Torsten Bell MP: speeches

Speeches

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 134 in clause 39, page 46, line 36, after “2008” insert— “in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,” This amendment, together with Amendment 135, ensures that provisions in or under the Pensions Act 2008 are added to section 204A of the Financial Services and Markets Act 2000 (meaning of “relevant requirement” and “appropriate regulatory”) only so far as they relate to the scale requirement or the asset allocation requirement.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I thank the hon. Lady for that question. There is not a formal requirement on the Secretary of State to carry out a review as we are going. My honest view is that any regulator and Secretary of State will want to actively monitor what happens. I very strongly expect that this will be discussed at great length at every single pension conference around those years, because all the providers will be talking to each other about how they are taking these things forward. The hon. Lady will remember the discussion last Tuesday with some providers, including the National Employment Savings Trust and People’s Pension, about how they are already planning to bring these solutions forward. Although they are new for the industry, most providers had already been thinking about this, because they know that it would be the right thing to do even if there were not a Government requirement to do it, and because I have been clear with them for quite some time that this is the direction of travel in both the trust market and the GPP market. I am not sure that we need a rigid, set date for a review, but I will take away the hon. Lady’s wider question about what reassurance we can offer that people will be actively monitoring what has happened rather than just watching and seeing what happens. I can certainly write to the regulators, for example, to make it clear that that will be our expectation. Amendment 147 agreed to. Amendments made: 148, in clause 42, page 55, line 11, at beginning insert “at least in such circumstances or”. This amendment allows for regulations to provide that particular events (as well as times or intervals) trigger a requirement to review default pension benefit solutions. Amendment 149, in clause 42, page 55, line 13, leave out “relevant” and insert “pension”. This amendment ensures that the definition of “pension benefit solution” is capable of operating in relation to a pension scheme that is not a relevant scheme (such as a collective money purchase scheme). Amendment 150, in clause 42, page 55, line 25, leave out “as a default pension benefit solution,” and insert “of the scheme as the pension benefit solution under which— (i) the eligible members of the scheme generally, or (ii) a subset of those eligible members, will receive pension payments unless they choose to receive pension payments under a different pension benefit solution,”. This amendment clarifies the definition of “default pension benefit solution”. Amendment 151, in clause 42, page 55, line 40, at end insert “; (d) such other factors as may be prescribed.”— (Torsten Bell.) This amendment allows other factors to be added by regulations to the factors that trustees or managers of a relevant scheme have to take account of in determining what default pension benefit solutions the scheme should make available.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  We now move from the contractual override provisions of the Bill to the default pension benefit solutions. This is a material change to our pension landscape, as the defined contribution landscape has matured, as I will come to. Again, I am glad that there has generally been cross-party consensus on the issue. Clause 42 is pivotal in ensuring that members of defined-contribution pension schemes are provided with default options for pension benefit solutions when they want to access their pension assets, thereby reducing the complexity for individuals of securing an income in and through later life. These solutions must be designed to provide a regular income to members during retirement. The clause makes provision for an exemption where that would not be appropriate. We intend to set out in regulations what is meant by “designed to provide a regular income” and by “retirement”. Members will have access to pre-designed benefit solutions that are tailored to meet the needs of the scheme’s membership. The intention is that, normally, individuals need not make a decision about how they would take their pension benefits, except to confirm that they want to start receiving payment. The clause also provides for periodic reviews to be prescribed to ensure that the solutions remain appropriate. Not only will this measure support our commitment to enhancing the pension system robustness and ensuring that members normally benefit from a later-life income with the necessary communications of governance alongside it, but it will potentially provide the trustees with a level of assurance in relation to the investment strategy, enabling decisions about investment in longer-term assets, which will support the opportunity for investment in productive assets, including in the UK. The Opposition spokesperson, the hon. Member for Wyre Forest, raised that point in another context, but in this part of the DC landscape in particular, this provision means that schemes will not need to move all assets into safer assets as people approach retirement, if they are clear about the product that people will be in during their retirement. Government amendments 147 to 155 are minor. They provide clarity on what is a default pension benefit solution, who is an eligible member and what is a relevant scheme, and they provide for the negative parliamentary procedure for subsequent regulations relating to when, and in what circumstances, default pension benefit solutions need to be reviewed.