A raft of amendments to the Pension Schemes Bill have been tabled as the bill works its way through the committee stage, with further debate on these issues expected during the committee's hearings this week.

The amendments include calls to extend the scope of the bill in certain areas, as well as abolish the Pension Protection Fund (PPF) administration levy, address pre-1997 indexation issues, and make changes to the proposed reserve power, which has become a controversial point.

Key representatives from across the main political parties have tabled amendments, as well as government figures, with Pensions Minister, Tortsen Bell, tabling one amendment that would extend the scope of certain measures to include Scottish Local Government Pension Schemes (LGPS).

The Minister also tabled some amendments focused on the government's plans to include a reserve asset allocation power, providing further clarity in some key areas.

In particular, Bell tabled an amendment that confines the application of the asset allocation requirement to default funds of a relevant master trust or a group personal pension scheme.

He also tabled a new section that would allow regulations to require the provision of information about asset allocation to the Secretary of State and the Regulatory Authority.

Despite calls to amend the sunset clause, Bell also tabled an amendment that instead clarifies the provision currently in clause 38(16), providing for the key provisions imposing the asset allocation requirement to fall away if they are not brought into force before the end of 2035, rather than the earlier 2032 that industry organisations have called for.

Other political parties have tried to introduce further backstops before the power could be used, however, with Lib Dem MP, Steve Darling, suggesting a new clause that would require that the provisions in clause 38 to only be enacted once agreed through secondary legislation.

Shadow Economic Secretary, Mark Garnier, who branded the reserve power the most controversial point in the bill at the committee's first hearing, went one step further, tabling an amendment that would remove the ability of the government to set mandatory asset allocation targets for certain pension schemes, specifically requiring investments in UK productive assets such as private equity, private debt, and real estate.

He also outlined an amendment that would ensure that the prescribed percentage of asset allocation would not include assets in the water sector and that fund trustees would not be compelled to allocate scheme assets to the water sector.

Darling, with backing from a number of other Lib Dem MPs, also tabled an amendment that would allow schemes where people are affected by pre-97 to offer discretionary indexation where funding allows, with appropriate regulatory oversight.

In addition to this, Darling tabled a new clause that would require the Secretary of State to report on whether the fiduciary duties of trustees of occupational pension schemes should be amended to permit discretionary indexation of pre-1997 accrued rights, where scheme funding allows.

In addition to this, Plaid Cymru MP, Ann Davies, tabled an amendment to make indexation of  compensation provided through the Financial Assistance Scheme and Pension Protection Fund (PPF) applicable to both pre-1997 and post-1997 service.

The Pensions Action Group previously urged MPs to amend the Pension Schemes Bill to require pre-1997 indexation on PPF and Financial Assistance Scheme pension rights, following growing scrutiny in this area in recent months.

This is not the only industry call that has been met, as Darling also proposed a new clause that would abolish the administration levy and provide for the expenses of the PPF and the FCF to be met out of their general funds.

A number of amendments were also tabled in relation to the proposed changes to defined benefit (DB) surplus rule changes, most of which were centred around ensuring member security, which again has been an area highlighted by a number of industry organisations.

Indeed, both Garnier and Darling tabled separate amendments that would require trustees to notify members at least 60 days before making surplus payments to employers, to ensure members receive full information about proposed surplus payments, enabling informed participation.

Both MPs also suggested changes designed to strengthen an actuary's role and oversight of schemes accessing surplus, by requiring confirmation that member notification has occurred before certifying surplus payments.

Darling also suggested changes that would allow for a proportion of surplus funds to be used to fund free pension advice.

This was not the only change around advice proposed, as the Lib Dems also backed calls to make provision by regulations for everyone to receive free, impartial pension advice at age 40 and again around five years before their expected retirement.

Darling also introduced a new clause enables the introduction of a cost ceiling for advice provision to members of pension schemes, and a clause intended to increase engagement with Pension Wise by auto-enrolling members into guidance sessions at key decision points, with the ability to opt out, as was suggested by the Work and Pensions Committee back in 2022.

This was not the only past policy idea to make an appearance, as despite the government's plans for small pots consolidators, Garnier tabled an amendment to allow pension pots to automatically follow members from job to job, consolidating with each new workplace scheme rather than relying on a single lifetime provider.

Darling also suggested that the value for money (VFM) framework for defined contribution schemes includes whether schemes offer free or subsidised advice, and the extent to which pension transfer delays occur and affect member outcomes.

Whilst Darling also called for changes to ensure that the VFM provisions introduced by this bill apply to all occupational pension schemes, Bell tabled a more limited amendment, which would instead ensure that the VFM framework is capable of applying to hybrid schemes.

A variety of other amendments have also been tabled. Key examples include:

- A new clause that would make pension scheme trustees truly independent of the sponsoring companies so that they can protect scheme members’ interests without any conflict of interest (Darling).

- Suggestion that the value of small pots consolidation should be increased from £1,000 to £2,000, and that the government should review and consider increasing the level of small pension pot consolidation every three years (Darling).

- A new clause that would require the government to commission a report on the impact on corporate productivity of DB schemes, and to revise the balance sheet recognition rules for DB pension scheme deficits (Garnier).

- A clause that would require the Secretary of State to commission an independent review into the impact and fairness of provisions within police pension schemes that result in the forfeiture, reduction, or suspension of survivor pensions (Darling).

- An amendment that would require pension funds and managers to show whether their portfolio investments are consistent with the Paris Agreement (Darling).

- An amendment that would require pension funds and managers to monitor and report on the compliance of water and sewerage companies they invest in with targets for reducing sewage discharges (Darling).

- A new clause that would require an independent review into the pension losses incurred by former employees of AEA Technology (Darling).

- A clause requiring an independent review into clawback provisions in occupational DB schemes, in particular, the Midland Bank staff pension scheme (Darling).

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