Lords regret 'skeletal' dashboard powers in bill

The House of Lords’ Constitution Committee has said it regretted the inclusion of “such a skeletal provision” of pensions dashboard powers in the Pension Schemes Bill.

While the committee acknowledged that some of the powers were required in order to allow the parties involved in the dashboard’s creation to share data, it added that further powers should have been “omitted” until further preparation of pensions dashboard policy.

“Skeleton bills inhibit parliamentary scrutiny and we find it difficult to envisage any circumstances in which their use is acceptable. The government must provide an exceptional justification for them,” said the Constitution Committee.

The committee added that the complexity of pension issues was “not an excuse for taking powers in lieu of policy development”.

The Constitution Committee raised concerns about several other issues, including the enforcement of two newly outlined criminal offences; avoidance of employer debt and sanctions, and conduct risking accrued scheme benefits.

Proceedings for the proposed offences, which could lead to imprisonment for as long as seven years, a fine, or both, can be instituted by The Pensions Regulator (TPR), the Secretary of State, or the Director of Public Prosecutions.

The committee called on the government to “explain why the Director of Public Prosecutions does not have a role in bringing, or consenting to,” all proceedings against individuals accused of committing.

The proposal also stipulates that TPR will gain the power to compel individuals to attend an interview as part of its new information-gathering powers.

However, the committee said: “The government should clarify that legal counsel or other representatives are entitled to accompany a person summoned to an interview under these powers.”

The regulator would also gain the authority to make pause orders to protect collective money purchase schemes, which might prohibit the schemes from accepting new members, making payments towards or transfers out of the scheme, or paying benefits.

Similar provisions exist for master trust schemes in the Pensions Schemes Act 2017 and for freezing orders for winding up occupational pension schemes in the Pensions Act 2004.

However, the committee argued: “The government should explain why the approach it has taken with pause orders is appropriate, how it is compatible with the doctrine of implied repeal, and what alternative approaches it considered that could have achieved the same goals without raising this constitutional question.”

The bill also garnered criticism for its outlining of powers to revise the regulatory framework to create multi-employer collective defined contribution schemes.

However, the committee agreed with the Delegated Powers and Regulatory Reform Committee’s assertion that the powers were inappropriate as “the fact that the bill currently prohibits multiple-employer collective money purchase schemes suggests that such schemes may give rise to significantly different regulatory issues”.

The Pension Schemes Bill was introduced into the House of Lords on 7 January 2020 and had its second reading on 28 January, while Grand Committee is scheduled to begin on 24 February.

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