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  We have now reached clause 43—the clause that deals with the situation I mentioned briefly earlier, which is where a scheme thinks that it is in the best interests of its members that the default solution is provided by another scheme or provider, and it sets out how that should take place. Amendments 156 to 160 and 163 and 165 all relate to the operation of providing pension benefit solutions via transfers to another scheme. The intention of the amendments is merely to provide helpful clarifications or to otherwise ensure that the clauses operate in line with the policy intent. Amendment 156 clarifies that trustees or managers may choose to offer to transfer all the scheme’s members to another scheme for the purpose of providing a pension benefit solution, or just a subset of those members—as I said before, there may be a different cohort within each scheme with the right default for them. Amendment 158 clarifies that it will be for trustees or managers of a relevant scheme to determine whether it is reasonably practical for the scheme to provide a default pension benefit solution. Amendment 160 clarifies that trustees or managers of a relevant scheme may offer to transfer members to another scheme if they have determined that the other scheme would provide a better outcome for those members than they would provide within their own scheme—again, the interests of members should come first. Amendments 157 and 159 are consequential amendments. Amendment 163 clarifies that trustees or managers of a relevant scheme must arrange for transfers to take place and not just facilitate them. That ensures that members should be supported through the whole process—we do not want schemes thinking their job is done as soon as they have set out that process, and leaving members to wrestle with it. These are minor but important technical amendments. They do not alter policy. I ask the Committee to support them. Amendment 156 agreed to. Amendments made: 157, in clause 43, page 56, line 30, leave out from “such” to end of line 31 and insert— “members are referred to in this Chapter as ‘transferable members’.” This amendment is consequential on Amendment 156. Amendment 158, in clause 43, page 56, line 32, leave out from “that” to “to design” in line 33 and insert— “the trustees or managers of the principal scheme have determined that it is not reasonably practicable for them”. This amendment makes the first condition in clause 43(2) subject to the determination of the trustees or managers. Amendment 159, in clause 43, page 56, line 33, leave out “that member” and insert “the members concerned”. This amendment is consequential on Amendment 156. Amendment 160, in clause 43, page 56, line 36, leave out from “have” to end of line 38 and insert— “determined that a qualifying pension benefit solution of a qualifying scheme (other than the principal scheme) will provide a better outcome for the members concerned than any default pension benefit solution that the trustees or managers of the principal scheme could design and make available to them.”— (Torsten Bell.) This amendment clarifies the application of the second condition in clause 43(3).

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 140, in clause 41, page 48, line 22, after “2008” insert “or section 3(2), 5(2) or 7(3) of the Pensions (2) Act (Northern Ireland) 2008 (c. 13 (N.I.))” This amendment extends the application of the contractual override measure to Northern Ireland pension schemes.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 214, in clause 50, page 62, line 33, leave out from beginning to end of line 8 on page 63 and insert— “ 137FBD FCA general rules: guided retirement (1) The FCA must make general rules for the purpose of ensuring that default or qualifying pension benefit solutions are made available to members of relevant pension schemes. (2) In determining what provision to include in the rules, the FCA— (a) must have regard to provision made by, and any provision made under, Chapter 5 of Part 2 of the Pension Schemes Act 2025 (guided retirement: schemes regulated by the Pensions Regulator), and (b) must aim to ensure, so far as possible, that the outcomes achieved by the rules in relation to relevant pension schemes correspond to those achieved by that Chapter, and any regulations made under it, in relation to pension schemes to which that Chapter applies. (3) In this section— ‘default or qualifying pension benefit solution’ means a pension benefit solution which— (a) is designed for delivering money purchase benefits under a pension scheme to some or all of the members of the scheme, (b) is designed to provide a regular income for the members concerned in their retirement (whether or not together with other benefits), and (c) meets any other prescribed conditions; ‘FCA-regulated pension scheme’ means a pension scheme whose operation— (a) is a regulated activity, and (b) is carried on in the United Kingdom by an authorised person; ‘money purchase benefits’ has the same meaning as in the Pension Schemes Act 1993 (see section 181 of that Act); ‘pension benefit solution’, in relation to a pension scheme, means a contractual or other arrangement for making pension payments in respect of members’ accrued rights; ‘pension scheme’ has the meaning given in section 1(5) of the Pension Schemes Act 1993; ‘relevant pension scheme’ means an FCA-regulated pension scheme that is— (a) an auto-enrolment scheme, (b) a workplace personal pension scheme that is not an auto-enrolment scheme, or (c) a pension scheme of a prescribed description, and for that purpose ‘auto-enrolment scheme’ has the meaning given in section 117A(3) and ‘workplace personal pension scheme’ has the meaning given in section 117A(5).” This amendment adjusts the requirement for the FCA to make rules corresponding to Chapter 5 of Part 2. It ensures that the FCA has the flexibility to make provision that is different from that contained in Chapter 5 of Part 2 provided that the FCA’s rules aim to achieve corresponding outcomes to that Chapter.