As expected, in today’s Queen’s speech, the Government has confirmed that it intends to reintroduce the Pension Schemes Bill before Parliament.
The Bill was first introduced three weeks before Parliament was dissolved ahead of the General Election. We expect the Bill to be reintroduced early in the New Year and for the content to be substantially the same as the original version of the Bill, introduced on 15 October 2019. In particular, the Bill will:
- introduce new criminal offences and civil fines of up to £1 million for failures in relation to defined benefit (DB) pension schemes
- enhance the powers of the Pensions Regulator
- introduce new scheme funding requirements for DB schemes
- enable employers to establish Collective DC schemes (based on the model developed by Royal Mail and its unions), and
- provide a framework to support the creation of pension dashboards.
The Pensions Regulator is also due to launch the first stage of a two part consultation on its new DB funding Code of Practice early in the New Year. This will build upon some of the new requirements in the Bill, including the requirement for trustees of DB schemes to set new long-term funding and investment targets for their scheme. The new Code will also introduce a new twin track approach for the approval of a scheme’s funding arrangements – fast track and bespoke.
To find out more about the potential impact of the new criminal offences, civil fines and regulatory powers and the new scheme funding requirements, check out our previous blogs:
- Directors, banks and investors put on notice as new criminal sanctions and regulatory powers are significantly wider than expected
- New funding requirements likely to increase funding demands on DB scheme sponsors