Pension Schemes Bill [Lords] — House of Commons, 2017-03-22
Topic: Labor
John Simon Bercow (Conservative, Centre-right): With this it will be convenient to discuss the following: New clause 2—Member trustees— "(1) By a date to be set by the Secretary of State in regulations, approved Master Trust Schemes must ensure that at least a third of the trustees of the scheme are Member Trustees (2) Member Trustees must be individuals who are— (a) members of the Master Trust scheme; and (b) not members of senior management of a company that is enrolled in the Master Trust scheme (3) Member Trustees must be appointed by a process in which— (a) any member of the scheme who meets the condition in subsection (2) is to apply to be a Member Trustee, (b) all the active members of the scheme, or an organisation which adequately represents the active members, are eligible to participate in the selection of the Member Trustees, and (c) all the deferred members of the scheme, or an organisation which adequately represents the deferred members, are eligible to participate in the selection of the Member Trustees (4) Member Trustees should be given sufficient time off by their employer to fulfil their duties (5) For the purpose of this clause "senior management", in relation to an organisation, means the persons who play significant roles in— (a) the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or (b) the actual managing or organising of the whole or a substantial part of those activities." This new clause requires Master Trusts to make provision for some form of member representation within Master Trusts. New clause 3—Member representation and engagement— "One year on from the registration of Master Trusts by the Pensions Regulator, the Government will fully review member trustee representation, member engagement and annual member meetings." This new clause requires the Government to set up a review into member representation and engagement within Master Trusts. New clause 4—Requirement to hold an Annual Member Meeting— "(1) The trustees of an authorised Master Trust scheme must hold an annual meeting open to all members of the scheme. (2) The Master Trust must take all reasonable steps to make the meeting accessible to all members, this includes making arrangements for— (a) scheme members to observe the meeting remotely, and (b) scheme members to submit questions to trust members remotely." This new clause requires Master Trusts to hold an Annual Member Meeting, and sets out ways to ensure members are properly given the opportunity to be involved. New clause 5—Excluded groups— "(1) The Secretary of State must, before the end of the period of 12 months from the day on which this Act receives Royal Assent, establish a review of participation in Master Trust schemes (2) The review must consider what steps can be taken to increase the participation in Master Trust schemes by the following groups— (a) carers, (b) self-employed, (c) workers with multiple employees, and (d) workers with annual earnings below £10,000 (3) One of the options considered by the review to improve participation must be changes to the terms of auto-enrolment." This new clause enshrines the requirement on the Government to do something specific for currently excluded groups. New clause 6—Exit fees— "(1) The Secretary of State may by regulations restrict or set limits to exit fees paid by members of a Master Trust scheme (2) For the purposes of section (1) "members" includes past and current, active and deferred members." This new clause makes provision for the Secretary of State to restrict exit fees paid by Master Trust schemes’ members. New clause 7—Asset protection for unincorporated businesses— "The Secretary of State must, by regulations, make provision to amend section 75 of the Pensions Act 1995 in order to protect unincorporated businesses who are at risk of losing their personal assets including their homes." New clause 8—Review of actuarial mechanisms for valuing pension scheme liabilities— "Within six calendar months from the day on which this Act comes into force, the Secretary of State must conduct a review of the actuarial mechanisms used to value pension scheme liabilities under section 75 of the Pensions Act 1995." New clause 9—Non-associated multi-employer schemes: orphan debt— "The Secretary of State must, by regulations, exclude from the calculation in section 75 of the Pensions Act 1995 the orphan debt in any non-associated multi-employer scheme." Amendment 5, in clause 8, page 5, line 41, after "scheme" insert "or scheme funder" The financial sustainability of the scheme funder must be taken into account when assessing a Master Trust scheme’s financial sustainability. Amendment 6, in clause 11, page 8, line 1, leave out subsection (b) and insert— "(b) either the only activities carried out by the body corporate or partnership are activities that relate directly to the Master Trust scheme, or if the body corporate or partnership carries out activities other than those defined as "restricted activities."" This amendment allows for exceptions to the requirement that a scheme funder must only carry out activities directly relating to the Master Trust scheme for which it is a scheme funder. Amendment 1, page 8, line 13, at end insert— "( ) A minimum requirement of annual reporting of administration, fund management costs and transaction costs for each asset class, drawdown product and for active and passive asset management strategies." This amendment would introduce annual reporting and inclusion of transaction costs requirements for Master Trusts. Amendment 7, in clause 10, page 7, line 23, at end insert— "(6A) The Secretary of State may by regulations define "restricted activities" and these regulations must set out activities that a scheme funder cannot engage in to minimise risk of losses or liabilities which might deplete or divert its financial resources." This amendment makes provision for the Secretary of State to define "restricted activities" by regulation, including a list of specific activities restricted in order to minimise risk of loss by Master Trust scheme funders. Amendment 2, in clause 22, page 16, line 28, after "employers" insert "and scheme members" This amendment ensures that scheme members are told of triggering events as well as employers. Amendment 4, in clause 31, page 23, line 16, leave out paragraph (d) This amendment removes the part that allows Master Trusts to halt making payments to pensioners in the event of a pause order. Amendment 3, page 23, line 27, at end insert— "(f) directive that employers will retain both their own and employee contributions pending resolution of the pause order." This amendment requires employers to hold onto employee and employer contributions during a pause order. Amendment 8, page 23, line 27, at end insert— "(f) a direction that further contributions or payments to be paid towards the scheme by or on behalf of any employers or members (or any specified employers or members) are collected and held in a separate fund until the conclusion of the pause order;" This amendment provides the Pensions Regulator with an alternative to stopping payments to the schemes under subsection 5(b) of a pause order. Amendment 9, page 23, line 39, at end insert— "(7A) The Secretary of State may by regulations set conditions on the terms of a separate fund used for purposes under section 5(f)." This amendment is consequential to amendment 8.