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 127, in clause 38, page 45, line 31, at end insert— “28G Risk notices (1) The Regulatory Authority (‘the Authority’) may give a risk notice to the trustees or managers of a relevant Master Trust if the Authority considers that— (a) there is an issue of concern in relation to the relevant Master Trust, and (b) the relevant Master Trust will, or is likely to, cease to meet the conditions for approval under section 28A or 28C if the issue is not resolved. (2) A ‘risk notice’ is a notice that requires the trustees or managers of a relevant Master Trust to submit to the Authority a plan (a ‘resolution plan’) setting out proposals for resolving the issue of concern. (3) A risk notice must— (a) identify the issue of concern; (b) specify the date by which the resolution plan is to be submitted. (4) If the Authority is not satisfied that the proposals in a resolution plan are likely to be adequate to resolve the issue of concern, the Authority may give a further notice to the trustees or managers requiring them to submit a revised plan by a date specified in the notice. (5) The trustees or managers must implement the proposals in a resolution plan if the Authority— (a) is satisfied that the proposals are likely to be adequate to resolve the issue of concern, and (b) notifies the trustees or managers accordingly. (6) The Authority may direct the trustees or managers to comply with the requirement imposed by subsection (5). (7) Where the trustees or managers are required by subsection (5) to implement the proposals in a resolution plan, they must— (a) submit to the Authority, before the end of a period specified in regulations, a report setting out what progress they are making in implementing the proposals (a ‘progress report’); (b) submit further progress reports to the Authority at intervals specified by the Authority. (8) Resolution plans and progress reports must be provided in the manner and form specified by the Authority. (9) A reference to a resolution plan in subsections (4) to (8) includes a reference to a resolution plan as revised under subsection (4). (10) Regulations may— (a) specify information that a risk notice must contain; (b) provide that the date referred to in subsection (3)(b) or (4) must fall before the end of a period specified in the regulations. (11) Section 10 of the Pensions Act 1995 (civil penalties) applies to a trustee or manager of a relevant Master Trust who fails to comply with— (a) a notice under subsection (1) or (4), (b) a direction under subsection (6), or (c) a requirement imposed by subsection (7).” This amendment allows the Regulatory Authority to issue risk notices to the trustees or managers of a relevant Master Trust or the provider of a group personal pension scheme if there were an issue in relation to the scheme relating to the quality requirement.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  We now come to the contractual override part of the Bill. This group of amendments expands the scope of clause 41 to apply to Northern Ireland pension schemes. Just like in Great Britain, many pension scheme members in Northern Ireland will be in arrangements delivering poor value and outcomes. However, due to a lack of engagement from members, there is often little providers can do to address that. Extending these changes to Northern Ireland will help to solve that. These amendments will create better outcomes for pension scheme members in Northern Ireland, and I therefore ask the Committee to support these amendments. Amendments 143 and 144 add another layer of consumer protection to the already rigorous consumer protections we have included in the Bill. Currently a provider is required to receive certification from an independent person with sufficient expertise that the best interest test has been met. To clarify, that test requires the provider that wishes to use the contract override to carry out an assessment that it is in the interests of scheme members that the override take place. That test then has to be certified by an independent person. This is about strengthening that independent person test. The amendments require the Treasury to make regulations defining “independence” by specifying requirements which must be met by an independent person before they can be appointed, and ensure that the independent person has no conflict of interest. The FCA is then required to include the provisions made by these regulations in its rules. The amendments make an important change to the Bill by ensuring there will be clear rules on who can undertake this important role, and I therefore commend them to the Committee. Clause 41 inserts proposed new part 7A, on what we call the contractual override mechanism—referred to as a unilateral change—into the Financial Services and Markets Act 2000. This will enable providers of FCA-regulated, defined-contribution workplace pension schemes —note we are talking about FCA-regulated, defined-contribution workplace schemes only—to override the terms of a pension scheme without the consent of members and either transfer members to a different pension scheme, make a change that would otherwise require consent, or vary the terms of members’ contracts, but only when certain clear conditions, including most importantly the best interest test, are met. This will establish broad equivalence with the trust based market, where these changes are already available, so trustees already have these powers within the trust-based market. It will also create better outcomes for consumers, deliver on a long-awaited industry ask, and help drive scale and consolidation within the sector, achieving the consolidation we talked about in relation to the previous clause. It is an important enabler of those changes. The clause also amends sections 105, 168 and 429 of FSMA to ensure that the contractual override mechanism can work as intended, and to ensure that the appropriate parliamentary procedures apply to regulations that are made under this part, and that amend or repeal primary legislation. I commend the clause to the Committee. Amendment 140 agreed to. Amendments made: 141, in clause 41, page 48, line 24, leave out from “member”” to end of line 25 and insert “means an active member within the meaning of Part 1 of the Pensions Act 2008 (see section 99 of that Act) or Part 1 of the Pensions (2) Act (Northern Ireland) 2008 (c. 13 (N.I.)) (see section 78 of that Act).” This amendment is consequential on Amendment 140. Amendment 142, in clause 41, page 48, line 33, leave out from “arrangements”” to end of line 34 and insert “means direct payment arrangements within the meaning of section 111A of the Pension Schemes Act 1993 or section 107A of the Pension Schemes (Northern Ireland) Act 1993.”