Overview

The Pension Schemes Bill [HL] introduces a new type of pension scheme called a "collective money purchase scheme" (CMPS). CMPS aims to offer greater security and transparency for members, while also providing for clearer rules and regulatory oversight for the schemes themselves.

Description

The Bill primarily focuses on establishing a robust regulatory framework for CMPS. Key aspects include:

• Definitions: Clearly defines "collective money purchase benefits" and "qualifying schemes," specifying requirements such as scheme structure, asset allocation, and benefit adjustments.
• Authorisation: Requires CMPS to obtain authorization from the Pensions Regulator, setting out criteria for fit and proper persons, scheme design, financial sustainability, member communication, systems and processes, and continuity strategies.
• Ongoing Supervision: Establishes ongoing supervisory measures including regular reporting and notification requirements for significant events.
• Triggering Events and Continuity Options: Defines triggering events (e.g., employer insolvency) that require trustees to implement one of three continuity options: discharge liabilities and wind up, resolve the triggering event, or convert the scheme to a closed scheme.
• Member Rights: Strengthens member protection by modifying existing legislation regarding scheme modifications and transfer rights.
• Pensions Regulator Powers: Expands the Pensions Regulator's powers to address non-compliance, including the ability to issue contribution notices, risk notices, and pause orders.
• Pensions Dashboards: Introduces provisions to facilitate the development of pensions dashboards, providing individuals with a consolidated view of their pension entitlements.
• Scheme Funding: Introduces requirements for defined benefit schemes to develop and regularly review funding and investment strategies.
• Northern Ireland Provisions: Includes provisions mirroring those for Great Britain, with appropriate adjustments for Northern Ireland's legislative framework.

Government Spending

The Bill doesn't directly specify government spending figures. However, the establishment of the new regulatory framework for CMPS and the development of pensions dashboards may involve some additional costs for government resources. The increased regulatory oversight could lead to reduced costs in the long run by mitigating risks and preventing failures, but no quantitative information has been provided.

Groups Affected

• Pension Scheme Members: Potentially increased security and transparency in their pensions, particularly within CMPS.
• Pension Scheme Trustees: Increased responsibilities and compliance requirements, including the need to obtain authorisations and follow strict procedures.
• Employers: Increased responsibilities relating to CMPS, including contributions and notification requirements, and potential liabilities following triggering events.
• Pensions Regulator: Increased workload and responsibilities for authorising and supervising CMPS, and implementing the pensions dashboard initiative.
• Financial Services Providers: Potentially increased demand for services relating to CMPS and pensions dashboards.

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