On the go: An amendment to the pension schemes bill could see the Pensions Regulator having to actively promote defined benefit schemes where possible.
Peers from the House of Lords tabled a number of amendments to the bill on Wednesday. One change, put forward by Labour peer Lord McKenzie, would change the Pensions Act 2004 to require the regulator to promote the membership of DB schemes as a statutory objective.
The amendment requires the government to lay before both the House of Lords and House of Commons a strategy for protecting public sector DB schemes within six months of the pension schemes bill becoming an act.
The regulator's key current statutory objectives in regard to DB pensions are to protect member benefits, reduce the risk of calls on the Pension Protection Fund, and to ensure the sustainable growth of UK employers. Adding a further aim of protecting future accrual is likely to be viewed positively by some trade unions, which have argued that the regulator's stance on risk is making DB unaffordable.
But Tom Selby, senior analyst at AJ Bell, said that, in the public sector at least, DB schemes do not necessarily need protecting.
Mr Selby said: “I’m not exactly sure what kind of extra ‘protection’ public sector schemes might need given they are among the most generous available and guaranteed by the taxpayer.
“If anything it is taxpayers who need protecting from the rising cost of supporting unfunded pension promises to public sector workers."
The pension schemes bill was reintroduced in the House of Lords on January 7, after the December general election delayed its debate in parliament.
It will enter committee stage, which is a line-by-line examination of the bill, on February 24, before passing through two more stages and then entering the Commons.
Once the bill has completed all the parliamentary stages in both houses it will receive royal assent.
Lord McKenzie also tabled an amendment forcing the government to conduct a review of the effects of the tapered annual allowance.
