Torsten Bell MP: speeches

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Speeches

11 Sept 2025 · Pension Schemes Bill (Eighth sitting) · Hansard source
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I am grateful to the hon. Member, as always, for raising those specific issues in this debate. It has been a good opportunity to raise such cases, as he regularly does. The hon. Member will be totally unsurprised that the Government cannot support the new clause, because it is the Pensions Regulator’s role to regulate occupational pension schemes and, as he mentioned, it is the Pensions Ombudsman’s job to investigate individual complaints from members. We do not want the Government to step over the top of those organisations. I encourage those who think that they have a case to approach the ombudsman, if they have not already—given the hon. Member’s remarks, it sounds like they have not done so. I should add that I am not aware of the details of that individual case. To be clear, if individuals have concerns about their workplace pension scheme that relate to their employer and the running of the scheme, they should take the issue to the Pensions Regulator, which will investigate. Individuals who think that they should have been a member of a pension scheme can also go to the Pensions Ombudsman, if that makes sense. Depending on the nature of an individual’s complaint, two routes are available. I ask the hon. Member to withdraw his new clause.
11 Sept 2025 · Pension Schemes Bill (Eighth sitting) · Hansard source
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I can absolutely give that guarantee, because that is in the terms of reference of the Pensions Commission. I will come back to the wider question of the commission in one second. I will not go into detail, but targeted support is a large part of providing more guidance, and we expect the roll-out of that early next year. There is more coming in that space; we are not relying solely on MaPS. How should we think about the interaction of dashboards and bigger DC pots? At the moment, for lots of people entering their retirement, their DC pot may be a smaller part of their overall pension income, but as we move forward, it will become the large majority of their income. That will be very visible because of dashboards. One of the reasons MaPS has been reluctant —although I do not want to say “reluctant”—to promise to deliver the kind of automatic enrolment that is being discussed by the Committee is that a lot of planning work is under way to make sure that when dashboards come online, MaPS is ready and set up to deal with the significant increase in demand for help and in engagement that may come from that. The experience of some pension schemes in Australia is that as pension pots become bigger, there is much more demand for support and guidance. We should expect that demand to grow in the years ahead with or without dashboards, but definitely with dashboards and the other measures together.
11 Sept 2025 · Pension Schemes Bill (Eighth sitting) · Hansard source
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The first thing to say is that this is focused on scale. We appreciate that the Bill would lead to major changes to the pensions market—the hon. Member for Torbay is absolutely right—and we want to understand and monitor the consolidation and scale process over the coming years. To state the obvious, market changes such the scale measures we are talking about take time, and many of the measures in the Bill will not even be implemented within the 12 months. On that basis, I hope that the hon. Gentleman will not push the amendment to a vote. I agree on the wider point about the Bill as a whole and the need for strong monitoring and evaluation. I would probably take a slightly different approach from the hon. Member for Aberdeen North. The Bill contains a large number of measures, and the right way to monitor their implementation will be different for different parts of the Bill. When it comes to the questions of scale, which are the focus of this amendment, the monitoring— [ Interruption. ] That is not the response I was looking for. The monitoring is slightly more visible because we are talking about the number of workplace schemes, or at least workplace defaults, that exist. Let me lay out a bit of what we have in place to monitor. We will be able to monitor scale, charges and, because of the interaction with the value for money regime, returns and asset allocation. Lots of the key success metrics that are meant to come with the scale changes, as well as the delivery of scale itself, will be visible. My honest view is that it is on all of us—obviously, it is particularly on the Government—to pay attention to that as we go. On the wider question of whether we will consider further, I have already committed to do that and to come back and reflect on Report on how we do that. I put on the record my view that that is a reasonable thing to do, and I will do it, but we need to think about it differently for different parts of the Bill.
11 Sept 2025 · Pension Schemes Bill (Eighth sitting) · Hansard source
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I am conscious that there was a debate in the main Chamber on this issue before the summer recess, when we were able to go into the issue in much more depth. The debate related to integrated pensions, but in that context people are usually referring to the HSBC historical pension scheme in particular. Without rehearsing everything I have said about our not being in the business of promising to change pension scheme rules, schemes have wide discretion about the nature of their rules and the entitlements that scheme members accrue. It is not for the Government to change those. The law is very clear that the Government require transparency, just as the hon. Member for Horsham called for, and that includes clear communication of what the entitlement from any given pension scheme is, including issues to do with what is referred to as integrated pensions or clawback pensions. People do have to have received communication that spells that out. The role of the Pensions Ombudsman is to check that that has happened. That is where people can go if they feel that they have not received clear communication about what their scheme entitlements were. I think we can all understand that if anybody started to receive a pension and was shocked to see a deduction in it when they went over the state pension age, that would be very significant for them. It is the job of the Pension Ombudsman to investigate cases such as that.
11 Sept 2025 · Pension Schemes Bill (Eighth sitting) · Hansard source
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I am grateful for this new clause, which was tabled by one of my neighbours in south Wales, the hon. Member for Caerfyrddin (Ann Davies). It is obviously an important issue for many ex-mineworkers and for families across Great Britain. It is basically straightforward: I want to reassure the Committee that the Government have been discussing the transfer with the scheme trustees for many months. Those discussions are actively under way. We expect to be able to make an announcement about the way forward in reasonably short order. I am glad that the new clause will not be pushed to a vote—because if anything, it would risk slowing down the implementation of an agreed outcome—and I totally appreciate the point that the hon. Member for Aberdeen North has made. Any proposal for change will need to be consulted on with the scheme’s trustees on behalf of their members, but that will be coming forward. I hope that provides the Committee with the reassurance it is looking for.
