MPs reject proposal to make schemes carbon neutral by 2050

In its final reading of the pension schemes bill on Monday, the House of Commons voted down by a majority of 100 votes an amendment proposed by Labour MPs.

Jonathan Reynolds, shadow secretary for work and pensions, said: “This is a historic step: the first time it has ever been included in UK pensions legislation, and we all should and do celebrate that fact. 

“However, we know that with the climate emergency getting even more serious, it is possible to go even further.”

He added: “I reiterate that this is not about the government dictating to pension funds about when and whom to invest their money in, and we are not seeking to compromise trustee independence. 

“It is simply about putting a strategy in place that considers their role in meeting our climate objectives.”

However, pensions minister Guy Opperman argued that Labour’s measures would lead to bad investment outcomes.

He said: “I am afraid the reality is that Labour’s proposals would direct investment, breach fiduciary duties, and lead to divestment and negative outcomes. 

“We want the transformation of the UK economy and the retrofitting of the country to happen in a partnership with business, legislators, pension schemes and citizens, but I am afraid the amendment would negatively affect that. It would be entirely the wrong way forward.”

Among other amendments that were rejected was a measure aimed to increase the number of savers receiving Pension Wise guidance before accessing their pension pots, the proposal from the Pension Scams Industry Group restricting the statutory right to a transfer in case of a suspected scam, and specific rules to protect open defined benefit schemes.

The bill completed its third reading on Monday, the last stage in the House of Commons, and will now go back to the House of Lords for its consideration of amendments, the last step needed before it can receive Royal Assent and become law.

This article originally appeared on ftadviser.com