Pension Schemes Bill receives Royal Assent
15 February 2021
As previously reported by the CIPP, the Pension Schemes Bill had passed through the final Parliamentary stage, and was awaiting Royal Assent. On 11 February 2021, the Bill received Royal Assent, meaning that it is now an Act.
A press release published by the Department for Work and Pensions (DWP) confirmed that this will ensure that savers have greater protection, and will accelerate the Government’s green agenda by supporting progress towards net zero.
Guy Opperman, Minister for Pensions, said:
“This is a historic day for UK pensions, and I’m thrilled that after more than 12 months, amidst all the challenges we’ve faced, the Bill has now received Royal Assent.
This Act makes our pensions safer, better and greener, as we look to build back better from the pandemic. Its passage will reassure savers that they can, and will, have a retirement they deserve.”
The Pensions Regulator (TPR) will be granted extended powers to protect pension savers under the Act and will be able to issue civil penalties up to a maximum of £1 million. Three new criminal offences have also been introduced. Bosses who run pension schemes into the ground, or who steal from pots for their own financial gain, can be sentenced to up to seven years in prison, which it is hoped will deter employers from making rash or immoral decisions in relation to pension schemes.
The Act also discusses the long-awaited pensions dashboards, which will provide savers with the option of seeing all of their pension pots on one single platform, and allow them to explore how much they can expect to receive each month during retirement. It will also help them to discover ways in which they can potentially improve their retirement prospects.
Under the Act, pensions must play their part in the transition to a net zero future, via climate risk reporting, and amendments to requirements around pension scheme funding to improve financial sustainability.
Additionally, a new style of pension scheme is legislated for under the Act – Collective Defined Contributions (CDCs), which are typically designed in conjunction with trade unions, and have the potential to increase returns for millions of savers, as well as being more sustainable for both workers and employers.
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