11 Sept 2025 · Pension Schemes Bill (Eighth sitting) · Hansard source
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I thank my hon. Friend for his questions. Let me come to the two halves; two different issues are actually being raised in these amendments and I want to make sure that we deal with them separately. New clause 5 deals with discretionary increases for schemes that have not fallen into the PPF—those with solvent employers. Here, as I said in the surplus discussion, the changes on surplus provide a new route for trustees who do not have the power to make those discretionary increases off their own bat to discuss with employers discretionary increases on pre-1997 pension accruals. It is also clear that we need to understand this issue well. The Pensions Regulator has been engaging in surveys on this issue for exactly that reason and will continue to do so. Overall, my argument is that, for those schemes still operating, we are not going to be in the business of legislating to overwrite scheme rules when it comes to whether schemes had indexation in them pre-1997. Questions of the PPF and FAS represent an important debate, as we heard last Tuesday—I answered questions about that then, and I will not pain everyone by repeating my answers. New clauses 18 and 19 would not work. The new clauses as drafted would apply to subsets of the PPF population. Some pensioners would receive indexation, and some would not. The same flaws in the new clauses apply to FAS. We will definitely be opposing the new clauses, but that is without regard to the wider questions, which, as I said, I commented on last Tuesday.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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These new clauses are intended to help schemes affected by the implications of the Virgin Media v. NTL pension trustees court judgments, which found that certain benefit changes could be void if a scheme cannot produce actuarial confirmation that they met the requirements at the time. That has created significant uncertainty about affected schemes’ liabilities and funding requirements. The new clauses apply to private and public sector defined-benefit pension schemes that were contracted out between 1997 and 2016 under the reference scheme test, which imposed certain legal requirements upon them. The new clauses let schemes ask their actuary to confirm retrospectively that a past change to benefits would not have stopped the scheme from meeting these legal requirements at the time, rather than requiring the scheme to produce actuarial confirmation of the same facts at the time that the change was actually made. They will help members and schemes get the certainty they need. I want to assure the Committee that these new clauses do not change the underpinning standards that were required. They are not a retrospective pardon for benefit changes that did not meet the legal standards within existing schemes. If a scheme did not obtain written confirmation at the time, and cannot obtain retrospective confirmation, the benefit changes can be held to be void, as provided for under current law. New clause 23 defines the language and parameters of the other clauses of this section of the Bill. New clause 24 gives the trustees or managers of a scheme the power to ask the scheme actuary to confirm that a previous change to benefits would not have stopped the scheme from meeting legal requirements at that time. New clause 25 introduces an approach for schemes whose liabilities have already been transferred to the Pension Protection Fund or to the financial assistance scheme. Any benefit changes will be deemed to have been made with actuarial confirmation in those cases. This different approach is needed because individual schemes no longer exist when they have entered the PPF, and there is no longer a scheme actuary. The PPF and FAS would also not have the information required on individual schemes to enable an actuary to provide retrospective confirmation. This ensures that the level of compensation or assistance will continue to be paid to members at current levels. New clause 25 also introduces an explicit provision for wound-up schemes that deems that benefit changes made to the scheme were compliant with the requirement to have confirmation from an actuary. This will make sure that the benefits provided to members, for example through an annuity, will not be incorrect as a result of any historical failure to obtain a written actuarial confirmation. The legal recourse for members would otherwise be against the former scheme trustees, because they cannot have recourse against the provider of the annuity. However, we think it would be unreasonable for these trustees to be potentially personally liable in a situation where they could not obtain a retrospective actuarial confirmation because the scheme and its records no longer exist. New clause 26 provides a regulation-making power to provide for specified alterations to be excluded from the scope of the retrospective confirmation route and to make consequential amendments to the legislation. The power is not intended for immediate use but is included to future-proof the legislation. The clause also contains a separate power to amend existing primary legislation. I want to assure the Committee that the power is narrow, enables consequential amendments to be made, and is subject to the affirmative procedure. New clauses 27 to 30 make mirroring provisions for Northern Ireland, at the request of the Northern Ireland Executive. I commend the new clauses to the Committee. Question put and agreed to. New clause 23 accordingly read a Second time, and added to the Bill. New Clause 24 Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes “(1) This section applies to any potentially remediable alteration purportedly made to a scheme other than one to which section ( Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases ) applies. (2) If the conditions mentioned in subsection (3) are met in relation to it, the alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made, and so as having always been a valid alteration so far as those requirements are concerned. (3) The conditions are— (a) that the trustees or managers of the scheme have made a request in writing to the scheme actuary for the actuary to consider whether or not, on the assumption that it was validly made, the alteration would have prevented the scheme from continuing to satisfy the statutory standard, and (b) that the scheme actuary has confirmed to the trustees or managers in writing that in the actuary’s opinion it is reasonable to conclude that, on the assumption that it was validly made, the alteration would not have prevented the scheme from continuing to satisfy the statutory standard. In this subsection ‘the statutory standard’ means the statutory standard for a contracted-out scheme under section 12A of the Pension Schemes Act 1993 as it had effect at the time the alteration was purportedly made. (4) A scheme actuary who has received a request under subsection (3)(a) in relation to a potentially remediable alteration to a scheme— (a) may take any professional approach (including making assumptions or relying on presumptions) that is open to the actuary in all the circumstances of the case; (b) may act on the basis of the information available to the actuary, as long as the actuary considers it sufficient for the purpose of forming an opinion on the subject-matter of the request. (5) A condition mentioned in subsection (3) may be met by action taken before (as well as action taken after) this section comes into force. (6) Subsection (7) applies to a scheme if — (a) there is an assessment period in relation to the scheme within the meaning of Part 2 of the Pensions Act 2004, or (b) the scheme is operating as a closed scheme under section 153 of that Act. (7) The powers of the Board of the Pension Protection Fund under section 134 and section 155 of the Pensions Act 2004 to give directions includes power to give a direction to the trustees or managers of the scheme requiring them— (a) to make a request under subsection (3)(a) above in relation to a potentially remediable alteration to the scheme, and (b) to take any necessary action to enable or facilitate the making of a decision by the scheme actuary as to whether to give the confirmation described in subsection (3)(b) above in relation to that alteration.”— (Torsten Bell.) This new clause enables the trustees or managers of a scheme to ask the scheme actuary to consider the position of an alteration when it was (purportedly) made. If the actuary confirms that it is reasonable to conclude that at that time the alteration would not have prevented the scheme from continuing to meet the statutory standard for contracted-out schemes, then the alteration is retrospectively deemed by subsection (2) to have been validly made, so far as the requirements of regulation 42(2)(a) and (b) are concerned. Brought up, read the First and Second time, and added to the Bill. New Clause 25 Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases “(1) This section applies to any potentially remediable alteration purportedly made to the rules of— (a) a scheme which has been wound up before this section comes into force, (b) a scheme for which the Board of the Pension Protection Fund has, before this section comes into force, assumed responsibility in accordance with Chapter 3 of Part 2 of the Pensions Act 2004 (see section 161 of that Act), or (c) a scheme which is a qualifying pension scheme for the purposes of regulation 9 of the Financial Assistance Scheme Regulations 2005 (SI 2005/1986) and in respect of which payments are required to be made under section 286 of the Pensions Act 2004. (2) The alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made and so as having always been a valid alteration so far as those requirements are concerned.”