Pension Schemes Bill [HL] — House of Lords, 2017-04-05
Topic: Labor
Oliver Michael Robert Eden (Conservative, Centre-right): I am grateful to the noble Lord. It is a matter that is possibly more in the hands of the Opposition than those of anyone else—but it is also a matter for all other Members of the House to put in their views, if they wish. The groupings are designed purely to assist the House and, as the mantra makes clear, they are informal and can be broken by any noble Lord A number of questions were put forward by the noble Baroness, Lady Drake. Again, I commend her for all the work on this Bill; I am grateful that it was largely my noble friends Lord Young and Lord Freud who had to deal with her expertise at those earlier stages, rather than myself. I come to it late, and have learned a certain amount in the course of proceedings—and, no doubt, I shall learn more in due course, particularly when we get to the regulations referred to earlier I come to the first of the noble Baroness’s questions, when she asked what further plans the department had for how things would be taken forward. My honourable friend the Minister for Pensions, who takes this Bill and all within it very seriously, referred in Committee to conversations that he had with representatives of certain pension funds who were then contemplating a system for allocation among themselves of any master trust that was going to wind up, if the market did not provide a proper destination. Those discussions will continue and, no doubt, my honourable friend, if he has any further points, will be able to speak to my noble friend Lady Altmann and others who have concerns My noble friend Lady Altmann was also worried about the confidence that we had that the risk of a master trust failing in a catastrophic manner is very low. I would still maintain that, and I think so would my honourable friend. The Pensions Regulator has been working very closely with the master trusts, and the work certainly gives us all in the department the comfort that the risk is low. The regulator continues to proactively assess the level of risk in the master trust market, and so will be alert to any changes. We hope that the regulator will publish information, including on confidence in the levels available in due course The noble Baroness, Lady Drake, also raised the question of how the Government will be satisfied that the receiving scheme is sustainable and well governed. Any receiving scheme would have to be regulated by the appropriate regulator; all the occupational schemes will be overseen by the Pensions Regulator and all the contract schemes will be regulated by the FCA. We hope that that will provide the appropriate coverage Finally, the noble Baroness asked about the Pensions Regulator and how it would apply the prohibition. The Bill provides the power to legislate on restrictions on charges in non-master trust receiving schemes. How those restrictions on charges would operate where the receiving scheme was not regulated by the Pensions Regulator would form part of future discussions if these regulations were considered to be necessary. For instance, if the scheme was regulated by the FCA, there would be discussions with the FCA about how to achieve this As the regulator of the exiting scheme, the Pensions Regulator would have responsibility and oversight over this scheme’s actions. The master trust pursuing continuity option 1 will have to set out in its implementation strategy which scheme it intends to use as its receiving scheme. The exiting master trust will have its implementation strategy approved by the Pensions Regulator, which also has the power to direct the trustees of the exiting master trust where they are failing to comply with their duties under the Bill. While the Pensions Regulator may not be the regulator of the receiving scheme, it will have oversight and powers it can use in that situation I hope that that deals largely with most of the questions. If there is anything I have failed to address, obviously, I will write. However, there will be further opportunities as we consult on those regulations over the coming year and next year to deal with these matters. Again, I give the assurance that my honourable friend the Minister for Pensions, as well as my right honourable friend the Secretary of State, will keep all this in mind and will be open to all comments that noble Lords wish to make.