Government powers to tackle “irresponsible management” of pensions

As part of the Queen’s speech, the government today announced new plans to give the Pensions Regulator greater powers “to tackle irresponsible management of private pension schemes”.

The government said it is enhancing the Regulator’s powers so that “they can respond earlier when employers do not take their pension responsibilities seriously, including taking tougher action against those who recklessly risk peoples’ pension benefits”.

The background briefing to the Queen’s speech also said that the Regulator’s powers would include introducing new criminal offences, with a maximum sentence of seven years’ imprisonment and a maximum fine of £1m. In addition, the Regulator would have powers to obtain information about a scheme and its sponsoring employer to ensure that it is able to “gain redress for pension schemes and members when things go wrong”.

Claire Carey, partner at pensions specialist law firm Sackers, said that while the new powers would likely be the “centrepiece” of the legislation, “as ever, the detail of the Bill will determine just how far-reaching these powers will ultimately be.”

Pensions dashboard moves step closer

Meanwhile, the Bill also announced plans to create a framework for the introduction of the much-anticipated pensions dashboards. They are intended to allow people to access their information from most pension schemes in one place online for the first time.

Indeed, the response to the pensions dashboards announcement has been mostly positive and should bring the UK up to speed with similar modernisation schemes around the world.

“It’s encouraging to see that the pensions dashboard will be included within Guy Opperman’s Pensions Bill,” said Bob Scott, Partner at pensions consultancy LCP.

“Done well, the dashboard has the potential to take engagement to the next level, offering prompts for people to keep retirement savings in mind and ushering a new dawn in pensions planning. Bringing together a complex range of financial data from a number of different providers was always going to be a challenge, but with equivalent service models up-and-running in countries across Scandinavia, as well as the likes of Australia, Belgium and Israel, the UK is right to drive through delivery of the dashboard,” Scott added.

Alongside the framework to support pensions dashboards, the government also announced plans to compel pension schemes to provide accurate information to consumers, ensuring relevant schemes comply.

Parliamentary arithmetic causes problems

However, underpinning today’s Queen’s speech was the particularly chaotic and unusual situation in the House of Commons. Boris Johnson currently fronts a minority government and as such it is widely expected that the contents of the Queen’s speech will not pass through Parliament.

It was clear to Scott that the chaos of Brexit would threaten any potential progress outlined in the Pensions Schemes Bill.

“Whether we will actually see it [the Pensions Schemes Bill] and indeed any other legislation announced will depend on how the latest stage in Brexit unfurls in the run up to 31 October. The risk that the UK will leave the EU without a withdrawal agreement is looking increasingly likely and will bring further confusion and uncertainty to the current political landscape,” Scott said.

Professor Meg Russell, director of the constitutional unit at University College London, told the BBC that it was “curious” the government didn’t wait until the 1st of November for the Queen’s speech, with Brexit negotiations at such a critical stage.

“We have to question whether he wants to introduce those bills,” she said. “The House of Commons denied him an election, but he hasn’t yet said ‘fair cop, let’s knuckle down and get on with it.”

For now, it seems that not even a Queen’s speech can lift the fog of Brexit.