— (Torsten Bell.) This new clause deals with cases where it would not now be practicable for the confirmation described in NC24(3)(b) to be obtained in relation to a potentially remediable alteration. In such cases the clause retrospectively deems the alteration to have been validly made so far as the requirements of regulation 42(2)(a) and (b) are concerned. Brought up, read the First and Second time, and added to the Bill. New Clause 26 Power to amend provisions of Chapter 1 etc: Great Britain “(1) The Secretary of State may by regulations amend any of sections ( Sections (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes ) to ( Powers to amend Chapter 1): interpretation and scope ), ( Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes ) and ( Validity of certain alterations to GB salary-related contracted out pension schemes: wound up schemes and other special cases ) for the purpose of providing for purported alterations of any specified description to be outside the scope of remediation under either or both of sections ( Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes ) and ( Validity of certain alterations to salary-related contracted-out pension schemes: wound up schemes and other special cases ). (2) In subsection (1) ‘specified’ means specified in the regulations; and a specified description of purported alterations may be framed by reference to features of the alterations or of the schemes purportedly altered by them (or a combination of both). (3) Regulations under subsection (1) are subject to the negative procedure. (4) The Secretary of State may by regulations make incidental, supplementary, consequential or transitional provision in connection with any provision of this Chapter (other than this section and section ( Powers to amend Chapter 1 etc: Northern Ireland )). (5) Regulations under subsection (4) may amend any Act passed before or in the same Session as this Act. (6) Regulations under subsection (4) are subject to the affirmative procedure if they contain provision made under subsection (5); otherwise they are subject to the negative procedure.”— (Torsten Bell.) This new clause enables regulations made for England and Wales or Scotland (a) to specify further categories of alterations in respect of which the clauses validating otherwise void alterations do not apply and (b) to make incidental, supplementary, transitional or consequential provision relating to any provision of the new Chapter addressing the validity of alterations to pension schemes. Brought up, read the First and Second time, and added to the Bill. New Clause 27 Sections ( Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes ) to ( Power to amend Chapter 1 ): interpretation and scope “(1) The provisions of this section have effect for the purposes of this section and sections ( Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes ) to ( Powers to amend Chapter 1 etc: Northern Ireland ). (2) ‘NI scheme’ means an occupational pension scheme that was a salary-related contracted-out scheme in Northern Ireland; and for this purpose an occupational pension scheme was a salary-related contracted-out scheme in Northern Ireland at any time if the scheme was contracted-out at that time by virtue of satisfying section 5(2) of the Pension Schemes (Northern Ireland) Act 1993 (as it then had effect). (3) ‘Scheme actuary’, in relation to an NI scheme, means— (a) the person for the time being appointed as actuary for the scheme under Article 47 of the Pensions (Northern Ireland) Order 1995 (SI 1995/3213 (N.I. 22)) (professional advisers), or (b) if there is no person so appointed, a Fellow of the Institute and Faculty of Actuaries appointed by the trustees or managers of the scheme to carry out the functions of the scheme actuary under section ( Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes ). (4) ‘Section 33(1)’ refers to section 33(1) of the Pension Schemes (Northern Ireland) Act 1993 (prohibition of alterations to rules of contracted-out schemes in certain circumstances). (5) ‘Regulation 42’ refers to regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996 (SR 1996 No. 493). (6) An alteration purporting to have been made to the rules of an NI scheme is a ‘potentially remediable alteration’ if— (a) by virtue of section 33(1) and paragraphs (1) and (2) of regulation 42 (as they had effect at the time), the alteration could not be made unless the requirements of paragraph (2)(a), (b) and (c) of regulation 42 (as they then had effect) had been met, (b) it was treated by the trustees or managers of the scheme, after it was purportedly made, as a valid alteration, (c) no positive action has been taken by the trustees or managers of the scheme on the basis that they consider the alteration to be void (and so of no legal effect) by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42, and (d) it is not excluded from the scope of remediation under section ( Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes ) Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases ) (see subsection (7)). (7) In subsection (6)(c) ‘positive action’, in relation to a purported alteration, means— (a) notifying any members of the scheme in writing to the effect that the trustees or managers consider the alteration to be void (by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42) and that the scheme will be administered on the basis that it has no legal effect, or (b) taking any other step in relation to the administration of the scheme, in consequence of the trustees or managers considering the alteration to be void, which has (or will have) the effect of altering payments to or in respect of members of the scheme. (8) An alteration purporting to have been made to the rules of an NI scheme is excluded from the scope of remediation under sections ( Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes ) and ( Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases ) if any question relating to the validity of the alteration, so far as relating to the requirements of paragraph (2)(a) and (b) of regulation 42— (a) has been determined by a court before this section comes into force in legal proceedings to which the trustees or managers were a party, (b) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, but has been settled by agreement between the parties at any time before this section comes into force, or (c) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, and remains in issue when this section comes into force.”— (Torsten Bell.) This new clause makes provision for Northern Ireland corresponding to NC23. Northern Ireland generally has its own pensions legislation which is separate from the legislation applying to England and Wales and Scotland. Brought up, read the First and Second time, and added to the Bill. New Clause 28 Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes “(1) This section applies to any potentially remediable alteration purportedly made to an NI scheme other than one to which section ( Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases ) applies. (2) If the conditions mentioned in subsection (3) are met in relation to it, the alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made, and so as having always been a valid alteration so far as those requirements are concerned. (3) The conditions are— (a) that the trustees or managers of the scheme have made a request in writing to the scheme actuary for the actuary to consider whether or not, on the assumption that it was validly made, the alteration would have prevented the scheme from continuing to satisfy the statutory standard, and (b) that the scheme actuary has confirmed to the trustees or managers in writing that in the actuary’s opinion it is reasonable to conclude that, on the assumption that it was validly made, the alteration would not have prevented the scheme from continuing to satisfy the statutory standard. In this subsection ‘the statutory standard’ means the statutory standard for a contracted-out scheme under section 8A of the Pension Schemes (Northern Ireland) Act 1993 as it had effect at the time the alteration was purportedly made. (4) A scheme actuary who has received a request under subsection (3)(a) in relation to a potentially remediable alteration to a scheme— (a) may take any professional approach (including making assumptions or relying on presumptions) that is open to the actuary in all the circumstances of the case: (b) may act on the basis of the information available to the actuary, as long as the actuary considers it sufficient for the purpose of forming an opinion on the subject-matter of the request. (5) A condition mentioned in subsection (3) may be met by action taken before (as well as action taken after) this section comes into force. (6) Subsection (7) applies to a scheme if — (a) there is an assessment period in relation to the scheme within the meaning of Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (SI 2005/255 (N.I. 1)) , or (b) the scheme is operating as a closed scheme under Article 137 of that Order. (7) The powers of the Board of the Pension Protection Fund under Article 118 and 139 of the Pensions (Northern Ireland) Order 2005 to give directions include power to give a direction to the trustees or managers of the scheme requiring them— (a) to make a request under subsection (3)(a) in relation to a potentially remediable alteration to the scheme, and (b) to take any necessary action to enable or facilitate the making of a decision by the actuary as to whether to give the confirmation described in subsection (3)(b) in relation to that alteration.”