Following the announcement in the Queen's speech that there will be a Pensions Schemes Bill, Bob Scott, Senior partner of LCP commented,
“It’s encouraging to see that the pensions dashboard will be included within Guy Opperman’s Pensions Bill. Done well, the dashboard has the potential to take engagement to the next level, offering prompts for people to keep retirement savings in mind and ushering a new dawn in pensions planning. Bringing together a complex range of financial data from a number of different providers was always going to be a challenge, but with equivalent service models up-and-running in countries across Scandinavia, as well as the likes of Australia, Belgium and Israel, the UK is right to drive through delivery of the dashboard.
“We are also pleased to see that the Pensions Bill is due to address collective defined contribution (CDC) schemes. If, as Mr Opperman has indicated, the Bill provides a way not only for Royal Mail but for other employers to introduce CDC schemes which, if the legislation is drawn up sensibly, will be attractive to employers who will see certainty of cost. Employees will be able to join a pension scheme that provides an income in retirement.
"Publication of the Pensions Bill will also enable the Pensions Regulator to release its long-awaited consultation on the DB funding code. Previously, the Regulator has shied away from using the significant powers granted to it under the 2004 Pensions Act but we expect the Bill to set out new powers which will make it easier for the Regulator to enforce its funding standards.
"We had hoped that the Pensions Bill would reveal the Government’s plans for regulating the new breed of DB consolidators. The concept of “superfunds” was first launched by the PLSA in 2017 but, although PSF and Clara have put their hats in the ring, the authorities have been unable to agree how such operations should be regulated. Consolidators can fulfil a useful role for those schemes that are not quite able to afford the full protection of a bulk annuity contract – although the original policy intention behind consolidation was for large numbers of smaller schemes to be able to achieve economies of scale as well as access to opportunities and a level of governance that they could not get on their own. We await the Government’s thoughts in that area.
"Whether we will actually see the Pensions Bill and indeed any other legislation announced today will depend on how the latest stage in Brexit unfurls in the run up to 31 October. The risk that the UK will leave the EU without a withdrawal agreement is looking increasingly likely and will bring further confusion and uncertainty to the current political landscape.”