— (Torsten Bell.) This amendment is consequential on Amendment 140.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 161, in clause 43, page 57, line 1, leave out “and willing” and insert “to and agrees”. This amendment is consequential on Amendment 174.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  Noted. Amendment 117 agreed to. Amendments made: 118, in clause 38, page 45, line 9, at end insert— “(1A) The Secretary of State must make regulations under subsection (1) so that they have effect whenever regulations under section 28C(1) or (2) have effect.” See the explanatory statement for Amendment 117. Amendment 119, in clause 38, page 45, line 14, leave out “the scheme or”. This amendment means the asset allocation requirement can only be suspended where it would cause material financial detriment to the members of a scheme. Amendment 120, in clause 38, page 45, line 15, leave out from “the scheme” to end of line 17. This amendment simplifies the description of what may be done by regulations under new section 28F(1). Amendment 121, in clause 38, page 45, line 17, at end insert— “(aa) may make provision about the basis on which the Authority may or must form such a view, including about the evidence which the Authority may or must take into account;”. This amendment clarifies that the regulations can circumscribe the basis on which the FCA or TPR can reach a view on the material financial detriment test in subsection (2)(a). Amendment 122, in clause 38, page 45, line 23, at end insert— “(c) must provide for the Authority’s determination on an application to be referred to the Upper Tribunal.” This amendment ensures that decisions on an application for the suspension of the asset allocation requirement will be referable to the Upper Tribunal. Amendment 123, in clause 38, page 45, leave out lines 24 to 26. This amendment is consequential on Amendment 121. Amendment 124, in clause 38, page 45, line 28, after “as” insert “material”. This ensures that regulations under subsection (4) can also make provision about what kind of detriment is classed as “material”. Amendment 125, in clause 38, page 45, line 30, leave out subsection (5).— (Torsten Bell.) This amendment is consequential on Amendment 129.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  The direct answer is that, yes, the amendment comes from discussions with regulators, to make sure that the flow of information is sufficient to live up to Parliament’s intent and that meaningful reports on the saver and growth impacts can be provided. Amendment 107 agreed to .

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  Clause 47 allows for a compliance framework to be developed to ensure that trustees or managers of pension schemes comply with the requirements of chapter 5 of the Bill and take their responsibilities seriously; hon. Members will by now be used to seeing parts of this at the back of sections of pension legislation. It is worth noting up front that amendment 211 replaces the penalty provisions in clause 47 with a new mechanism for introducing enforcement powers via regulations. The regulations could allow for the Pensions Regulator to issue compliance notices, third-party compliance notices and penalty notices. These types of enforcement notice are not unusual, and they appear in other pensions legislation, such as the pensions dashboard regulations and the regulations on climate change governance and reporting. Penalties will be limited to no more than £10,000 in the case of individuals and up to £100,000 in other cases, such as corporate trustees. We have introduced these changes to ensure consistency with other clauses in the Bill, including the provisions related to value for money and small pots consolidation; we discussed the size of those penalties recently. Clause 47 will enable the regulator to remove and replace trustees in the event of non-compliance. Amendment 209 will remove a penalty provision in clause 46 that is made redundant by amendment 211. Clause 48 makes it clear that the measures in this chapter apply to pension schemes run on behalf of the Crown, another standard provision. Clause 49 provides the definitions for terms used in chapter 5 of the Bill, including many of the important ones I have run through today. Amendments 212 and 213 add the definitions of “pension benefit solution” and “qualifying pension benefit solution” to the list of defined terms in clause 49. They do not change the definition of these terms elsewhere in the clauses. Amendment 209 agreed to. Clause 46, as amended, ordered to stand part of the Bill. Clause 47 Enforcement and compliance Amendment made: 211, in clause 47, page 61, line 4, leave out subsections (1) to (5) and insert— “(1) Regulations may make provision with a view to ensuring the compliance of any person with any provision of or under this Chapter. (2) The regulations may in particular— (a) provide for the Pensions Regulator to issue a notice (a ‘compliance notice’) to a person with a view to ensuring the person's compliance with a provision of or under this Chapter; (b) provide for the Pensions Regulator to issue a notice (a ‘third party compliance notice’) to a person with a view to ensuring another person's compliance with a provision of or under this Chapter; (c) provide for the Pensions Regulator to issue a notice (a ‘penalty notice’) imposing a penalty on a person where the person— (i) has failed to comply with a compliance notice or third party compliance notice, or (ii) has contravened a provision of or under this Chapter; (d) provide for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty; (e) confer other functions on the Regulator. (3) The regulations may make provision for determining the amount, or the maximum amount, of a penalty in respect of a failure or contravention. (4) But the amount of a penalty imposed under the regulations in respect of a failure or contravention must not exceed— (a) £10,000, in the case of an individual, and (b) £100,000, in any other case. (5) Any penalty payable under the regulations is recoverable by the Regulator. (5A) In England and Wales, any such penalty is, if the county court so orders, recoverable under section 85 of the County Courts Act 1984 or otherwise as if it were payable under an order of that court. (5B) In Scotland, a penalty notice is enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom. (5C) The Regulator must pay into the Consolidated Fund any penalty recovered under this section.”