— (Torsten Bell.) This new clause makes provision for Northern Ireland corresponding to NC24. Brought up, read the First and Second time, and added to the Bill. New Clause 29 Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases “(1) This section applies to any potentially remediable alteration purportedly made to the rules of— (a) a scheme which has been wound up before this section comes into force, (b) a scheme for which the Board of the Pension Protection Fund has, before this section comes into force, assumed responsibility in accordance with Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (see Article 145 of that Order), or (c) a scheme which is a qualifying pension scheme for the purposes of regulation 9 of the Financial Assistance Scheme Regulations 2005 (SI 2005/1986) and in respect of which payments are required to be made under section 286 of the Pensions Act 2004. (2) The alteration is be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made and so as having always been a valid alteration so far as those requirements are concerned.”— (Torsten Bell.) This new clause makes provision for Northern Ireland corresponding to NC25. Brought up, read the First and Second time, and added to the Bill. New Clause 30 Powers to amend Chapter 1 etc: Northern Ireland “(1) A Northern Ireland Department may by regulations amend any of sections ( Sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Northern Ireland): interpretation and scope ), ( Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes ) and ( Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases ) for the purpose of providing for purported alterations of any specified description not to be within the scope of remediation under either or both of sections ( Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes ) and ( Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases ). (2) In subsection (1) ‘specified’ means specified in the regulations; and a specified description of purported alterations may be framed by reference to features of the alterations or of the schemes purportedly altered by them (or a combination of both). (3) A Northern Ireland Department may by regulations make incidental, supplementary, consequential or transitional provision in connection with any provision of this Chapter (other than section ( Powers to amend Chapter 1 etc: Great Britain ) and this section). (4) Regulations made under this section are subject to negative resolution within the meaning given by section 41(6) of the Interpretation Act (Northern Ireland) 1954. (5) The power of a Northern Ireland Department to make regulations under this section is exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)).”— (Torsten Bell.) This new clause enables regulations made for Northern Ireland (a) to specify further categories of alterations in respect of which the clauses validating otherwise void alterations do not apply and (b) to make incidental, supplem e ntary, transitional or consequential provision relating to any provision of the new Chapter addressing the validity of alterations to pension schemes. Brought up, read the First and Second time, and added to the Bill. New Clause 1 Universal Pension Advice Entitlement “(1) The Secretary of State must by regulations establish a system to ensure that every individual has a right to receive free, impartial pension advice at prescribed times. (2) Regulations under subsection (1) must provide for individuals to be offered advice— (a) at or around the age of 40; and (b) at a prescribed age, not more than six years before the individual's expected retirement age. (3) The regulations must make provision about— (a) the content and scope of the free, impartial pension advice, which may include, but is not limited to, guidance on— (i) pension types (including both defined contribution and defined benefit schemes), (ii) investment strategies, (iii) charges, (iv) consolidation of pension pots, and (v) retirement income options; (b) the qualifications, independence, and impartiality requirements for any person or body providing advice; (c) the means by which individuals are notified of their entitlement to receive the advice and how they may access it; (d) the roles and responsibilities of pension scheme trustees, managers, and providers in facilitating access to advice; (e) the sharing member information with prescribed persons or bodies subject to appropriate data protection safeguards. (4) Regulations under this section may— (a) make different provision for different descriptions of pension schemes or different descriptions of individuals; (b) confer functions in connection with the provision or oversight of the advice on— (i) the Pensions Regulator, (ii) the Financial Conduct Authority, (iii) the Money and Pensions Service, or (iv) other prescribed bodies; (c) require the provision of funding for the advice service from prescribed sources. (5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”— ( John Milne .) This new clause makes provision by regulations for everyone to receive free, impartial pension advice at age 40 and again around five years before their expected retirement. Brought up, and read the First time.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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This series of clauses sets out requirements for the approval or certification of key superfund personnel. Trustees and actuaries, among others, are already held to account by strict codes of practice and legislative frameworks. These provisions seek to ensure that those working within the responsible bodies of superfunds are also held to an appropriately high standard of conduct. Clause 69 requires a superfund to have at least one individual responsible for each key administrative function. Clause 70 requires approval from the regulator for individuals looking to hold a key function. This is to ensure that the individual appointed to the role is suitable. A fit and proper test will be conducted to confirm that the named individual has the knowledge and experience for the responsibility that they are undertaking. Clause 71 requires the responsible body of a superfund to conduct due diligence and be satisfied that any individual carrying out work associated with a key function is suitable. The responsible body must issue a certificate to the individual that it is satisfied with their suitability and must maintain a register of all such certificates. This approach intends to echo the responsibility that trustees assume when delegating tasks toward the carrying out of a key function in a pension scheme. Clause 72 requires the regulator to approve the superfund scheme trustees. Regulations will specify the information and background checks that the regulator should undertake to ensure that the trustees are fit and proper. Members should note that civil penalties apply to any breaches of clauses 70 to 72. I commend clauses 69 to 72 to the Committee. Question put and agreed to . Clause 69 accordingly ordered to stand part of the Bill. Clauses 70 to 72 ordered to stand part of the Bill. Clause 73 Events to be notified to the Regulator Question proposed , That the clause stand part of the Bill.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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This is an important clause whose role is to set out the criteria for the Pensions Regulator to approve each transfer to a superfund, having dealt with the authorisation of superfunds separately. Those include that the superfund has been authorised by the regulator and that the ceding employer scheme has no active members; we are talking about closed defined-benefit schemes. The clause also sets out onboarding conditions, which are designed to ensure that members’ benefits are well protected. Superfunds are secure, but not as secure as an insurance buy-out. Schemes with sufficient funds to buy out benefits with an insurer may therefore not enter a superfund. Other onboarding conditions require that the trustees of the ceding scheme make the assessment in the interests of scheme members that the transfer to a superfund will make it more likely that the members’ benefits will be paid in full, and that the capital adequacy threshold is met—which is the main answer to the earlier question from the hon. Member for Aberdeen North. Those and other measures, alongside a known and up-front capital buffer, will ensure that there is a very high probability that members’ benefits will be paid. Affirmative regulation-making powers will allow greater specificity about the onboarding conditions, including the financial metrics of the capital adequacy threshold and the information that must be provided to the regulator to satisfy the onboarding conditions. I commend clause 58 to the Committee.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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I beg to move amendment 215, in clause 58, page 68, line 1, at beginning insert “that it is reasonable to expect”. This amendment adjusts the onboarding condition in relation to the capital adequacy threshold. The Regulator now needs to be satisfied, as at the time it decides the application, that it is reasonable to expect that the threshold will be met immediately following the superfund transfer (rather than that the threshold definitely will be met at that time).
