Torsten Bell MP: speeches

Speeches

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  I beg to move amendment 29, in clause 11, page 11, line 34, after “publication” insert “or sharing”. This amendment ensures that information on the database mentioned in clause 11(2)(d) can be made available to (for example) the Secretary of State for Work and Pensions for the purpose of internal review, as well as made available for publication.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  To ensure consistency, comparability and transparency of the value that arrangements provide, it is essential that all arrangements undertake the same process in the same way and that there is sufficient oversight of the process by the regulator. That is why clause 17 sets out the range of ways in which the regulations may make provision for ensuring compliance with the value for money framework. The Pensions Regulator will be able to issue compliance and penalty notices to trustees, managers and third parties in breach of their VFM obligations. These notices enable the regulator to set out the steps that must be taken to ensure compliance with the VFM requirements. Financial penalties can be imposed, to a maximum of £10,000 in the case of an individual and up to £100,000 in other cases. Those figures align with other powers we have taken in part 2. There is also provision for the withdrawal of a penalty notice and for the Pensions Regulator to challenge an incorrect VFM rating. Clause 18 makes it clear that the provisions in this chapter apply equally to pension schemes run by or on behalf of the Crown and to Crown employees. This is the standard approach in legislation to ensure that Crown-operated schemes are covered by the same rules, unless explicitly excluded. Clause 19 is the interpretation clause, which sets out the meaning of the terms used in the VFM clauses 10 to 17. I commend these clauses to the Committee. Question put and agreed to. Clause 17 accordingly ordered to stand part of the Bill. Clause 18 ordered to stand part of the Bill. Clause 19 Interpretation of Chapter Amendment made: 35, in clause 19, page 20, leave out lines 13 and 14. —(Torsten Bell.) This amendment is consequential on Amendment 28. Clause 19, as amended, ordered to stand part of the Bill. Clause 20 Small pots regulations

