Landmark pension proposals will protect savers from scams and help tackle climate change
The world leading Pension Schemes Bill will be debated in the House of Commons today (Wednesday 7 October 2020).
We outline how it will revolutionise the UK pensions landscape 鈥� building a safer, better and greener system. These landmark proposals - from dashboards, scam protection, improved governance, to delivering sustainable investment - offer a once in a generation opportunity to usher in changes that will benefit this country for decades to come.
Behind the scenes, we鈥檝e worked tirelessly to introduce measures that will advance the Government鈥檚 goal of ensuring that savers are provided with the necessary support and tools they need to make informed choices about their financial futures.
Key to this is the introduction of pension dashboards 鈥搘hich brings pensions into the digital age by giving people clear information about all of their pensions in one place for the first time.
Everyone deserves to enjoy the retirement they have spent their working lives planning towards. That is why we have outlined provisions to protect against callous scams intended to rob savers of their hard-earned retirement savings.
The Bill will also introduce a legislative framework for collective defined contribution schemes, or CDCs, a new type of pension scheme which spreads the investment risk allowing for greater returns to members and improves schemes鈥� sustainability for employers.
In addition, we鈥檙e consulting on whether to mandate for pension schemes to adopt and report against the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
This will ensure occupational pension schemes take climate change into account as both a risk and an opportunity, and compel trustees to disclose how they have done so to their members, and the public.
Recent Government amendments to the Bill take this further. They add a requirement for schemes to take the Government鈥檚 net zero targets into account, as well as the Paris Agreement goals of limiting the rise of average global temperatures, for the purposes of managing their own climate risk.
Coupled with our ongoing work on 鈥渋lliquid鈥� investments, these climate measures will enable us to mitigate against the dangers of climate change while also grasping the opportunities available as we transition to net-zero.
Finally, the Bill will extend the Pensions Regulator鈥檚 sanctions regime - introducing the power to issue civil penalties of up to 拢1 million and three new criminal offences, including a new sentence of up to seven years in prison for bosses who run pension schemes into the ground or plunder them to line their own pockets.
The powers enacted by the Bill are wide-ranging and will tangibly improve our pension system by making it safer, better and greener. I welcome the opportunity today to discuss them with my fellow MPs.