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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I beg to move, That the clause be read a Second time.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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It is a pleasure to serve under you today, Ms Lewell. As we come to the first clauses dealing with superfunds, I start by setting out the background. Superfunds provide a route for employers to secure the liabilities of closed defined-benefit schemes that are unable to afford insurance buy-out. Their purpose is to better protect members from potential losses in the event of employer insolvency, and to release employers to focus on and invest in their core business, helping to drive economic growth. Superfunds already operate within the framework of pensions legislation and the interim guidance issued by the Pensions Regulator. That interim regime has enabled us to learn what works well, but it is now time to put the regulatory framework for superfunds on a permanent footing. Clause 51 provides an overview of part 3 of the Bill and sets out the structure and content of the legislative framework for superfunds. Clause 52 defines a superfund scheme as a “trust-based occupational pension scheme” that is “not supported by a substantive employer covenant” but by a “capital buffer” made of private capital instead. Clause 53 sets out that superfund sections are to be treated as separate schemes, meaning that any potential failure would be contained within that section. Clause 54 prohibits unauthorised superfund activities. Clause 55 allows the Pensions Regulator to authorise superfunds if it is satisfied that they are likely to meet the ongoing requirements set out in chapters 4 and 5 of the Bill. It will enable the regulator to assess the superfund’s organisation, staff, plans, policies and procedures to ensure that it has robust governance and continuity arrangements. Clause 56 makes it clear that the Pensions Regulator must make an authorisation decision within six months of receiving a completed application, with the potential to extend that period by up to three months. The new legislative regime will protect scheme members and enhance the confidence of stakeholders and market participants.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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I will answer the hon. Lady’s question directly, and then come to the amendment more broadly. The best way to think about this amendment is that it asks us to remove one of the core framings of the superfund regime, which is that it is not replacing buy-out, where that is available, to trustees. The amendment enables trustees to do what they like, including moving to a superfund even if they could have moved to an insurance buy-out. That is not the policy intention of this Government, nor was it the policy intention of the previous Government. It also does not align with most of the responses to the consultation. As I said earlier, the job of the legislation is to provide clarity regarding the overall framework, which is that superfunds exist for those schemes that are not able to afford an insurance buy-out. Within that, it is for trustees to make wider judgments, as they do all the time. Directly to the hon. Lady’s question, trustees’ duties to take the decisions that deliver the best outcomes for their members, as a short hand, is totally unaffected by this. This is just a constraint on what the superfund regime is there for, and not because we do not want to see arbitrage between an insurance regulatory regime and a superfund’s regulatory regime. I hope that provides some clarity.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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One of the new features of a superfund regime is that there is a responsible body for the superfund that carries out key parts of its operations. Clause 61 sets out a clear framework of policies and procedures that the responsible body of a superfund must ensure is in place, so that the pension scheme is managed and administered effectively and members’ benefits are protected. The clause will operate alongside the requirements for an effective system of governance and internal controls, which the scheme trustees are already subject to under the Pensions Act 2004. It places an overarching obligation on the responsible body to ensure that the appropriate governance-related policies and procedures are in place across the operating model of the superfund as a whole, to ensure that the responsible body upholds the same standards as scheme trustees in the interests of scheme members. This is in recognition of the greater potential for conflicts of interest than would be seen in a traditional defined-benefit scheme. The clause further requires the responsible body to ensure that the superfund meets prescribed conditions as to its structure, including but not limited to its compliance with tax legislation. The detailed structural requirements for superfunds will be set out in regulations, following consultation and in response to innovations in the market. Clause 62 sets out the management documents that must be prepared and maintained as part of the ongoing requirements for an authorised superfund. The documents include a business plan, a governance manual, a continuity strategy, and a fees and expenses policy. That suite of documentation is designed to ensure the good management of superfunds, and it builds on the requirements and learnings from other authorisation regimes, such as master trusts and collective defined-contribution schemes. Question put and agreed to. Clause 61 accordingly ordered to stand part of the Bill. Clause 62 ordered to stand part of the Bill. Clause 63 Duty to monitor financial thresholds Question proposed, That the clause stand part of the Bill.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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This is the last grouping that covers the superfund regulatory regime. Clause 88 allows regulations to extend the superfund regime, with or without modification, to structures that share similar characteristics to superfunds. To fall within scope of the power, the structures must hold defined benefit liabilities and not be supported by a substantive employer covenant. The clause could be used, for example, to address schemes that provide benefit security through something other than a capital buffer, such as an insurance product. Clause 89 is designed to ensure that superfund schemes, despite their special characteristics, fit within the legislative framework applicable to occupational pension schemes. Superfund schemes present particular issues because there is no traditional employer and it will not necessarily be obvious, when the scheme is established, who its eventual members will be. The intention, however, is for them to be regulated as occupational pension schemes and to be structured in a way that works with the relevant legislative frameworks. Clause 90 makes two specified amendments to legislation in consequence of part 3. The first amendment clarifies how the employer debt legislation will apply where a superfund pension scheme is sectionalised. The second amendment will remove the requirement for a certificate of broad comparability when trustees transfer to a superfund after a scheme comes out of PPF assessment. In such circumstances, trustees will still be required to consider whether the transfer was in the interests of members, and the test in clause 59 will need to be satisfied. This will provide protection for transferring members. Clause 91 enables transitional provision to be made in relation to a superfund that is already operating under the regulator’s interim regime, which I mentioned earlier. Clause 92 provides definitions for key terms. The Secretary of State may by affirmative regulations amend the definition of “superfund group”. This will provide the flexibility to deal with variation in those group structures and ensure that appropriate entities are captured within the regulatory regime. I commend clauses 88 to 92 to the Committee. Question put and agreed to. Clause 88 accordingly ordered to stand part of the Bill. Clauses 89 to 92 ordered to stand part of the Bill. Clause 93 Alienation or forfeiture of occupational pension Question proposed, That the clause stand part of the Bill.