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  Forty-third.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  To ensure effective comparability across arrangements, it is necessary to have a clear and standardised assessment of how value is determined. Clause 12 will enable those undertaking the assessment to be clear about the method that they should follow and the criteria to be used. It will allow regulations to detail how a VFM assessment is to be made, the factors that need to be taken into account when making comparisons, the metrics to be used and, importantly, how such comparisons should be made. The clause also gives the flexibility for VFM regulations to introduce benchmarks that schemes should compare their arrangements against. That is necessary to improve comparability and transparency, and to help drive competition among schemes. That will help improve returns for members. I turn to new clause 42, tabled by the Liberal Democrats; I am grateful to them for their contributions to the debate. Measuring the quality of services provided to members is an important aspect of the VFM framework—I support that entirely. It ensures that we assess not only the quantitative value provided by pension schemes, but the qualitative. Under the VFM framework, the Secretary of State will have the power to require schemes in scope to report on and assess the quality of the services provided to their members; I just made the point about the absence of that in Australia but the fact that it will have a role within our framework. Clause 11 provides for categories of information that schemes may be required to disclose to include “the quality of services provided to members of the scheme”. Further detail on the metrics for measuring quality of services will be set out in regulations. It is crucial that metrics are set out in the regulations so that we have flexibility to respond to changes in the pensions market and to learn from operational delivery—again, that is something we have seen in Australia. For that reason, we believe that the current legislative framework is sufficient. I ask the hon. Member for Torbay not to press the new clause.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  To being probed.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  The hon. Lady is not only telling me I am going to be fired, but then clearly angling for the job by again giving the speech I was going to give. I agree that there is broad consensus across the room that there is no perfect answer, but there is a balance of risks. We are attempting to introduce a large change to the pension system that will affect millions of people, and we need to do that in a steady and gradual way—yes, with the intention of considering going further in the future, but not in a rushed way. Let me talk through a few of the issues and points that were raised. As I am sure those proposing the amendment know, our view is that we should stick with the £1,000 limit at this point and then come back to consider future increases once the system has been put in place. We want all hon. Members to have it in their heads that the implementation of this aspect of the Bill is on a slightly slower timeline than some of the other bits we have discussed—for example, because we need the value for money regime to be in place before we move to the small pots part of the picture. Directly on the question of where the £1,000 limit came from, it came from extensive engagement and formal consultation with industry stakeholders over quite a large number of years. There is no academic answer to why it is £1,000 and not £900 or £1,100, but it does strike a balance between the pressures on a competitive industry and the level of administrative hassle, and the number of people who will be affected. We need to build a system that can manage the flows. To give Members some idea of quantity, the evidence gathered from pension schemes last year showed that the £1,000 threshold would bring approximately 13 million pots into scope. I appreciate the logic behind calling for a higher threshold, but this one would mean a significant 13 million pots. The hon. Member for Wyre Forest is looking aghast at that number. I am just providing it as a bit of context. For further context, it already represents more than half of all deferred small pots, so it is not that we are trying to affect hardly any to start with; it is a significant number. That is in 2024 terms; the picture will look different in 2030 or so when the measure comes in, but that helps Members to have a sense of it. On how to change the threshold, I can absolutely provide the reassurance that was asked for: that will be done in a public-facing way. An affirmative resolution is always required to change it. Unlike some other aspects of the Bill, where the first regulations are subject to the affirmative procedure but later changes can be made through the negative procedure, any change to the pot size requirement will always require the affirmative procedure, for exactly the reasons that have been discussed, which are that this would be a material change that affected the industry and individuals as they go through. Certainly, we would consult on that in the future. For those reasons, I am glad that this is a probing amendment. I hope I have been probed, and we would like the clause to stand part.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  We are now turning to the value for money framework, which relates to defined-contribution schemes. As I said, we are aiming for a full spectrum of value to be considered by the framework. I do not think I would normally say this, but I am worried that the hon. Member for Wyre Forest is lacking a bit of patriotism, because the Australian scheme does not take into account some of the wider metrics, such as customer service, that he is rightly encouraging the scheme to focus on, whereas the intention in the Bill is exactly as he sets out—that we should be taking into account not only those longer-term returns, which are ultimately what we should all care about, but also customer service. I completely endorse his objectives. The value for money clauses have been drafted in a way that allows the Secretary of State the necessary flexibility to set out in regulations the categories of information for the VFM assessments of the kind that are set out in the amendment, such that we can adapt to changes in the pension landscape and learn from operational experiences, as we are already learning from the experience in Australia. There are things to learn from Australia that have gone well, and there are certainly things to learn from that have gone less well. Although the amendment recognises the importance of assessing value across all the pillars of value, it is vital that we do not restrict the framework by embedding the exact details of the categories of information in the primary legislation. VFM metrics, benchmarks and the assessment process will be specified through regulations, providing clarity for industry on how to report on and assess value provided by in-scope schemes—which, as I said, are basically at this stage workplace defined contribution schemes. Over time, those will be reviewed to make sure that they continue to reflect market changes and the needs of savers. For those reasons, we believe that the clauses are spot on. I urge the hon. Member for Wyre Forest to withdraw the amendment.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  I think I am grateful to the hon. Lady for her attempt to fire me. To clarify, carrying out the kind of prescribed stress scenarios and assessments set out in the amendment would require the Department for Work and Pensions to examine the DB landscape. In this specific area, that is the role of TPR and the PPF. I turn to amendment 258. The first regulations on surplus will be subject to the affirmative procedure, for exactly the reasons that have been set out, and exactly because at that point they will be new but also comprehensive. As with every other pensions Bill, what we do not want to see is the affirmative procedure being used for small, technical changes that come to those regulations in the years that follow. However, our approach does allow for the necessary debate when those regulations are made. On that basis, I urge hon. Members to support the Bill as drafted.