The government’s Pension Schemes Bill proceeds to House of Commons

16 July 2020

The Department for Work and Pensions (DWP) has published a news story highlighting the fact that the landmark Pension Schemes Bill has passed through the House of Lords, where it was first introduced on 7 January 2020, and will be taken through the House of Commons later on in the year.

The Bill aims to provide greater protections for pension savers, and will also assist the government in its progress towards zero greenhouse gas emissions.

Pension schemes will be required to act on the recommendations of the Task Force on Climate-related Financial Disclosures, and will need to report against them. This will mean that occupational pension schemes must consider climate change as both a risk and an opportunity, and that trustees must reveal how they have done so, both to their members and to the general public.

There have been amendments to the Bill which take this concept further, as there is a new requirement for schemes to consider the government’s net zero targets, as well as the Paris Agreement goals of curbing the rise of average global temperatures, when managing their own climate risk.

Guy Opperman, Minister for Pensions and Financial Inclusion, said:

“With this Bill, we’re pushing ahead with our innovative and ambitious pensions agenda, one that delivers for the record numbers of people saving for retirement.

This government has already taken a leading global role in tackling climate change and cutting emissions. The measures introduced through this Bill will help towards protecting the planet and contribute to long-term member outcomes.

The Pension Schemes Bill is a milestone in bringing pensions into the digital age. I am looking forward to guiding it through the House of Commons.”

The government’s aim of protecting savers and making sure they are provided with the correct support and information to make informed decisions about their financial futures will be propelled by the introduction of long-awaited pension dashboards and the toughening of rules and guidance around transfers.

The Pension Regulator (TPR) will have the ability to issue penalties of up to £1 million and a variety of new criminal offences, inclusive of a new sentence of a maximum of seven years in prison for bosses who act unscrupulously and use pension schemes for their own financial gain or run schemes into the ground. It is hoped that these new measures will deter employers from making imprudent decisions relating to defined benefit schemes. TPR will have strengthened powers to take efficient and timely action in order to protect the savings of pension members.

Collective Defined Contribution (CDC) schemes are also legislated for within the Bill, which are a new type of scheme, that could potentially increase returns for millions, whilst also being more sustainable for both workers and employers.


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