Govt asks for more time on DB consolidation

The government has asked for more time to plan and introduce defined benefit consolidation legislation as it feels there is a lot more to be done before it is ready.

Speaking at the AMNT Summer Conference, Department for Work and Pensions (DWP) private pensions DB policy lead, Des Healy, said that the DWP would need “a bit more time” as DB consolidation was “a really technical and difficult area”.

He continued: “We think we need to do a lot more work to make sure that they are held to the right standards and investment strategies and member security is being protected.

“We do think that superfunds are a real opportunity to improve things for members, sponsors and the wider economy, which is why we’re taking plans to introduce a bespoke regime.”

Earlier in the day, when asked if DB consolidation would be included in the Pensions Bill, Shadow Pensions Minister Jack Dromey said: “At this stage, no.

“Does that mean this is something kicked into the long grass indefinitely? Absolutely not.”

MPs are not considering it as part of the Pensions Bill because they have been focusing on a ‘quickie’ bill in an attempt to pass the legislation as soon as possible.

Dromey stated: “We’ve been working together, Guy Opperman and I, on a quickie Pensions Bill.

“There was discussion, had we not gone down the road of a quickie bill, and instead we had a mega pensions bill, which was being proposed at one stage. We are determined not to go down that path and focus at this stage on the quickie bill.”

Healy added that the two superfunds that have entered the market already, Clara-Pensions and The Pensions SuperFund, “both can operate legally in the current framework”.

He continued: “We feel the best thing to do is to put in place the right framework to manage the risk that these type of models present.”

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