I applaud Guy Opperman for his 2020. He kept the Pension Schemes Bill moving , he remained unstintingly optimistic in the face of the pandemic and he weathered personal tragedy with dignity and fortitude.
He is the public face of what we do and he has committed himself to his post for the past 30 months with considerable gusto. I am rather pleased that he chooses to publish his end of term address in Money Marketing and hope that neither that fine rag or the minister , mind me republishing his work on my blog where so called pension experts hang out,
Covid hasn’t curbed huge strides in pension legislation.
Reaching the end of any year tends to bring about a period of reflection, but 2020 has been one like no other.
It would be easy to think that coping with Covid and everything it has thrown at us has been an all-consuming task, coming at the expense of everything else.
However, the business of government must continue and nowhere has that been more evident than in the pensions space, where 2020 has been a very busy year indeed.
Central to our work across the last 12 months has been the Pension Schemes Bill. It passed in the House of Commons last month and is now heading for what is known in parliament as the “ping pong” stage, ahead of hopefully receiving Royal Assent in the coming weeks.
I am immensely proud that in a year like 2020, with parliamentary time at a premium, we’ve managed to make enormous strides with such a huge piece of legislation.
The bill’s landmark proposals – from scam protection and improved governance, to delivering sustainable investment – will usher in changes to benefit this country for decades to come.
As we build back better from the pandemic, new jobs will be created to support sustainable technology across the UK. And when this happens, there will be an exciting pathway ahead for pension funds to invest in a range of investments that not only produce an appropriate return but also help get this country to net zero by 2050.
This builds on our ESG reforms that require pension schemes to take due account of climate change.
We launched a consultation in August around plans to ensure providers consider the risk of climate change on their investments. Our proposals will ensure trustees are legally required to assess and report on the financial risks of climate change within their portfolios.
UN special envoy for climate action and finance and the prime minister’s finance adviser for COP26 Mark Carney declared his support for the plans, which would require the 100 largest occupational pension schemes – those with £5bn or more in assets, and including all authorised master trusts – to publish climate risk disclosures by the end of 2022.
And in summer we amended the Bill to take this further, adding a requirement for schemes to take the government’s net zero targets into account, as well as the Paris Agreement goals of limiting the rise of average global temperatures, for the purposes of managing their own climate risk.
This ties in with our ongoing work in illiquid investments. In October, we consulted on measures to enable pension schemes to more easily invest in long-term assets, such as green technology, venture capital and infrastructure.
The government is dedicated to expanding the diversity of investments open to pension schemes – investments that not only have the potential to bring improved returns to savers, but also to help drive new investment in important sectors of the UK economy as we build back better.
Elsewhere, we’ve pushed on with pension dashboards. I’ve been vociferous in recent months in calling for robust data standards to underpin the project and legislation to facilitate their creation is included in the Pension Schemes Bill.
Everyone deserves to enjoy the retirement they have spent their working lives planning towards, and we have outlined provisions this year to help protect against callous scams intended to rob these people of their hard-earned savings.
We’ve also declared our intention to extend The Pensions Regulator’s sanctions regime – introducing the power to issue civil penalties of up to £1m and three new criminal offences, including a sentence of up to seven years in prison for bosses who run schemes into the ground or plunder them to line their own pockets.
Finally, we’ve made significant strides in terms of introducing collective defined contribution schemes. We’ve outlined a legislative framework for them, which spreads the investment risk, allowing for greater returns to members and improves schemes’ sustainability for employers.
Our achievements across 2020 will improve our pension system by making it safer, better and greener. And we’ll continue to work just as hard in 2021.