Maggie Williams looks at the latest debate on the Pension Schemes Bill
As proposed legislation goes, the current Pension Schemes Bill is a decidedly slender tome, focused almost exclusively on the regulation of mastertrusts and early exit fees.
Few would disagree with secretary of state for work and pensions Damian Green’s assessment at its second reading in the House of Commons this week, that the growth of mastertrusts “has been in danger of running ahead of the regulation.” Given that they are now a staple ingredient of auto-enrolment provision, “making sure that the regulatory system is suitable to manage them” is certainly worthy of legislation.
But deputy speaker Natascha Engel had her work cut out reining in a hail of comments from all parties about the absence of detail on defined benefit sustainability, state pension age inequalities, transaction fee transparency and more: “We are discussing what is in the bill, and not what is not in the bill.”
Labour’s work and pensions shadow Debbie Abrahams was among the voices describing the current bill as a missed opportunity: “If this is the only pensions bill in this parliament, there are some serious omissions.”
While the government will issue a green paper shortly on sustainability of defined benefit schemes, will review auto-enrolment in April, and consult on fee transparency later in the year, the chances of another pensions-related bill this term must be slim. A government focused on extricating the UK from the European Union is likely to have bigger fish to fry.
Chair of the Work and Pensions Committee Frank Field MP raised the prospect that “the bill might be blocked, temporarily, until we got justice for the WASPI [Women Against State Pension Inequalities] women.”
However, a lack of support from his own party and others meant his efforts went unrewarded. He could only plead that “should the next pensions bill come, as it assuredly will, and before all the WASPI women are taken up to the new state retirement age, Labour thinks tactically about trying to get them justice, rather than merely talking about it, as I have to.”
Limited in scope as it may be, the bill passed through its second reading. It now moves to committee stage, which will be completed by 21 February and, following formal consultation, Green says the aim is to lay the regulations during the summer of 2018.
Moving quickly to plug the yawning governance gap in mastertrusts is the right move – and after years of seismic change, some general stability in pensions legislation should be welcomed.
But it is equally important that the many other pensions challenges facing employers and individuals alike are not swept out to sea on the waves of Brexit. Providers, campaign groups and industry bodies will need to make sure that they are kept in full public view.