On the go: A bill that would give the Pensions Regulator approval over company dividend payments and remove the cap on compensation payments made by the Pension Protection Fund has returned to the House of Lords.
Former pensions minister Baroness Ros Altmann has taken up the mantle of getting this private member’s bill through parliament. The original legislation was introduced into the House of Lords by Conservative peer Lord Balfe last November, shortly before the general election.
The bill proposes to forbid companies from making distributions to their shareholders without the consent of both the trustees of the company’s defined benefit pension scheme and TPR, giving the watchdog control over UK corporate activity by amending the Companies Act 2006.
In addition, the bill would also amend the Pensions Act 2004 to remove the cap on members’ compensation paid by the PPF.
PPF members who have not yet reached their scheme’s normal pension age see their benefits cut by 10 per cent. The maximum total payout after this reduction is limited to £36,018 a year for a 65-year-old, which is then adjusted depending on the member’s age.
Following a landmark legal ruling, the PPF now has to upgrade the pensions of any member who receives less than half of their original entitlement due to the cap.
David Everett, partner at LCP, said he does not “expect this bill to become law, but what it may well do at committee stage is draw out the government’s position on these issues”.
