Time for the Government to ‘start listening’ in stand-off over Pension Schemes Bill – Steve Webb, LCP
Pensions & benefits DC pensions Mansion house reforms Policy & regulation
Following the Government’s latest defeat in the House of Lords over powers to compel DC pension schemes to invest in line with Government priorities, Former Pensions Minister and LCP Partner Steve Webb has called on the Government to ‘start listening’ to resolve the impasse. This evening (Wednesday), the Government lost a key vote on Mandation in the House of Lords by 234 votes to 152, a defeat by 82 votes.
Without further concessions, there is a risk that the whole Bill could fall, as the Commons and Lords would not have agreed on a final version before the end of the Parliamentary session next week. Aside from mandation, the Bill includes a range of other measures which have generally been warmly welcomed, including:
- Creating a framework for the safe release of DB surplus funds
- Creating a legal framework for DB superfunds
- Placing duties on DC trustees to have default ‘post-retirement’ journeys for members
- Efforts to drive up scale in workplace pensions
- The creation of a new framework for assessing pensions, Value for Money
- Measures to tackle the growing number of small, stranded pension pots
- Rule changes which would allow the PPF to reinstate a levy if it needed to do so, having cut the levy to zero to ease pressure on businesses
All of these measures would suffer delay if the Bill could not complete its passage through Parliament in this session.
Ministers should recognise that there is a reason for the continued and cross-party opposition to their plans, which is that mandation is a fundamentally flawed policy. When schemes have voluntarily entered into a commitment via the Mansion House Accord process, the decision by the Government to try to enforce this pledge through legislation is not acting in good faith.
