1 / 🎉 Today, the Pension Schemes Bill has passed Parliament – delivering pensions that are:
This thread explains all 👇 pic.twitter.com/lujbSZRliv
— Guy Opperman (@GuyOpperman) January 19, 2021
At around 5pm on the afternoon of 19th January after 4 arduous years, the Pensions Schemes Bill emerged from the House of Lord/Commons “ping pong” ready to be signed by the Queen who will give it Royal Assent. It will then be the Pension Schemes Act and not a moment too soon.
The delays in parliamentary process have had consequences. Further regulations are needed on CDC schemes, dashboards, climate change governance, regulatory powers, defined benefit (DB) scheme funding and pension transfers.
David Everett of LCP told Pensions Age
“Although this feels like the end of a long journey, in reality it is more like half-time…we expect to see a phased implementation of the new Pension Schemes Act, with the scheme funding powers almost certainly not biting until well into 2022″.
Not everything made it. Several proposed amendments, including committing schemes to net-zero carbon emissions by 2050 and mandatory Pension Wise appointments, were voted down by the Commons. the brave attempts by the peers to reduce the powers of the Pensions Regulator to intervene in the funding strategy of open pension schemes thought to have been snuffed out by the Pensions Minister. However…
Saved at the bell! – BREAKING!
The FT is today reporting that the depth of feeling from many such schemes will impact the secondary legislation now being considered.
Lady Stedman-Scott, said subsequent regulations, to be set out by The Pensions Regulator would “acknowledge the position of open schemes” but had yet to be set out. “I want to make it absolutely clear that they do not need to invest in the same way [as most closed schemes do now],” she added.
Baroness Altmann says the commitment from the Government today “removes the existential threat to Open DB schemes” that was posed in the new funding code proposals.
— Josephine Cumbo (@JosephineCumbo) January 19, 2021
TPR has still to properly report on the first consultation and the interim consultation response has drawn some sharp criticism, not least from Con Keating in yesterday’s blog
And I’d agree with Jo, that the change of tone is very much to do with converting the economic capital in our great pensions schemes into social capital.
Three cheers for democracy!
If it were done when ’tis done, then ’twere well it were done quickly
Macbeth’s advice to himself on murdering Duncan must be echoing in the heads of many civil servants and indeed politicians but there is reason for parliamentary process and the year long debate on the Pension Schemes Bill has at least flushed out the problems with new laws.
It is now up to the civil servants in the DWP to get rules on the table and there is something of a rules race going on. If I was to run a book, I would have the rules on TCDF reporting as first to be consulted on, followed shortly after by the CDC secondary regulations. We can’t expect rules on TPR powers till much later in the year as we’re still to hear back on the Funding Code consultation
But one area where there is more need for urgency is on the pensions dashboard. We urgently need progress on the identification process needed to link person to pot and we need progress on the specification of the Application Programming Interface (API), that will enable data to be searched for, found and sent to the dashboard. We also need to find a way to assess the quality of data to establish which schemes are dashboard ready and how close we are to the dashboard available point. Most importantly, we need confidence in timelines of delivery, we have about as much confidence in dashboard delivery as we do of passengers using Cross Rail.
New legislation already backing up.
Like lorries in Kent, new legislation is already being parked ready for a further bill. Pensions Minister, Guy Opperman, has said that he expects there to be a further pensions bill in the current parliament, which would include DB pension superfund legislation.
We are already 13 months into the new parliament and if that legislation is not to meet the wash-up process that set back the last bill, civil servants will need to be getting some of the legislation “oven ready”.
As well as superfund legislation, it looks likely we will get legislation permitting small pots to be aggregated into bigger pots. When it comes to speed of delivery, the DWP should look to the small pots working group as an exempla.
We live in a time of quickly arranged Zoom meetings , of digital documentation and electronic signatures. Let’s hope that this feeds through into the completion of the secondary regulationss for the Pension Schemes Bill and that the sequel will be a little quicker to pass into law!
Ping but no pong!
Whatever the frustration for us commoners, the frustration for the ministers, the civil servants of the DWP and the regulators in Brighton, getting the Pensions Schemes Act over the line must have been much greater.
As the van with the
parchment paperwork, rolls down the Mall from the Westminster document department, we should congratulate them for their patience and forbearance – the Pensions Minister especially.