— (Torsten Bell.) This amendment replaces the provisions in subsections (1) to (5) of clause 47 about fixed penalty notices with a power to make regulations providing for compliance notices, third party compliance notices and penalty notices. Clause 47, as amended, ordered to stand part of the Bill. Clause 48 ordered to stand part of the Bill. Clause 49 Interpretation and general Amendments made: 212, in clause 49, page 62, line 13, at end insert— “‘pension benefit solution’ has the meaning given by section 42(2);”. This amendment adds “pension benefit solution” to the list of defined terms in clause 49. Amendment 213, in clause 49, page 62, line 19, at end insert— “‘qualifying pension benefit solution’ has the meaning given by section 43(6);”.— (Torsten Bell.) This amendment adds “qualifying pension benefit solution” to the list of defined terms in clause 49. Clause 49, as amended, ordered to stand part of the Bill. Clause 50 Corresponding provision in relation to FCA-regulated schemes

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  Before I come to the detail of the amendment, I should re-emphasise the point made by my hon. Friend the Member for Tamworth about the volume of amendments to clause 38 in particular, which is why I asked for the amended clause with track changes to be circulated to the whole Committee. I hope that Members have found that useful. Turning to the amendment, I have a lot of sympathy for what my hon. Friend is trying to achieve. It is important that we monitor progress on the Mansion House commitments and continue to stay focused on the strength of the pipeline. There are parts of the Bill that would already facilitate that, including data collection that is consistent with monitoring the Mansion House progress, and the strength of the pipeline, which was obviously relevant to consideration of the saver’s interest test, and thus left in the Bill. I suggest that, given our sympathy with the idea of this amendment but its interactions with several other existing parts of the Bill, we commit to reviewing it with a view to deciding whether we should come back with something similar on Report, if the hon. Lady is content with that.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 117, in clause 38, page 45, line 4, leave out “may” and insert “must”. This amendment, together with Amendment 118, means that regulations about suspending the requirement for approval under section 28C have to have effect at any time when section 28C has effect as a result of regulations under that section.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  These amendments relate to compliance and enforcement. Government amendment 127 allows the Pensions Regulator to issue risk notices to the trustees or managers of a relevant master trust or the provider of a group personal pension scheme if there were an issue in relation to the scheme relating to the quality requirement. This will require the relevant master trust to develop a resolution plan to address the regulator’s concerns. The regulator may then direct the relevant master trust to implement the measures in that plan. Amendment 128 allows regulations to make provision for the imposition of penalties where a relevant master trust or GPP scheme accepts contributions from an employer when it should not. It will allow the regulator to issue penalties of up to £100,000 in relation to each employer from which contributions continue to be accepted. It will also give the provider the right of appeal against the penalty. Amendment 126 enables the FCA to monitor and enforce compliance of any FCA-regulated person in scope of chapter 3 of part 2 of the Bill. It also provides that the Treasury may make regulations to enable the FCA to take action for monitoring and enforcing compliance of any FCA-regulated person with any provision under chapter 3. I commend the amendments to the Committee.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  We now move to the substance of clause 43 and the proposed amendments. Clause 43 allows schemes to partner with another for the purpose of delivering a suitable pension solution to their membership—or cohorts of their membership. It allows those transfers to qualifying pension benefit solutions when either providing an in-house solution is not reasonably practicable, or a solution offered by another scheme is deemed to provide a better outcome for members. It requires trustees or managers of the principal scheme to identify qualifying schemes that provide solutions that meet the requirements of their membership. That could, for example, include transferring members to a collective defined-contribution scheme. Power is also taken to limit or prohibit the charging of transfer fees. This clause is vital overall, as it provides the flexibility that I have discussed in the course of debate on the previous group of amendments and allows trustees to deliver the best outcomes for their members. Amendment 154 removes a drafting error and clarifies that all occupational pension schemes that provide defined-contribution benefits are included in the definition of relevant scheme, not just those established under a trust. Whether a pension scheme member is receiving a default solution in-house or being