime. Employers should be aware of the Regulator’s new ‘moral hazard’ powers which, even now, could impact on the nature and timing of corporate activity.