'Historic day' for UK pensions industry as Pension Schemes Bill gains Royal Assent

The Pensions Schemes Bill has officially been granted Royal Assent and is now the Pensions Schemes Act, in what has been highlighted as a “historic day” for the UK pensions industry.

The act aims to help bolster protections for savers through the introduction of new powers to help trustees combat pension scams and the expansion of The Pension Regulator’s powers.

In addition to this, the bill introduces the framework for the introduction of pensions dashboards and collective defined contribution (CDC) schemes, as well as furthering the government’s green agenda, by requiring schemes to adopt and report against the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Commenting on the news, Pensions Minister, Guy Opperman, stated: “This is a historic day for UK pensions and I’m thrilled that after more than 12 months, amidst all the challenges we’ve faced, the bill has now received Royal Assent.

“This act makes our pensions safer, better and greener, as we look to build back better from the pandemic. Its passage will reassure savers that they can, and will, have a retirement they deserve."

The news has also been welcomed by The Pensions Regulator (TPR), with its chief executive, Charles Counsell, highlighting the act as a “strong package of measures to further protect UK pension savers.

He stated: "We are extremely pleased to see it become law and have worked closely with the Department for Work and Pensions to develop effective proposals that will make a real difference to savers.

“Through the new act, we will build on our clear, quick and tough approach to drive better standards across the pension schemes we regulate and ensure savers are treated fairly by employers."

“We will be clear in our expectations when talking to trustees, employers and others, and quick to take effective action where we have concerns. Trustees will be expected to demonstrate how their funding approach is prudent, appropriate and sustainable."

Commenting on the environmental focus, Counsell emphasised that TPR is also "stepping up" to meet the challenges around climate change, confirming that the regulator will be launching its own climate strategy during 2021.

He added: “We will continue to work closely with the industry and other stakeholders to produce the necessary codes and guidance to ensure the measures are introduced in an effective way.

“We are a risk-based and proportionate regulator and this measured approach will continue. Our work is driven and directed by the pursuit of our statutory objectives and we use our powers where appropriate and reasonable to do so."

The bill started its passage to becoming law over a year ago when it first introduced in the Queen’s speech in October 2019, and was subsequently reintroduced following the Conservative Party’s victory in the December 2019 General Election.

It was brought to the House of Lords in January 2020, taking just over a year to proceed through the parliamentary process, and facing much debate, as well as a number of both failed and successful amendments.

However, large sections of the bill are not expected to come into force for several months, owing to further regulations still needed.

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