transferred to another scheme to receive a qualifying solution, as I said earlier, the policy intent is that they have a similar experience. Amendments 166 to 169 and 173 ensure that there is a parity of requirements on schemes in those cases. Amendments 170 and 171 are consequential amendments, while amendment 172 corrects a minor inconsistency in language. I commend them and the clause to the Committee. Amendment 167 agreed to. Amendments made: 166, in clause 43, page 57, line 10, after “solution”” insert “, in relation to a qualifying scheme,”. This amendment is consequential on Amendment 167. Amendment 168, in clause 43, page 57, line 12, leave out “receiving”. This amendment is consequential on Amendment 167. Amendment 169, in clause 43, page 57, line 15, leave out “eligible members of the receiving” and insert “members of the”. This amendment is consequential on Amendment 167, and also reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases. Amendment 170, in clause 43, page 57, line 16, leave out “eligible”. This amendment reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases. Amendment 171, in clause 43, page 57, line 17, leave out “eligible”. This amendment reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases. Amendment 172, in clause 43, page 57, line 21, leave out “But”. This amendment makes a minor verbal change in light of other amendments to clause 43. Amendment 173, in clause 43, page 57, line 23, leave out “subsection (5)” and insert “this section”. This amendment reflects the fact that, as a result of other amendments, “qualifying scheme” is used more widely in the section. Amendment 175, in clause 43, page 57, line 35, at end insert— “(9A) Regulations may make provision about the conditions in subsections (2) and (3), including about the basis on which the determinations mentioned in those subsections are to be made.” This amendment allows for regulations to make provision elaborating on the conditions in subsections (2) and (3). Amendment 174, in clause 43, page 57, line 35, at end insert— “(9B) Regulations may require a pension scheme of a prescribed description to agree to receive a transfer in respect of the accrued rights of a transferable member where— (a) the principal scheme has been unable, having used reasonable endeavours, to identify a qualifying scheme that is able and willing to do so, and (b) any other prescribed conditions are met. (9C) A requirement under subsection (9B) may only be imposed on a pension scheme that is one or both of the following— (a) a Master Trust scheme within the meaning of the Pension Schemes Act 2017; (b) a consolidator scheme within the meaning of Chapter 2 of Part 2 (consolidation of small dormant pension pots).” This amendment allows for regulations to require certain schemes to act as schemes of last resort in cases where the principal scheme cannot find a qualifying scheme that is willing to receive a transfer. Amendment 176, in clause 43, page 57, line 40, at beginning insert “Regulations under subsection (5C), (10) or (11) are subject to the negative procedure; and other”.—( Torsten Bell.) This amendment applies negative parliamentary procedure to regulations under subsection (5C), (10) or (11). Clause 43, as amended, ordered to stand part of the Bill. Clause 44 Provision and gathering of information

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  These amendments clarify aspects of the approval criteria for prospective new entrants into the multi-employer DC market after the scale requirements come into force. Amendment 112 requires that a new prospective provider must have no current members—it must actually be new to the market. We want to ensure that the route is used only by those for whom it is intended, rather than as a loophole around the main intent of the Bill. Amendment 113 requires that new entrants have strong potential to grow in order to meet the scale requirements under section 28A, and that the prospective scheme in question has an innovative product design. I think we will come to the question of product shortly, but to skip ahead, the regulations would allow us to talk about innovation in the nature of the service, not just in the product. That is a question for us to take away in the design of those regulations. That is not in the Bill itself, but it is an important clarification. The remaining amendments in this group are consequential on amendment 113. They will offer greater clarity to potential applicants to this pathway, and I commend them to the Committee. I thank the hon. Member for Torbay for tabling new clause 3 and acknowledge his wish that the pathway for new entrants into the DC multi-employer market be as supportive as possible for new providers. We of course agree with that sentiment. We want to see fewer, bigger schemes, but not a lack of competition in the longer run, even though we are a long way from that. From an innovation viewpoint, the new clause is not necessary to achieve that aim. Competition will come from the possibility of innovation, but must also flow into the building of scale, which is the overall intent of the legislation. Given that the spirit of the new clause is achieved by the new entrants pathway, I ask the hon. Gentleman not to press it to a vote.