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  My support for the Welsh Government’s Well-being of Future Generations (Wales) Act 2015 is on the record, so I get to disagree with the hon. Member for Aberdeen North on something, which will be a relief for everybody. I thank the hon. Member for Torbay for tabling the amendments. Clearly, addressing climate change is absolutely central to this Government’s agenda. It needs to be done in the right way. Pension funds hold significant capital, and I am pleased to say that at every conference and every session I hold with people involved in the industry I see that investors and pension schemes do now use their influence on companies to encourage them to take responsible action. That has been a big change over the course of the last decade. It can lead to better risk management and potentially also improve returns on investments, as well as helping companies to perform better in relation to environmental targets. My overall argument, though, is that trustees must already consider financially material risks, including ESG factors. The statement of investment principles and the implementation statement are key tools that are already in place for disclosing a scheme’s approach to ESG issues, including climate change. Ultimately, the amendment is about disclosures; that is what it aims to achieve. Additionally, large schemes with assets above £1 billion, which in future will be the majority of schemes because of the scale measures that we will come back to, must also report on climate-related risks and opportunities, in line with the Task Force on Climate-Related Financial Disclosures. We are looking to strengthen sustainability reporting, exactly as the hon. Member for Torbay wishes to see, through new UK sustainability reporting standards and our transition plan’s commitment, which the Government consulted on this summer. Taken together, our policy initiatives will modernise the UK’s framework for corporate reporting, giving pension schemes vital information about companies’ decarbonisation plans and about whether to escalate their engagement efforts with investee companies on environmental issues. The DWP is contributing to that work and will review the effectiveness of climate reporting requirements later this year, as part of our post-implementation review of the requirements of the Taskforce on Inequality and Social-related Financial Disclosures. Given the existing reporting requirements, the Government’s position is that we will gently resist the amendments, to avoid duplication.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  That is a fair question. The most prevalent example will be people whose existing pot, although small, has unusual and valuable guarantees attached to it, or benefits that they would lose if they transferred into the default fund of another provider. That is likely to be the most common use of the clause. The clause will provide for transparency by allowing regulations to be made to set out in more detail how those decisions and others will take place. Given the admin costs and unprofitability of small dormant pots, we do not expect schemes to abuse this exemption. For the benefit of people who do not spend lots of time looking at these matters, I should say that lots of schemes are happy to see small pots go, because they are expensive for them to operate; they are neither in the provider’s interest nor in the saver’s. This clause strikes a careful balance. Clause 24 will ensure that pension savings are not left idle, requiring all eligible pots to be held by a default consolidator. As Members will know, millions of workers accumulate small pension pots as they move between jobs. Specifically, the clause will allow for the transfer of those dormant pots without requiring active consent—again, that is something that Governments do not do lightly, but it is required by the best interests of savers in these cases—where a transfer notice has been issued and no objection received from the member, as I set out in relation to clause 22. If a member does not opt out, the trustees and managers of the scheme are required to act on the transfer notice and transfer the pot to the designated consolidator. Clause 24 also provides legal certainty, because it will empower schemes to consolidate pots even if doing so breaches existing scheme rules. That removes administrative barriers and places the member’s interest at the heart of the system. Clause 25 plays a role in providing legal clarity and continuity for individuals whose small dormant pots are transferred. The clause sets out what happens when a pension pot is moved to a different pension scheme or a different arrangement within the current scheme. This ensures that an individual’s membership status, rights and obligations are automatically and seamlessly updated at the point of transfer—so it is not just that a member’s pot has been transferred, but that they have become a member of the scheme that they are entering, even though they have not signed up to a contract explicitly in so doing. This means that they automatically acquire all the rights and responsibilities that come with that membership. In schemes where membership results in a new contractual relationship, the clause will deem that a new contract is formed at the point of transfer. Clause 26 will play a critical role in ensuring that the transfer of small pots to consolidating schemes is undertaken in a legally robust and administratively efficient manner. By establishing clear timeframes for transfers, it will allow for the safe and effective consolidation of small dormant pension pots. This clause introduces two key timing rules. First, it mandates the minimum 30-day notice period before any transfer or change of arrangement can take place. That gives individuals the opportunity to review the proposal and respond. That time period is aligned to the approach taken for members who wish to opt out of automatic enrolment. Secondly, the clause sets out a maximum one-year deadline for completion of the transfer or change of arrangement. It provides clarity and operational certainty for pension schemes and savers. That also enables schemes to maximise the use of bulk transfers, supporting a lower-cost and more efficient transfer process, rather than having shorter deadlines that force them to move individuals in small batches. It also ensures that the small pots consolidation framework remains responsive and co-ordinated. If trustees and scheme managers are waiting for proposals from the small pots data platform, the transfer period can be extended. This clause strikes the right balance by protecting savers and making sure they have time to act, while also providing an impetus for timely action in the consolidation process. I am grateful to members of the Committee for listening to all those points, and I commend clauses 21 to 26.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  I thank the hon. Members for Torbay and for Wyre Forest for their amendments. On amendment 264, I hope that I have already reassured hon. Members that there are many safeguards built into the policy for surplus release, both at an individual scheme level and at a wider policy level, including the ultimate control of trustees, the need for prudent funding to be maintained and the actuarial certification. The Government’s view is that it is not for the Secretary of State to assess every single scheme in the way that the amendment intends. To offer some more reassurance, however, TPR and the PPF have carried out scenario testing in this area; we heard the PPF chief executive’s reassurance in oral evidence on Tuesday. In that regard, I do not think the amendment is necessary. It would also involve the Secretary of State holding a lot of evidence about every single DB scheme in the country, which I do not think is a good use of resources.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  It will be a great relief to everybody to hear that clause 13, although vital, is relatively small. Importantly, it enables requirements relating to member satisfaction surveys, of a kind that I know hon. Members are supportive of, to be set out in the value for money regulations. As I have just argued, quality of service is one of the key pillars of the value for money assessment, and member satisfaction is a key aspect within that pillar. These surveys will allow schemes to better understand their members’ experience and to gauge just how good a service they are providing for scheme members. Members’ experiences and views on the quality of service will provide inputs to the holistic assessment of value that this entire part of the Bill aims to offer.

