The Pension Schemes Bill will be scrutinised by a committee of MPs next week, and there’s the prospect of another pensions-related bill on the horizon too, if the regulator gets its way.
After a (reasonably) quiet summer, the eyes of the pensions industry will be on parliament next week as MPs return for a busy autumn period.
The Pension Schemes Bill will be scrutinised by an as-yet-unnamed committee of MPs starting on Tuesday at Portcullis House, with industry representatives giving evidence, including Pensions UK’s director of policy and advocacy Zoe Alexander.
The trade body will likely continue to push for changes to the controversial mandation rules in the current draft of the bill.
As Alexander said this week, Pensions UK is particularly concerned that the rules could “introduce avoidable risks to savers”. As a supporter of the Mansion House Accord and Compact, the trade body remains of the view that “the best way of ensuring good returns for members is for investments to be undertaken on a voluntary, not mandatory, basis”.
Changes to, or removal of, the investment direction powers over defined contribution (DC) and local authority pension schemes will be a great success for Pensions UK and the other organisations that have opposed the move.
As if all the excitement over the Pension Schemes Bill wasn’t enough, we may also be getting a Pension Reform Bill soon, too. The Pensions Regulator is in talks with the Department for Work and Pensions about legislative changes related to governance.
While some in the industry may baulk at yet more rules and regulations, this one seems to make sense. Consolidation is going to mean that, in a decade’s time, the UK pension system could be dominated by a few giant institutional providers. This will mean that regulations need to evolve to make sure the pensions rulebook is fit for the future.
Professional trustee firms and administrators are two sectors of huge systemic importance to the retirement system, so ensuring they are properly regulated is essential. Many of these firms are already engaging positively and proactively with the regulator, as they too understand the importance of a strong and fair regime for all operators, with pension scheme members and savers at the heart.
Nick Reeve is editor of Pensions Expert.
This editorial initially appeared in Pensions Expert’s Friday Takeaway email, summarising the biggest news of the week and the latest appointments. To sign up, please register for free.