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I thank the hon. Lady for rightly raising the important question of communication to members. I draw the Committee’s attention to clause 44, which explicitly aims, in quite some detail, to engage with that question. It contains requirements on providers—again, with the detail to come in regulations—about how they set out their general policy, but also how they communicate to particular individuals as they head towards retirement and, potentially, enrolment in a default solution. It is absolutely right to say that this measure is new for providers, for regulators and for the industry in the UK, and we should always have that in mind. We should take some comfort from the success of automatic enrolment in doing something new. Other countries had moved to auto-enrolment solutions ahead of us, and the same is true here to a degree. In Australia, there is a similar pattern: it has got further ahead in terms of the average size of pots, has seen some of the negative outcomes that we can potentially see in the data in the UK, and has then moved to a version of this and is working that through. We will be able to learn from its experience, as well as just working this through ourselves. The hon. Lady asked how the measure will be taken forward. We aim to launch a public consultation in the spring and summer next year. These requirements would come in earlier than some of the wider changes that the Committee has discussed—on small pots, for example, which will come far later, and on value for money. We think it is urgent that we get on with this, because we are approaching a situation in which DC pots will be significant for some members, but I completely appreciate her point that it is a large change for the industry. Clause 44 requires some direct communications with members. I reassure the hon. Lady that there is nothing in the GDPR or other data protection requirements that would prevent providers from communicating in that way. They will not require consent from members to do it, which is important, because otherwise it would not be effective. There are wider questions about direct marketing—communications that are not about setting out the actual situation—in this space, and I am considering those. They are tied up with questions about targeted support and the rest, but it is important for us to continue thinking about this in the pensions space, where there is a history of downsides to direct marketing. We want to make sure that this is not that, but provision of information about the working of a scheme of which someone is a member.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 196, in clause 45, page 59, line 27, leave out “offer” and insert “provide or make available”. This amendment allows for regulations either to require information to be provided directly to members or to require it to be made available to them.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I will come back on the question about the word “product” and definitions. I reassure the Committee that I will go away and make sure that is clear if it is not clear enough already. The core Liberal Democrat question is, are we baking innovation in? It is a good question for us all to be asking. I think the answer is yes. To broaden the conversation out slightly, we want to see innovation from existing providers as well. We anticipate that there will still be 15 or so large providers in the 2030s. That is still a highly competitive market. Not just looking at costs but also at customer service and all the rest in the value for money regime should be a spur to that innovation. That is a key part of the set of clauses we were discussing last week. I should explicitly note that the scale tests do not cover the most obvious innovation that is likely to come in the market in the coming years, which is CDC schemes. By their nature, if they are to be successful, they will get to scale anyway, but to make their path easier and to be clear that we do see a role for CDC innovation moving forward, those are not part of these requirements. The innovation pathway exists for exactly this reason, as we have discussed. Several Members have raised a question about consultation. I confirm that there is a requirement for a public consultation, which should certainly learn lessons that go beyond the experience of the pensions industry to the wider financial services sector—lessons of competition entry. We talked about that in the banking sector earlier, but the same thing would apply, for example, to other parts of the insurance sector and others. We will take that away. We are very conscious at the moment, in our wider approach to regulation, of providing earlier authorisation, where that can be done. I suspect we may come back to that in the superfunds discussion later this week. Amendment 112 agreed to. Amendments made: 113, in clause 38, page 44, leave out lines 21 and 22 and insert— “(a) the scheme in question has strong potential to grow so as to meet the scale requirement under section 28A, (aa) the scheme in question has an innovative product design, and”. This amendment ensures that the eligibility conditions for new entrant pathway relief are more precisely articulated. Amendment 114, in clause 38, page 44, line 34, leave out from “of” to “(including” in line 35 and insert “ “strong potential to grow” and “innovative product design” ”. This amendment is consequential on Amendment 113. Amendment 115, in clause 38, page 44, line 36, leave out from “has” to end of line 37 and insert “strong potential to grow or an innovative product design”. This amendment is consequential on Amendment 113. Amendment 116, in clause 38, page 45, leave out lines 1 and 2.— (Torsten Bell.) This amendment is consequential on Amendment 129.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  As amended, the clause introduces consequential amendments relating to clause 38 to ensure that the changes needed for the asset allocation and scale measures appropriately wire into existing legislation. The clause does this by making amendments to the Financial Services and Markets Act 2000 and the Pension Schemes Act 2017. The clause makes an insertion into section 1A and an amendment to section 204A of the 2000 Act. It ensures that the FCA’s statutory functions are extended, which would include its new enforcement functions for clause 38 in relation to scale and asset allocation. The second part of the clause adds new authorisation criteria for master trusts into the 2017 Act. These new criteria will require trustees of a master trust to satisfy the Pensions Regulator that they have a sufficient investment capability and continue to have a main scale default arrangement. Introducing these criteria will enable implementation of the Government’s policy objective, set out in the final report of the pension investment review, to ensure schemes utilise the benefits of scale to deliver