Pension Schemes Bill completes second reading; Labour to push for widening AE

The second reading of the Pension Schemes Bill has been completed and it will continue its progression through the House of Commons.

On 7 October, MPs voted unanimously to allow the bill to have a second reading and therefore proceed to the committee stage, where each clause and any amendments may be debated.

Secretary of State for Work and Pensions, Thérèse Coffey, opened the second reading before 3 hours of debate between MPs.

Pensions Minister, Guy Opperman, said the bill would “revolutionise” the UK pension landscape in building a “safer, better and greener system”.

“These landmark proposals - from dashboards, scam protection, improved governance, to delivering sustainable investment - offer a once in a generation opportunity to usher in changes that will benefit this country for decades to come,” he added.

Shadow Minister for Pensions, Jack Dromey, closed the bill’s debate for Labour and stated that the opposition will push for further measures in the committee stage.

He stated: “In committee, the opposition will push for measures we want to explore: widening auto-enrolment (AE); better protection against pension scams, because of the urgency of a growing scandal; and ensuring that the dashboard is run in the public interest.

“We hope the government will continue, as they have done thus far, to work with us and other opposition parties to achieve wider and longer-term policies that will protect people’s pensions.”

In its current form, the bill focuses on updated powers for The Pensions Regulator, the legislative framework for the introduction of collective defined contribution (CDC) pensions and the pensions dashboards, climate change and defined benefit (DB) pension regulation.

Commenting on the second reading, Arc Pensions Law partner, Anne-Marie Winton, said: “It’s clear that the Pension Schemes Bill continues to have all party support. However, it had its second reading in the House of Commons and some concerns and potential areas for amendments were highlighted by the MPs present.

"These included: how to address the risk that poor financial decisions will be made by those accessing the new dashboards (if they are anything other than ‘read-only’); widening the people and earnings covered by AE (not least to address the disparity between men and women of the sizes of their DC pension pots at retirement); ‘fallout’ from the introduction of pensions freedoms and the increasing risk of scams as a result (including allowing trustees to refuse to make statutory transfers out).

"73 amendments were made when the bill made its way through the Lords. It looks like we can expect far more to follow in the Commons.”

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