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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We now come to the clauses relating to information and reporting requirements for superfunds. Clause 73 requires the trustees of a superfund to notify the Pensions Regulator if certain events occur that might indicate the need for further investigation by the regulator—for example, a material deterioration in the investment performance of the scheme. Clause 74 requires the superfund trustees to regularly update the Pensions Regulator on the financial position of the superfund. This will enable effective monitoring by the regulator. These regular reports are additional to existing valuation and reporting requirements under the existing defined-benefit scheme funding framework. Clause 75 allows the regulator to request information from the responsible body of a superfund to monitor its compliance with ongoing requirements that the regulator may specify. Similar powers to request such returns exist in the master trust and CDC authorisation regimes. Clause 76 allows the regulator to appoint someone to prepare a report about a suspected breach of the requirements. This provision is similar to both section 71 of the Pensions Act 2004 and the FCA’s arrangements for the procurement of a report by a skilled person. As in the 2004 Act, the responsible body—the “person” issuing a notice—must bear the cost of the report. Clause 77 requires the responsible body of a superfund to provide information to the superfund trustees to enable them to comply with relevant legislation, including their obligations to report under clause 74. This is about making sure that trustees have access to information that the responsible body may hold. Members should note that civil penalties apply to the responsible body for breaches of clauses 73, 75, 76 and 77. I commend clauses 73 to 77 to the Committee. Question put and agreed to. Clause 73 accordingly ordered to stand part of the Bill. Clauses 74 to 77 ordered to stand part of the Bill. Clause 78 “Event of concern” and “period of concern” Question proposed, That the clause stand part of the Bill.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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Before a 2022 High Court ruling, it was widely accepted that the Pensions Ombudsman had the status of a competent court, so that a Pensions Ombudsman determination alone would be sufficient for a pension scheme to recoup an overpayment from a member’s pension. The ruling called that into question. Clause 93 simply reinstates the original policy intent that the ombudsman’s determination in pension overpayment dispute cases is sufficient. That is what was debated in Parliament when the ombudsman was established in 1931. Without this legislation, a large additional burden would be imposed on an already stretched county court system. Turning to clause 94, being diagnosed with life-limiting illness can cause unimaginable suffering for a person and their loved ones. Those nearing the end of their life should be able to access the financial support that they need at that difficult time. I am pleased that we are now able to introduce this clause to amend the definition of terminal illness in the Pension Protection Fund and financial assistance scheme legislation. Terminal illness is currently defined as where a member’s death from a progressive disease can be reasonably expected within six months. Clause 94 extends that to within 12 months. These new arrangements may enable a few more affected members to claim a payment, but they will mostly enable members to receive payments at an earlier stage of their illness. That small change could make a big impact for affected members at a very difficult time. Clause 95 covers another aspect of the Pension Protection Fund: its levy. Improved scheme funding of the PPF means that it is far less reliant on the levy than it was previously. For the 2025-26 financial year, the levy has been set at £45 million, its lowest rate. However, the current legislation restricts the PPF board from increasing the levy by more than 25% of the previous year’s levy. That has made it risky for the PPF to reduce the levy significantly, even when it is not needed, because it could take several years to restore it to the previous levels if required. Clause 95 gives the board greater flexibility to adjust the levy by amending the safeguard. The new safeguard will be to prevent the board from charging a levy that is more than the sum of the previous year’s levy and 25% of the previous year’s levy ceiling. Clause 96 focuses on pensions dashboards. Current legislation does not allow the PPF to provide to pensions dashboards information about the compensation that people can expect, or for the display of that information. The clause expands the scope of pensions dashboards to include information relating to compensation from the PPF and financial assistance from the financial assistance scheme, and it could benefit around 140,000 people. I commend clauses 93 to 96 to the Committee.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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I beg to move, That the clause be read a Second time. I thank all Members for their patience. The new clause amends part 1 of the Pensions Act 2008. It is essential to address a current gap in the pension system to ensure that employers share timely and accurate data with pension schemes, beyond the current one-off requirement for employers to provide that information to schemes at the point when the employee is enrolled into the scheme. Improving data records will help to improve member communications and will support pension schemes to operate more efficiently and effectively. Poor data contributes to wasted administration costs because it often requires manual interventions to verify identities and match records, which is especially important to facilitate the small pots framework that we have discussed previously. Finally, the new clause extends the relevant pre-existing compliance provisions in the Pensions Act 2008 to these new duties, ensuring that the regulator will have suitable enforcement powers. In summary, the new clause supports better governance through improved data quality. Question put and agreed to. New clause 20 accordingly read a Second time, and added to the Bill. New Clause 22 Additional powers for certain scheme managers “(1) Scheme regulations may make provision for the purpose of conferring any power or powers falling within subsection (2) or (4) on a specified scheme manager for a scheme for local government workers in England and Wales. (2) Scheme regulations under this section may make provision conferring on the scheme manager (in relation to carrying out its functions as a scheme manager)— (a) any specified power or powers of a local authority under Part 6 of the Local Government Act 1972, or (b) any power or powers corresponding to one or more of the powers of a local authority under that Part. (3) The power to make provision by virtue of subsection (2) is not exercisable if, or to the extent that, the scheme manager already has the powers of a local authority under Part 6 of the Local Government Act 1972 (otherwise than by virtue of scheme regulations under this section). (4) Scheme regulations under this section may make provision conferring on the scheme manager (as part of its functions as a scheme manager) power to provide any administrative, professional or technical service for any other person who is a scheme manager for a public service pension scheme. (5) In subsection (4)— (a) ‘public service pension scheme’ means a scheme for the payment of pensions and other benefits to or in respect of persons of a description set out in section 1(2) of PSPA 2013, and (b) ‘scheme manager’ (in the third place it appears) means any person who is, for the purposes of PSPA 2013, a scheme manager for any such scheme. (6) The power to make provision by virtue of subsection (4) is not exercisable if, or to the extent that, the scheme manager already has the power to provide services referred to in that subsection (otherwise than by virtue of scheme regulations under this section). (7) Scheme regulations under this section may amend or modify any Act passed before or in the same Session as this Act. (8) In this section ‘specified’ means specified in scheme regulations under this section.”