The House of Lords critical of lack of detail within the Pension Schemes Bill

02 February 2020

The first debate held on the Pension Schemes Bill in the House of Lords saw peers addressing several issues with its content, or lack of, in certain areas. Two big criticisms centred on its failure to discuss intentions to lower the auto-enrolment age and an absence of detail surrounding pension dashboards.

The Department of Work and Pensions (DWP) recommended that the automatic enrolment starting age should be lowered from 22 to 18 but there was no discussion of this within the Pension Schemes Bill. 

The Financial Adviser reported that Lord McKenzie said:

“A number of commentators have expressed disappointment that the opportunity has not been taken to implement the changes to auto-enrolment recommended by the 2017 review: namely, to extend the application to workers aged 18, and to remove the qualifying earnings deduction and the earnings threshold.”

Baroness Donaghy was in agreement with this and felt that more needed to be done to improve auto-enrolment to ensure that more people could benefit. She commented:

“The government should include an increase in auto-enrolment minimum contribution rates. They should support those in multiple occupations, so common in the gig economy so that their collective earnings can be counted towards eligibility for auto-enrolment. 

They should expand auto-enrolment to include the self-employed, allow 18 year-olds to join and remove the lower earnings limit, which in turn would solve the problem in relation to multiple occupations. This would lead to an additional £2.5bn in savings.”

Peers identified what they felt was a lack of detail on pension dashboards, in terms of there being stilted progression on the project and the limited scope of information that would be featured on it. The debate stretched over a period of more than four hours, and there was debate as to whether or not there should be multiple dashboards or one single publicly run dashboard. As it stands, the bill allows for multiple dashboards to be run by providers and one by the Money and Pensions Service (MaPS).

Lord Sharkey said:

“The question in my mind is whether it should be ‘dashboard’ singular or ‘dashboards’ plural. Should it be a dashboard provided only by MaPS (Money and Pensions Service), or should it be many dashboards, provided by MaPS and other qualified organisations? 

On the assumption that there will be very tight restrictions on how dashboard information is presented, and that future projections will not be allowed much variation, I see the merit in multiple dashboards. 

It seems to me that the key argument is one of reach. Allowing many dashboards will get more people to take notice and use dashboards. Restricting dashboards to MaPS risks a much smaller take-up.”

Baroness Neville-Rolfe voiced her approval of the single dashboard as it would serve to reduce costs. She commented:

“The pensions dashboard is a great digital idea. Matt Hancock would be proud of it. However, there is another problem that we will have to debate in committee: the substantial cost, and whether that is borne by employees, employers or other beneficiaries. 

I have to say that the impact assessment for the bill is impressively fat, but, unfortunately, it is difficult to understand. The various dashboard costs appear to me to tot up to well over £1bn, which is a lot of money. We must try to keep that cost down. 

Can we work up a single, secure and simple dashboard system in order to do so? Is this another area where we could see a draft statutory instrument and debate the options? And is there a case for some state help for the smallest and poorest schemes?”

CIPP comment

The CIPP is interested to see what will happen to the Pension Schemes Bill as it passes through Parliament. We will keep members informed of any updates, as and when we have them.


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