better investment outcomes. The clause sets out factors that the Pensions Regulator will be required to consider in deciding that the master trust authorisation criteria are met and enables further detail to be set out in regulations. The effect of these additions to the authorisation regime are essential as they help to drive capability within master trusts. I commend clause 39 to the Committee. Government amendments 134 and 135 ensure that the necessary extension of the FCA’s authorisation functions under FSMA encompass only its new role in overseeing the scale and asset allocation requirements and does not extend to other non-relevant requirements in the Pensions Act 2008. It has a constraining effect. Government amendment 136 makes it clear that the addition to section 5 in part 1 of the Pension Schemes Act 2017 regarding decisions on application is about the scheme meeting the scale requirements under condition 1 of section 20(1)(a) of the Pensions Act 2008. Government amendment 137 gives the Secretary of State the ability to set out the meaning of terms in specific areas. I urge Members to support Government amendments 134 to 137. Clause 40 deals with the application of scale and asset allocation measures to Crown schemes. The substantive provisions in chapter 3 take the form of amendments to the Pensions Act 2008, the Pension Schemes Act 2017 and the Financial Services and Markets Act 2000. These Acts already deal with application to the Crown in their own way, and it is not the intent of the Government to disrupt or confuse these settled positions. Accordingly, after consideration, we seek to delete this clause. To be clear, I do not commend the clause to the Committee. Amendment 134 agreed to. Amendments made: 135, in clause 39, page 46, line 38, after “2008” insert “in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,” See the explanatory statement for Amendment 134. Amendment 136, in clause 39, page 47, line 10, leave out “quality” and insert “scale” This amendment changes a parenthetical description so that it is clearer. Amendment 137, in clause 39, page 47, line 27, leave out from “(2)” to end of line 32 and insert— “(4) The Secretary of State may by regulations— (a) make provision about the meaning of terms used in subsection (2); (b) specify further factors that the Pensions Regulator must take into account in deciding whether it is satisfied about the matters mentioned in subsection (1). (5) The first regulations that are made under this section are subject to affirmative resolution procedure. (6) Any other regulations under this section are subject to negative resolution procedure.” — (Torsten Bell.) This amendment expands the power currently in the new section 12A(3) of the Pension Schemes Act 2017, created by clause 39(11) of the Bill, so as to allow the Secretary of State to make provision about the meaning of terms in new section 12A(2) of the Pension Schemes Act 2017.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 203, in clause 46, page 60, line 8, leave out “default”. This amendment ensures that clause 46 operates in respect of qualifying pension benefit solutions as well as default pension benefit solutions.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  We now turn to clause 50, the last clause in this part of the Bill. The overriding objective of this clause, together with amendment 214, is to make corresponding provision in relation to FCA-regulated schemes. Clause 50 inserts into the Financial Services and Markets Act 2000 new section 137FBD, which will deliver default pension benefit solutions to FCA-regulated pension schemes, ensuring that members on both sides of the market benefit from default solutions. Amendment 214 is a technical amendment that refines the requirement on the FCA to deliver those solutions for members of FCA-regulated pension schemes and ensures consistency between FCA and TPR-regulated schemes—a key objective of the Government. It clarifies that the FCA must make rules to ensure that default pension scheme solutions are made available to members of FCA-regulated schemes and, in making those rules, must have regard to provisions made by the rest of chapter 5 of part 2, which we have been discussing and which sets the framework for the TPR to provide those solutions. The FCA must also aim to ensure, as far as possible, that the outcomes achieved by its rules correspond to those achieved under chapter 5, and any regulations made under it regarding TPR-regulated pension schemes. The amendment therefore seeks to ensure that, from a member’s perspective, default pension benefit solutions are provided consistently across the market, whether they are a member of a TPR or an FCA-regulated pension scheme, while giving the FCA the flexibility to deliver that outcome in a way that suits its methods of regulating pension schemes. DWP, the FCA and The Pensions Regulator will work together to develop and deliver default pension benefit solutions, further boosting fairness and consistency across the market. Amendment 214 agreed to. Clause 50, as amended, ordered to stand part of the Bill. Ordered, That further consideration be now adjourned. —(Taiwo Owatemi.)

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  I beg to move amendment 156, in clause 43, page 56, line 29, leave out— “a member of the scheme” and insert— “eligible members of the scheme (whether comprising the members of the scheme generally or a subset of those members)”. This amendment clarifies how the exclusion in clause 43(1) operates.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

  More

  This is a group of minor amendments, mostly aiming at improving the clarity of proposed new section 28F, for example by removing duplication. I draw Members’ attention to the most significant amendments, which are amendments 117 and 118. They make clear that the Government must introduce the savers’ interest exemption mechanism if they are to introduce asset allocation requirements. That is a “must” rather than a “may” because the Government’s intention is that there must always be a savers’ interest exemption.