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  I thank the hon. Member for those questions. She is right to mention the dashboard, and I will say two things about that. First, although these are different systems, there are lots of learnings from the process—as we heard from Chris Curry on Tuesday—not least the impetus that it has provided to schemes to make sure they have put all their record keeping in order. For them to be able to engage with the dashboard, they now have a legal requirement to have that data in a standard format. It is also about how the central system works, but it will be a different system, so the hon. Member is right to raise those questions. I do not want to offer her total certainty because that is not available to me for a scheme that is looking to be operational in the next decade. We have intentionally left that longer timeline for exactly the reasons that the hon. Member has outlined. I can reassure her that very extensive engagement has been going on with industry about this. I mentioned the feasibility study, but there has also been heavy engagement, including on the security element that she mentioned. That is absolutely key, and lessons definitely have gone through from the dashboard approach to make sure that we are happy with how that will take place. I hope that provides her with some—if not perfect—reassurance. Question put and agreed to. Clause 21 accordingly ordered to stand part of the Bill. Clause s 22 to 26 ordered to stand part of the Bill. Ordered, That further consideration be now adjourned— (Gerald Jones .)

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  Amendments 28 and 35 introduce changes into chapter 1 of part 2 of the Bill. Amendment 28 ensures that the value for money framework is capable of applying to hybrid schemes—schemes that provide both money purchase benefits and other benefits. Amendment 35 is minor and consequential to amendment 28. The amendments are of a minor and technical nature and do not alter the policy. I commend them to the Committee. On a point of order, Sir Christopher, should I proceed to comment on the other amendments or allow those proposing other amendments to come forward before I turn to the clause stand part?

• 4 Sept 2025 · Pension Schemes Bill (Fourth sitting) · Hansard source

  More

  I beg the Committee’s patience, as a number of clauses are grouped here—Members can thank the powers that be for that—and I will run through them all. Clause 21 enables the Government to introduce a small pots data platform. This platform will be responsible for determining where each small dormant pot should be consolidated. It will ensure that decisions about where pots should go are made consistently, transparently and with the members’ best interests in mind. International evidence from other countries, such as Australia, with similar pension systems to the UK has shown that a central platform improves consolidation outcomes, rather than just putting duties on schemes to sort it out. This clause establishes the framework to allow for the necessary infrastructure to be built to support data matching and pot consolidation. The Government believe that the infrastructure will be required to support pension schemes to deal with the volume of small pots that left the hon. Member for Wyre Forest aghast five seconds ago, effectively and efficiently. As Members may know, we recently worked with Pensions UK, who have undertaken a feasibility review to examine and assess the technical requirements of the small pots data platform. The Government will consider that work as part of our next stages in developing the necessary infrastructure and the underpinning legislation. However, before committing to how best to deliver this infrastructure, we must undertake that full and proper assessment of capabilities. Clause 22 enables the Government to ensure that members are properly informed about any action that is taken to consolidate their small dormant pension pot. Transfer notices will be the key point of communication between the scheme and the member. We have not had the time to make this point yet, but obviously it will be up to members to opt out of consolidation should they so wish.

