Key Facts

• Amendment 9 would remove a subsection in Clause 123 of the Pension Schemes Bill.
• Amendment 18 proposes guiding objectives to support trustees' decisions on funding and investment strategies while avoiding requirements that could accelerate scheme closures.
• The amendment aims to balance risk management with member benefit protection.
• The regulator has a consultation on the issue.
• Paragraph 475 of the consultation states open schemes retain flexibility in funding strategies compared to closed schemes.
• Paragraph 481 acknowledges open schemes have longer investment horizons and can expect higher returns, which affects discount rate assumptions.
• Government met with individual pension schemes on October 2nd for over an hour.
• DB schemes currently have 10.5 million members with £1.5 trillion under management.
• Labour's amendment 18 seeks to support trustees' ability to decide funding and investment strategies for open schemes.
• Pensions Regulator’s consultation on the DB funding code in September raised concerns about accelerating closures of viable schemes.
• The Pensions and Lifetime Savings Association estimated that the regulator’s proposals could increase liabilities by between £120 billion and £160 billion.
• 21% of DB scheme members belong to schemes still open to new members.
• The liabilities of the schemes could increase by between £120 billion and £160 billion.
• Amendment 18 is proposed as a compromise position that captures the essence of clause 123 while being less prescriptive.
• The Minister supports defined benefit (DB) schemes and has given them the power to invest in alternatives like green infrastructure, social housing or venture capital.
• There is an ongoing consultation on scheme funding measures that seeks to support trustees and employers to manage their scheme funding with a focus on longer-term planning.
• The amendment proposing specific guiding objectives for the Secretary of State was negatived by a vote.
• Amendment seeks to add contract-based workplace schemes alongside occupational pension schemes.
• Clause 124 aims to introduce measures against climate change risk in pension schemes.
• Government consultation on climate change measures was launched by the Secretary of State for Work and Pensions.
• Amendments 21, 22, 23 and 24 enable regulations under subsections (6ZA) of section 95 and 97F of the Pension Schemes Act for England and Northern Ireland respectively.
• These amendments aim to prevent transfers if specific 'red flags' are identified in relation to a transfer or receiving scheme.
• The proposed amendments are related to ensuring due diligence is conducted on potential pension scheme transfers.
• Amendments would allow trustees to refuse pension transfers if there is evidence of a scam.
• The amendments are based on work by the Pension Scams Industry Group.
• About £10 billion may have been lost in pension scams over the past five years affecting around 40,000 people.
• A survey estimates that some 5% of pension transfers in the last five years have been into scams.
• New clause 10 would auto-enrol pension savers into Pension Wise appointments as they approach pension access age.
• The Department's most recent statement of policy intent suggested a stronger nudge towards using Pension Wise.
• A stronger nudge trial showed only a small increase in Pension Wise appointments from 3% to 11%.
• Just Group plc predicts that between 20% to 25% at the upper end would receive their Pension Wise session under the current approach.
• The MP argues for an opt-out guidance system as the best way forward.
• Clause 125 aims to prevent future pension scams by setting conditions for transfers.
• Conditions relate to destination authorization, evidence of employment or residency, and identification of red flags.
• The minister has engaged with stakeholders and parliamentary colleagues extensively on this issue.
• The amendments aim to ensure added protection through primary legislation.
• Clause 125 in the Bill provides the framework for addressing the issues.
• Detailed regulations will be drafted to deal with specific problems related to pension transfers.
• Amendments 21 to 24 propose measures to prevent individuals from transferring their pensions into scam schemes.
• New clause 10 aims to protect people from scams by auto-enrolling pension scheme members in guidance appointments.
• The amendments and new clause have been tabled on a cross-party basis by members of the Work and Pensions Committee.