The minister for pensions and financial inclusion, Guy Opperman, has stated his intention to deliver a “very substantial” bill addressing multiple areas of pensions regulation in the summer of 2019.
Speaking at the Pensions and Lifetime Savings Association's annual conference in Liverpool, the minister set out a roadmap for the next two years of pensions legislation, and said he intends to have a raft of consultations completed by the end of the year.
Opperman said that he has started “bidding” to have pensions legislation included in the Queen’s Speech, the next opportunity for departments to bring non-urgent legislation before Parliament, in May 2019 following the UK's departure from the EU.
We are in a very, very, very good place to get pensions legislation in the summer of next year
Guy Opperman, minister for pensions and financial inclusion
“My strong belief is that we are in a very, very, very good place to get pensions legislation in the summer of next year,” he said. The minister told the PLSA audience that he is “trying to kick as many consultations out of the door of the DWP” and have them concluded by Christmas.
If that bill is passed, Opperman said he believes "that the statutory regulation should be, by in large, complete for some considerable period of time,” he said.
Projects the minister stated his support for included collective defined contribution, defined benefit consolidation and superfunds, mid-life MOTs, and simplified annual benefit statements.
He also restated his commitment to the pensions dashboard, supported cross-industry work on improving transfers, and said he wanted to facilitate greater investment in alternative assets.
Consultations out by Christmas
On Wednesday, the Work and Pensions Committee published a letter from the minister that summarised his plans for a consultation and fresh legislation for CDC schemes. The consultation will be held in the autumn.
A private pensions bill would be presented to the House of Commons before going through multiple readings, committee consideration and a reports stage. It will also undergo inspection in the House of Lords.
The process will take a minimum of “six months, probably closer to nine to 12 months,” he said, observing that the end of this process lies between 18 to 19 months away.
A realistic agenda
There is little room in the government’s legislative agenda for pensions, according to some experts, owing to the time and energy that is being required to deliver Brexit.
Opperman contested this argument, pointing out that after the 2017 general election, the government immediately introduced an act of parliament to introduce the single financial guidance body.
However, he admitted to the audience that the dashboard “has taken longer than I would have liked” to develop.
Tom McPhail, head of policy at Hargreaves Lansdown, said that Opperman’s speech was “very sensible [and] very realistic”.
He said: “Government bandwidth is quite limited, he’s got a clear plan and a set of priorities.
“He’s focussing his energy on where he can make a difference."
The DWP is currently carrying out a feasibility study on the dashboard. McPhail called for “the key players in the industry” to develop and present a “governance solution” for the dashboard.
“Until we get that, it’s unrealistic to expect it to move forwards,” he said.
The role of technology
While the industry continues to wait for the DWP dashboard feasibility study, pressure is mounting to deliver a product that reconnects savers with their pots. Research on Wednesday indicated that there is vast wealth in the form of ‘lost’ pension pots as workers struggle to track their savings as they move between jobs.
According to the Association of British Insurers, there could be as many as 1.6m lost pensions pots worth nearly £20bn in the UK.
Steve Arnison, commercial director at technology outfit LexisNexis Risk Solutions, described the objective of the dashboard as “fantastic”, but argued that it would only be effective if people are aware of all of their savings.
“The individual consumer can only bring together pensions that they’re actually aware of,” he said.
Government to legislate for CDC
The Work and Pensions Committee has published a letter from Guy Opperman, minister for pensions and financial inclusion, which indicates the government’s intention to lay primary and secondary legislation for collective defined contribution schemes.
Arnison contended that the dashboard is only part of a solution towards helping savers, and should not distract schemes from their own responsibilities towards members.
“It doesn’t take responsibility away from the schemes themselves to actually utilise tech and to utilise effective data, and manage their internal data to ensure that they’re staying in contact with their pensioners,” he added.