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  I beg to move amendment 7, in clause 1, page 1, line 6, leave out “for England and Wales”. The amendment would secure that Clause 1 applies to a pension scheme for local government workers for Scotland, as well as a scheme for local government workers in England and Wales. Clause 1 does not extend to Northern Ireland (see Clause 100).

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  I am happy to give that commitment. I am not aware of any administering authorities in Scotland that would be affected, but I am happy to take that point away. Question put and agreed to. Clause 4, as amended, accordingly ordered to stand part of the Bill. Clause 5 Mergers of funds

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  I will try to confine my remarks to the amendment and the points made about it; I am not going to encourage us to focus on the grouping provided. I thank the hon. Member for Wyre Forest for the amendment. I agree with him on many points he made, including that the LGPS is a success story for local investment, with authorities and pools already playing a major role in their communities. We are committed to ensuring that continues, but we also need to ensure it is done in the right way, delivering the right returns for each scheme. As I said, every LGPS authority will be required to set out its approach to local investment in its investment strategy, providing some of the transparency that the hon. Member for Aberdeen North just set out, including their target allocation. They will need to have regard to existing local plans and priorities. I want to offer the hon. Member for Wyre Forest some reassurance—this goes directly to the point made by the hon. Member for Aberdeen North—that via regulations and guidance, we will already require each pool to report annually on local investments made on behalf of their authorities. The intention of the amendment will be delivered via those regulations and that guidance. On that basis, I am glad that he intends to withdraw his amendment, but I recognise his point. On the wider question of pool advice, and whether there is a risk of pressure from strategic authorities to make investment decisions that are not consistent with their fiduciary duty, the hon. Member for Wyre Forest should see these reforms as supporting in that respect. Remember that these pools will now all be FCA-authorised. There are significantly improved governance arrangements. If anything, this should provide certainty. It should already not be the case legally, anyway, but the stronger governance arrangements will support that. The hon. Member for Torbay rightly asked about how administering authorities and pools will think about the balance, weighing the impact on their local economy. As he will be aware, the fiduciary duties are clear about what the objective is, and the Bill is clear on the respective roles, both of the administering authorities in setting their strategic asset allocation, including to local investments, and of the pools in making those decisions, taking into account the available returns. I think that provides much of the balance that he rightly pointed out is an inevitable issue within this. I should also be clear that the LGPS will invest not just across the whole of the UK—rather than just in individual areas—as the hon. Member for Torbay talked about, but also around the world. That is what the LGPS does today and will continue to do.