— (Torsten Bell.) This new clause enables regulations to confer additional powers specified in subsection (2) or (4) on a specific scheme manager. Most but not all of the scheme managers already have those powers, so the intention is to enable the others to be given any of the powers that they do not already have. Brought up, read the First and Second time, and added to the Bill. New Clause 23 Sections (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Great Britain): interpretation and scope “(1) The following provisions of this section have effect for the purposes of this section and sections ( Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes ) to ( Powers to amend Chapter 1 etc: Great Britain ). (2) ‘GB scheme’ means an occupational pension scheme that was a salary-related contracted-out scheme in England and Wales or Scotland; and for this purpose an occupational pension scheme was a salary-related contracted-out scheme in England and Wales or Scotland at any time if the scheme was contracted-out at that time by virtue of satisfying section 9(2) of the Pension Schemes Act 1993 (as it then had effect). (3) ‘Scheme actuary’, in relation to a scheme, means— (a) the person for the time being appointed as actuary for the scheme under section 47 of the Pensions Act 1995 (professional advisers), or (b) if there is no person so appointed, a fellow of the Institute and Faculty of Actuaries appointed by the trustees or managers of the scheme to carry out the functions of the scheme actuary under section ( Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes ). (4) ‘Section 37(1)’ refers to section 37(1) of the Pension Schemes Act 1993 (prohibition of alterations to rules of contracted-out schemes in certain circumstances). (5) ‘Regulation 42’ refers to regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations 1996 (SI 1996/1172) (requirements for alterations to rules of contracted-out schemes). (6) An alteration purporting to have been made to the rules of a GB scheme is a ‘potentially remediable alteration’ if— (a) by virtue of section 37(1) and paragraphs (1) and (2) of regulation 42 (as they had effect at the time), the alteration could not be made unless the requirements of paragraph (2)(a), (b) and (c) of regulation 42 (as they then had effect) had been met, (b) it was treated by the trustees or managers of the scheme, after it was purportedly made, as a valid alteration, (c) no positive action has been taken by the trustees or managers of the scheme on the basis that they consider the alteration to be void (and so of no legal effect) by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42, and (d) it is not excluded from the scope of remediation under sections ( Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes ) and ( Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases ) (see subsection (8)). (7) In subsection (6)(c) ‘positive action’, in relation to a purported alteration, means— (a) notifying any members of the scheme in writing to the effect that the trustees or managers consider the alteration to be void (by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42) and that the scheme will be administered on the basis that it has no legal effect, or (b) taking any other step in relation to the administration of the scheme, in consequence of the trustees or managers considering the alteration to be void, which has (or will have) the effect of altering payments to or in respect of members of the scheme. (8) An alteration purporting to have been made to the rules of a GB scheme is excluded from the scope of remediation under sections ( Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes ) and ( Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases ) if any question relating to the validity of the alteration, so far as relating to the requirements of paragraph (2)(a) and (b) of regulation 42— (a) has been determined by a court before this section comes into force in legal proceedings to which the trustees or managers were a party; (b) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, but has been settled by agreement between the parties at any time before this section comes into force, or (c) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, and remains in issue when this section comes into force.”— (Torsten Bell.) This new clause is intended to form part of a new Chapter 1 in Part 4 to address issues arising from the decision of the Court of Appeal in Virgin Media Ltd v NTL Pension Trustees. This decision called into question the validity of past alterations to salary-related contracted out occupational pension schemes. It appears that a number of schemes were purportedly altered without the prior actuarial confirmation required (under regulation 42(2)(b) of the Occupational Pension Schemes (Contracting-Out) Regulations 1996) being given. In other cases inadequate records mean that the current trustees or managers of some schemes cannot tell whether the necessary confirmation was given. The new Chapter will provide for the retrospective validation of such alterations where certain conditions are met, dealing with Northern Ireland pension schemes separately. The new clause also provides that alterations whose validity was in issue in legal proceedings commenced on or before 5 June 2025 are outside the scope of remediation under the new Chapter. That was the date on which a published ministerial statement indicated that the Government proposed to take retrospective legislative action to address issues arising from the Virgin Media case. Brought up, and read the First time.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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Chapter 3 sets out the criteria for approving superfund transfers. The clause protects the integrity of the superfund regime that we are aiming to put in place through the Bill by making it clear that the penalty for committing an unauthorised superfund transfer may be a fine, imprisonment for up to two years, or both. I commend the clause to the Committee. Question put and agreed to. Clause 57 accordingly ordered to stand part of the Bill. Clause 58 Approval of superfund transfers
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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I thank all hon. Members for the consensus around these amendments. We will return to the question of indexation shortly with some of the new clauses. I also want to correct the record. In the exciting debate on the Pensions Ombudsman, I mentioned 1931 but meant 1991. It is not quite as old as I suggested, so I am glad that is now noted. Question put and agreed to. Clause 93 accordingly ordered to stand part of the Bill. Clauses 94 to 96 ordered to stand part of the Bill. Clause 97 Amendments of Pensions Act 2004 Question proposed, That the clause stand part of the Bill.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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I beg to move, That the clause be read a Second time.