Overview

This Pension Schemes Bill amends existing legislation to regulate Master Trust schemes and other pension schemes more effectively, focusing on financial sustainability and consumer protection. Changes are made to clarify requirements for scheme funders, introduce greater flexibility in scheme transfers, and improve the regulatory framework.

Description

The bill makes several key changes:

• Scheme Funder Requirements (Clause 11): Tightens rules for organisations running Master Trust schemes, requiring them to be legally constituted bodies focused primarily on Master Trust activities. Exceptions can be made by the Secretary of State through regulations, considering factors like financial stability and business activities.
• Scheme Transfer Flexibility (Clause 25): Expands the types of pension schemes that can be part of a transfer process, including allowing schemes with characteristics specified by the Secretary of State (alternative schemes). Regulations will define these “alternative schemes” and the transfer process.
• Regulatory Procedures (Clauses 11 & 25): Establishes procedures for creating and approving regulations, using both affirmative and negative resolution processes. This means some regulations require parliamentary approval, while others do not.
• Application of Provisions (Clause 34): Allows the Secretary of State to extend certain regulations to pension schemes with characteristics similar to Master Trust schemes.
• Definition Clarification (Clause 40): Defines "pension scheme" for the purpose of the bill, referencing the 1993 Pension Schemes Act.

Government Spending

The bill's impact on government spending is not explicitly stated. The costs associated with implementing the new regulations and overseeing their enforcement will likely be a factor, but the financial details are not included in the provided bill text.

Groups Affected

• Master Trust Schemes: Subject to stricter regulations regarding funder requirements and financial sustainability. This could increase compliance costs but also improve consumer protection.
• Pension Scheme Members: Potentially benefit from improved protections and increased clarity around scheme transfers.
• Pension Scheme Funders: Face new requirements and regulatory oversight, requiring adjustments to their operations and possibly increased compliance costs.
• The Pensions Regulator: Takes on additional responsibilities for overseeing the new regulations and requirements.
• Secretary of State: Gains additional powers to make regulations and determine exceptions to the new rules.

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