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  Clause 2 sets out how assets will be managed in the LGPS under the reformed system of asset pooling. It requires that asset-pooling regulations introduced under clause 1 include requirements for all LGPS assets to be managed by pool companies. The clause would therefore introduce a statutory requirement to consolidate all LGPS assets into those pools, delivering the significant benefits that I know all hon. Members present agree on. The clause also sets out that the regulations must require administering authorities to formulate, publish and keep under review an investment strategy for their authority’s assets. It also stipulates that regulations may set out from whom administering authorities can take advice on their investment strategy, a point raised by the hon. Member for Wyre Forest. The Government intend to use regulations to require that the pool be the primary source of advice. That will ensure that advice is provided on a consistent basis and free from competing interests, given that pools exist solely to serve their administering authorities. That is an important wider point to remember: the administering authorities are the shareholders of pools and are working together to deliver for members; they are not competing interests. Regulations must also require administering authorities to co-operate with strategic authorities to identify and develop appropriate investment opportunities. This requirement will soon see the LGPS involved at an earlier stage on local investment opportunities. For the purposes of this provision, for England the definition of strategic authorities matches that in the English Devolution and Community Empowerment Bill, while for Wales it includes corporate joint committees. Members may wish to note that there is a reciprocal duty on strategic authorities in the English Devolution and Community Empowerment Bill. In summary, the Government are introducing the provisions to finalise the consolidation of assets into pools, and to codify the role of the administering authorities in setting investment strategies and how that engagement with strategic authorities will happen. I thank the hon. Member for Wyre Forest for tabling new clause 31, which would require the Government to publish guidance on how LGPS surpluses—of which there are now more, which is welcome—can be deployed to address financial needs in local authorities. I recognise that the hon. Member seeks to support local authorities in considering their financial positions against potential funding surpluses. Decisions on employer contribution rates in the LGPS are rightly taken locally, not by central Government. Contribution rates for employers are set every three years as part of a valuation process—which hon. Members will know is approaching shortly—in which administering authorities will work with their actuaries and employers, including local authorities, to determine a contribution rate that is sustainable for employers and will allow the fund to pay out pensions in the future. As part of that process, a local authority is able to utilise a surplus in its funding position by reducing employer contribution rates. The LGPS is currently in a healthy funding position, as I said, and it is expected that some employers will follow that path. But crucially, again, that is a decision to be made locally on the basis of each employer’s needs. The existing statutory guidance says that funds should set out in their funding strategy their approach to employer contributions, including a reduction of contributions where appropriate, and should carefully identify and manage conflicts of interest, including conflicts between the role of the particular administering authority and other local authorities that are participants.

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  I welcome the broad consensus about the direction of travel from everyone who has spoken. I will come first to the remarks from the hon. Member for Aberdeen North, who made some key points. She understandably makes the direct comparison with the LGPS. To a large respect, that reflects the fact that the LGPS is an open scheme where the ongoing contributions are much more of a live question, but I take her point. I will make a few remarks on her more controversial points about the role of trustees and what funds are used for. The powers of trustees are very strong. Trustees have an absolute veto on any surplus release under the clause, as they do currently, and they have fiduciary duties about how they should use their powers. That is stronger than was implied in some of the remarks that we have heard. As for the wider point about pressure on trustees from employers, that can affect lots of issues and is not specific to the one we are discussing today. That is what the fiduciary duties of the trust system exist to protect against and what the regulatory work of the Pensions Regulator ensures does not happen. If there was inappropriate pressure on trustees, it would be a very serious issue. That is not specific to the surplus question—that applies to trustees just doing their job. My strong impression with every trustee I talk to is that they take that duty very seriously indeed. I agree that we should always keep that under review.

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  I absolutely would. I have been making exactly those points to anyone who will listen.

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  The hon. Member rightly returns to an important question. As I set out at the evidence session on Tuesday, our pension policy road map, published at the same time as the Bill, details exactly when we are planning to bring forward regulations. My understanding is that these particular regulations should be consulted on in the spring of next year—if that is not right, I will make sure we come back to him with further details. As I say, the road map provides the details of that timeline. It is a very important question for people to be clear on. In that consultation, I am sure the evidence we have heard will be taken into account. Amendments 260 and 265 correctly aim to ensure that members are well informed and represented when it comes to their pension schemes and retirement. The new paragraphs would be inserted into clause 9 of the Bill, which amends section 37 of the Pensions Act 1995. Section 37 already provides that regulations must require members to be notified in relation to a surplus payment before it is made. This is therefore not about the flexibility of trustees; it is redundant, given the requirements already in the Bill. It is similar to the existing requirement under section 37 of the Pensions Act 1995, and we will again consult on these draft regulations following Royal Assent. Furthermore, trustees already have a clear duty to act in all matters in the best interests of the beneficiaries of their scheme, and they are best placed to decide, in consultation with the sponsoring employer, what actions are best for members—I will not keep repeating that point as we go through the rest of this Bill. Finally, I thank the hon. Member for Wyre Forest for proposing amendment 261, with its requirement for actuarial confirmation that proposed payments from a DB surplus to employers will not adversely affect members’ benefits, and that members have been notified ahead of that release. Those are valuable objectives, but they are already achieved by the robust safeguards in place, including trustee discretion, the prudent funding threshold —on which we will consult—and the actuarial certification that a scheme is well funded. In addition, the defined-benefit funding code and the underpinning legislation already require trustees to aim to maintain a strong funding position, and that is actively overseen by the Pensions Regulator. I believe the safeguards we have put in place put members at the heart of the policy, which is a point of cross-party agreement, and will allow trustees to continue to be the people who strike the correct balance between the benefits for employers and members. I hope this offers some reassurance to the Committee that, for the reasons I have outlined, these amendments are unnecessary; I urge hon. Members not to press them.