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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These new clauses deliver proposals that are contained in the final report of the pension investment review by adding a new chapter in part 2 of the Bill. Clause 38 set out the requirements for master trusts and group personal pensions to demonstrate that they have sufficient scale, and this new chapter merely supports that delivery. There are too many default arrangements without scale in some schemes, and this fragmentation does not benefit savers. To prevent further fragmentation, new clause 15 allows for regulations to be made to restrict the creation of new non-scale default arrangements. This is not a ban on new default arrangements; there will be circumstances where they will be in savers’ interests. However, any new non-scale default arrangements will need to obtain regulatory approval before they can accept any moneys into them. We must also deal with the existing fragmentation, and new clause 17 requires a review to be established jointly by the DWP and the Treasury on non-scale default arrangements. This review will look at the scale of the issue and why action has not been taken to consolidate these non-scale default arrangements where it would benefit savers for that to take place. We anticipate that the review will commence in 2029, once the value for money and contractual overrides are in place. They will provide the tools needed for providers to take action before the review commences. Those tools will help to reduce fragmentation. The FCA and the Pensions Regulator will be required to provide information and assistance to the review. Once the review has been completed, it will be required to publish its findings, and these will inform further steps to support consolidation.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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The first reassurance I can give is that this part of the Bill requires only one regulatory framework, because it all sits within the Pensions Regulator and within the defined benefit part of the landscape, as I am aware the hon. Member for Aberdeen North knows. On the hon. Member’s wider point, which is relevant to many parts of the Bill, I absolutely agree and will offer a two-part reassurance—we will also come to a new clause later that directly gets at this issue. I entirely agree that having two regulatory regimes is no excuse for having different consumer experiences across the two halves of the regime. To address that, I have made sure that the Bill supports the same outcomes, and have stress tested that considerably, but also made it clear that, as a Government policy agenda, our goal is that that should be the case, full stop, including in some areas where it has not been historically. That is absolutely what we need to keep working towards. We should all have that in our heads. When it comes to the regulations, it is also our clear intention that the FCA and TPR should be working very closely together, as we discussed with the value for money regulations, for example. Question put and agreed to. Clause 58, as amended, accordingly ordered to stand part of the Bill. Clause 59 Special provision for certain schemes coming out of assessment period Question proposed, That the clause stand part of the Bill.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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This group of clauses introduces requirements for superfunds that concern funding and investment. Clause 63 places a duty on the responsible body of a superfund to protect members’ benefits by having robust policies and procedures in place to monitor the financial thresholds. Clause 64 defines those financial thresholds, which are key components of the regulatory regime and follow the example of the Solvency II supervisory ladder of interventions, tailored to the unique characteristics of superfunds. That means that there is a series of clear and known consequences, both positive and negative, that could happen in superfunds as a direct response to changes to their funding levels. The financial thresholds are designed to protect the security of members’ benefits. When certain thresholds are breached, there are mandatory actions that must be taken to protect members. Government amendment 222 is minor and technical, and seeks to provide certainty and clarity to the operators and administrators of superfunds that they can use the buffer funds both to invest the buffer in the hopes of generating growth, and to pay expenses, fees and—importantly, for the Treasury half of my job—any taxes that are owed. Clause 65 requires that arrangements must be made to transfer capital buffer assets to the scheme’s trustees in specific circumstances. That is the important protection, because it is the capital buffer that provides the equivalent of the employer covenant protection that we see in traditional defined-benefit schemes. The release of the buffer to the trustees as part of an approved response plan—which we will come to in clause 81—is fundamental to the protection of members’ benefits. Clause 66 ensures that the capital buffer cannot be released to anyone other than the scheme’s trustees, except where the liabilities of the scheme have been satisfied, or where the release is a permitted profit extraction. It is important that permitted profit extraction takes place only when the security of the scheme has been materially improved, above the superfund’s initial capital adequacy requirements, which are obviously significant. Clause 67 requires the responsible body of the superfund to have an investment strategy for the capital buffer, prepared in accordance with any requirements specified in regulations made by the Secretary of State. Clause 68 requires the responsible body of the superfund to appoint an appropriately qualified, independent person to verify the valuations of the capital buffer at least once a year. Question put and agreed to. Clause 63 accordingly ordered to stand part of the Bill. Clause 64 ordered to stand part of the Bill. Clause 65 Capital buffer: compulsory release to trustees Amendment made: 222, in clause 65, page 73, line 2, leave out “for market value consideration” and insert “— “(a) in the ordinary course of the investment of the capital buffer, or (b) in payment of fees, expenses, taxes or other charges incurred (in each case) in connection with the management or administration of the capital buffer”. —(Torsten Bell.) This amendment clarifies the circumstances in which the capital buffer is regarded as “released” for the purposes of Part 3. Clause 65, as amended, ordered to stand part of the Bill. Clauses 66 to 68 ordered to stand part of the Bill. Clause 69 Key functions Question proposed , That the clause stand part of the Bill.
11 Sept 2025 · Pension Schemes Bill (Seventh sitting) · Hansard source
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Just to clarify, there is significant support from the industry for clause 59 in general terms. This is in part because of the successful rescue of the Debenhams pension scheme out of the Pension Protection Fund assessment—it had not entered the PPF; had it done so, there would have been a significant cut in members’ benefits—by the currently sole operating superfund, Clara Pensions. PPF assessment following employer insolvency is designed to ensure that member benefits are protected. Some schemes that come out of PPF assessment are too well funded to stay in the PPF, because they could achieve better member outcomes than might be offered by the PPF. The clause amends the onboarding conditions in these instances, to allow trustees of a scheme in PPF assessment to seek to secure their liabilities with a superfund at less than full benefits, but more than would otherwise have been secured through a buy-out that was available, given the level of their assets at that point. Based on the evidence from the PPF’s purple book, we anticipate that, on average, five in 10 so-called PPF-plus schemes could benefit each year. [ Official Report, 27 October 2025; Vol. 774, c. 1WC.] (Correction) Trustees can continue to buy out the level of benefits that the scheme can afford with an insurer, but this clause provides them with the option of entering a superfund, where they consider doing so to be in the interest of members. Clause 60 specifies that an application must be made in the manner and form specified by the Pensions Regulator. The approval process enables the regulator to protect schemes and their members during the application process, and aligns with the regulator’s systems and processes and its experience with other authorisation and supervisory regimes. I commend clauses 59 and 60 to the Committee. Question put and agreed to. Clause 59 accordingly ordered to stand part of the Bill. Clause 60 ordered to stand part of the Bill. Clause 61 Governance and structure

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