From the blog: Perhaps it would have been helpful of Theresa May and her cabinet to give a little more thought to the progress of current legislation before taking the country to the polls.
Alongside a steadfast refusal to confirm her party’s stance on the state pension triple lock, the prime minister has now issued a pledge to strengthen the Pensions Regulator against "irresponsible" bosses.
But a string of new measures have been thrown into jeopardy by purdah and the 'wash-up' period that precedes it.
Alongside a steadfast refusal to confirm her party’s stance on the state pension triple lock, the prime minister has now issued a pledge to strengthen the Pensions Regulator against "irresponsible" bosses.
But a string of new measures have been thrown into jeopardy by purdah and the 'wash-up' period that precedes it.
If pensions rules weren’t complicated enough, thanks to purdah significant pension legislation is now left in purgatory while the country goes through an general election
David Brooks, Broadstone
Wash-up refers to the last few days of parliament, in which any legislation must pass through both houses if it is not to be scrapped.
The pension schemes bill made the cut and received royal assent on Friday. However, key pension clauses went missing from the finance bill, which passed in skeletal form.
The reduction of the money purchase annual allowance to £4,000, a policy heavily criticised by the industry when launched, has been omitted, along with the increase to £500 of the tax break for employer-funded financial advice.
Of course, a reinvigorated Conservative government could easily reinstate these measures, but the confusion has hampered the pensions industry’s efforts to communicate changes to members, breaking the continuity so valued in the sector.
Govt delays unpopular statement on raising state pension age despite Pensions Act 2014 s.27(2) "report must be published before 7 May 2017"
— Paul Lewis (@paullewismoney) 28 April 2017
“If pensions rules weren’t complicated enough, thanks to purdah significant pension legislation is now left in purgatory while the country goes through an general election,” said David Brooks, technical director at consultancy Broadstone.
“The fact the reduction hasn’t come in and so remains at £10,000 for now creates an issue for those savers who have accessed their pension savings already,” he added.
A blow may also have been dealt to plans for the review of auto-enrolment, already announced and required by law to be carried out this year. Also caught up in the chaos was the government response to the Cridland report on the state pension age.
“These are decisions for the next government to consider,” a Department for Work and Pensions spokesperson said.
One thing that looks more certain is that the regulator will see its role beefed up under the now probable Conservative government, with a brief to combat corporate transactions that endanger a scheme.
The regulator will have to be notified of any mergers exceeding a certain size or involving significant schemes, and will have the power to block those deals if appropriate consideration is not taken of members' interests.
In theory this should be a strong policy, and looks likely to be a vote-winner, given the ease with which tycoons like Sir Philip Green can be cast as villains in the public eye.
But in practice its implementation may prove more difficult. Experts have repeatedly said the regulator does not have the resources to impose mandatory clearance on a significant proportion of UK M&A, and runs the risk of stifling corporate activity if it attempts to do so.
The introduction of criminal charges for those responsible only makes the final terms of this legislation more crucial. We await the wording with baited breath.
