DWP Pensions Stakeholder Update published

27 June 2014

DWP’s latest update for pensions stakeholders has some interesting news about the newly published Pensions Scheme Bill and other developments.

Here is the DWP update:

Pensions Schemes Bill - As you will have seen, in the Queen's Speech at the State Opening of the 2014 - 2015 session of Parliament on 4th June the Government announced its intention to introduce the Pensions Schemes Bill. The Bill was introduced into Parliament today. The full Pensions Bill, and explanatory note, can be found on the Pensions Schemes Bill page on the Parliament website at http://services.parliament.uk/bills/2014-15/pensionschemes.html. We will keep you updated with progress during the passage of the Bill.

The Bill establishes three, mutually exclusive definitions for pension scheme type based on the type of promise provided to members during the accumulation phase of saving about the benefits that will be available to them at retirement. Current legislation tends to polarise schemes – most clearly identifying between those which offer no promise on the one hand, and those which offer any form of promise on the other. This Bill sets out a definition of a ‘shared risk’ (or ‘defined ambition’) pension scheme, where there is a promise about some of the retirement benefits from the scheme but not all, in order to encourage pension arrangements with greater risk sharing between parties.

Other Products - Steve Webb laid a Written Ministerial Statement in Parliament announcing that the Government has published its response to the consultation ‘Reshaping workplace pensions for future generations’. The Written Ministerial Statement can be found on the Parliament website at. http://www.parliament.uk/documents/commons-vote-office/June2014/26June/26-DWP-DefinedAmbition.pdf The response document is available on GOV.UK and can be found at https://www.gov.uk/government/consultations/reshaping-workplace-pensions-for-future-generations

In Addition, the Department has published two pieces of research on Defined Ambition. The first piece of research Defined Ambition: Consumer perspectives was commissioned to understand consumer views about risk sharing in pension schemes and their thoughts on some of the DA concepts. The second, Defined Ambition: Evidence summary brings together a range of existing and new material relevant to the aims and objectives of DA. It discusses individuals thoughts on certainty over finances and attitudes to risks; employer views on hypothetical risk sharing concepts; and, intermediaries' and pension providers views on offering guarantees and risk sharing proposals.