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  The powers and duties to make local government pension scheme regulations under this chapter of the Bill are exercisable under the 2013 Act. Clause 6 sets out the amendments required to that Act to ensure that these powers operate effectively. Subsection (2) clarifies that the power to make scheme regulations under the Act is subject to the Bill’s provisions, and it ensures that scheme regulations can include any consequential, supplementary, incidental or transitional provision that is necessary as a result of the Bill. Subsection (3) further clarifies that the requirement to consult on scheme regulations made under provisions in the Bill, which must be satisfied before the regulations can be made under section 21 of the 2013 Act, can be satisfied by consultation carried out before or after the Bill comes into force. Just to spell this out, that is to say that consultation taking place before Royal Assent could contribute to the consultation required. I hope that clause 7 provides a useful interpretation of the terms and definitions in chapter 1 as they relate to local government pension schemes. I urge that clauses 6 and 7 stand part of the Bill. Question put and agreed to . Clause 6 accordingly ordered to stand part of the Bill. Clause 7 Interpretation of Chapter 1 Amendment made : 24, in clause 7, page 7, line 7, at end insert— “‘the responsible authority’ means (in relation to a scheme for local government workers in England and Wales or Scotland)— (a) the Secretary of State, in or as regards England and Wales, or (b) the Scottish Ministers, in or as regards Scotland.”— (Torsten Bell.) The amendment defines the term “responsible authority” for the purposes of clauses in Chapter 1 of Part 1. Clause 7, as amended, ordered to stand part of the Bill. Clause 8 Power to modify scheme to allow for payment of surplus to employer

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  I think I can offer the hon. Lady some reassurance. It is true that within some scheme rules it will be clear that discretionary increases of the kind that we are debating would require employer agreement. I know that that has worried some hon. Members who think that that could be a veto against such releases in a surplus release situation. My view—and the guidance to be released by the TPR will make this very clear—is as follows. It may formally be for the employer to agree to those discretionary increases. The scheme rules may apply to that, although in some schemes the trustees may be able to make that decision on their own—that will be a distinction that will depend on the scheme rules. However, even when the scheme rules say that the employers must agree, they will have a strong incentive to agree with the trustees if they are asking the trustees to release. That is why I say that the process of surplus release will change the dynamic of those discussions, which I recognise are currently not proceeding in some cases because employers are saying a blanket no to discretionary increases. We do not need legislative change to make that happen.

• 4 Sept 2025 · Pension Schemes Bill (Third sitting) · Hansard source

  More

  It is for those forming the pooling companies to agree their own arrangements. The hon. Member rightly raises the question whether people are shareholders or clients of a pool. There is only one current administering authority that is a client rather than a shareholder of a pool, so in the overwhelming majority of circumstances we are talking about shareholders. However, the legislative basis for the pooling allows for that in future, if for some reason that was the way forward that some administering authorities and pools chose. Broadly, the same picture applies to most questions in this space: we expect administering authorities and pools to work together to agree their governance arrangements, and that is what they are doing. Amendment 15 agreed to . Clause 1, as amended, ordered to stand part of the Bill. Clause 2 Asset management Amendments made: 16, in clause 2, page 3, line 5, leave out “for England and Wales”. The amendment would secure that Clause 2 applies to scheme regulations relating to pension scheme for local government workers for Scotland, as well as scheme regulations relating to a scheme for local government workers in England and Wales. Clause 1 does not extend to Northern Ireland (see Clause 100). Amendment 17, in clause 2, page 3, line 23, at beginning insert “in the case of a scheme for local government workers for England and Wales,”.— (Torsten Bell.) The amendment would secure that, despite the general extension of the scope of application of Clause 2 to Scotland (see Amendment 16), subsection (2)(c) will remain of relevance only to scheme regulations relating to England and Wales.