The ink has barely dried on the finalised Pension Schemes Bill, but already attention is turning towards the next legislation that may hit the industry.
Many of the Pension Schemes Bill’s elements require secondary legislation and industry consultations, which policymakers will be working on over the coming months.
But there are other policy issues that could require legislation in the future, including the Department for Work and Pensions’ (DWP) ongoing consultation on trusteeship and administration. Pensions Expert reported last year that the Pensions Regulator has been liaising with government about a potential Pensions Reform Bill to give it official regulatory oversight of administrators and professional trustee firms.
In addition, the Pensions Commission’s recommendations could require legislative change to address inequalities and gaps in the retirement savings system.
“The idea of having another pensions bill in this parliament, in my view, is pretty slim… There are too many other things.”
Guy Opperman
However, policy experts have warned that it is unlikely that more pensions legislation will be brought forward so soon after the Pension Schemes Bill.
Speaking at the Pensions Administration Standards Association’s (PASA) annual conference today (29 April), former pensions minister Guy Opperman said the chances of new laws to govern administration were “slim”.
In response to a question about how administration standards could be raised, he said: “I would prefer if it were a non-regulated situation, partly because time will move on. You’ve got to consult, respond, then get into secondary legislation.
“The idea of having another pensions bill in this parliament, in my view, is pretty slim. It’s possible, but will pension administration be part of it? I very much doubt it. There are too many other things.”
It could take until well into a new government’s tenure before the next big pension legislation is introduced, Opperman added. The next election must happen by May 2029 at the latest, but a new bill might not emerge until 2030 or 2031, he said.
Instead, changes could be implemented through guidance from the Pensions Regulator, Opperman suggested, as well as using industry initiatives such as PASA’s accreditation programme.
Pensions Commission unlikely to lead to further bills
Earlier this week, Lord David Willetts – a Conservative peer and president of the Resolution Foundation – told delegates at Hymans Robertson’s annual conference that fresh legislation on pensions was unlikely in the near future.
In the context of a question on implementing the recommendations of the Pensions Commission, Lord Willetts explained: “In the jostling that I’m familiar with from my time in government, there are a lot of ministers from their departments turning up asking for limited parliamentary time for their business, so a second meaty pensions bill I would have thought was nowhere near a probability. But then there are other things you can do that don’t require legislation, and that might become the debate.”
Darren Philp, director at Untamed Consulting and a former Treasury official, told Pensions Expert: “Bills have to fit with what the government is trying to achieve. As an election comes into focus, it’s unlikely this will include technical pensions legislation.
“The industry loves the drama around a Pension Schemes Bill, but we need to start implementing. Let’s get pensions dashboards working, deliver the small pots solution, and complete the Value for Money work.”
Darren Philp, Untamed Consulting
“Regarding the Pensions Commission in particular, there are some quite knotty issues to contend with – and the government would need to build consensus. Will it be in a position to legislate on this by the time the commission’s final report comes out? Arguably not given the timeframe.
“The industry loves the drama around a Pension Schemes Bill, but we need to start implementing. Let’s get pensions dashboards working, deliver the small pots solution, and complete the Value for Money work.”
Louise Davey, head of policy and external affairs at Independent Governance Group, agreed that new legislation “looks unlikely in the short term”, but added that the government could make some changes through secondary legislation, in areas such as governance and administration.
“A timely response to its recent consultation, with clear direction on trustee standards and the regulation of administrators, would be very welcome,” Davey said.
She continued: “What remains starkly absent is meaningful action on adequacy. The Pension Commission’s recommendations are eagerly awaited, but while this issue remains unresolved, more people risk reaching retirement without adequate pension provision. A clear roadmap for reform, backed by legislation at the earliest opportunity, is essential.”
With the Pensions Schemes Bill – soon to be an Act of Parliament – firing the starting gun on all this and more, for the first time in a while, industry attention will be turning away from parliament and towards putting reforms into practice.
