Torsten Bell MP: speeches 2025

Speeches

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  The amendment is absolutely right that trustees should consider a wide range of options when they are developing their default pension benefit solutions. As I have just remarked to the hon. Member for Aberdeen North, I suspect that that will be a big focus for trustees and scheme managers in the years ahead. Clause 42 does make provision for trustees or managers to consider the needs and interests of scheme members. I would emphasise that as the priority, as opposed to considering every option already on the market, because we are looking for them to develop the right solutions. In most but not all cases, that will be in-house; we will come back to some of the cases where they will not be doing that. We do not want to make it sound like an off-the-shelf situation in lots of cases, although I appreciate that doing their job will require them to look across the market. I have a slight worry about setting a hard 10% of membership expressing an objection as a way of vetoing an approach. First, in many cases, there will not be a single default solution for members within a scheme; there will be a number of them for different cohorts within that scheme, not least based on the size of pots or their wider situation. We do not want a subset of a scheme to be able to vote down the solutions for everybody within the scheme, which is what the amendment would allow. The amendment would also allow those who are a very long way from retirement to shape the outcomes for those who are about to come to retirement. My most important point, however, is that individuals have an absolute right to opt out. Although we talk in terms of default, just as we talk about automatic enrolment, the purpose is that this is a softer default than automatic enrolment. That is partly because we are expecting multiple defaults, not a single one where everyone is required to save at least a certain amount, but also because people will be able to opt out and have a range of different defaults. I hope that I have provided reassurance that the Bill already includes important safeguards, and that trustees and scheme managers will already need to consider the issues that the Liberal Democrat amendment rightly puts on the table.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  The purpose of the clause is to help improve pension engagement so that individuals can make better decisions themselves if they want to do so. As I said earlier, this is about softer defaults than we have in the case of automatic enrolment. The clause grants a power to make regulations requiring schemes to offer and provide information to assist members in the selection of their pension benefit solutions. The clause also includes a regulation-making power that could require schemes to monitor rates of decumulation —that is the drawdown of the pension pot used by members—and issue warnings if they believe that that should be changed. That could be used to help prevent individuals from inadvertently running out of money in later life, or it could even be used to recommend increasing withdrawals. Again, we have talked a lot about Australia. I do not know whether we are feeling patriotic at the moment, but one of the lessons from Australia is that in many cases one of the dangers is insufficient drawdown, and people under-consuming in later life. In either case, this approach could potentially help to prevent people from living in poverty during retirement, either because they are not spending enough or because they are drawing down too much early on. The Government’s broader objective is that individuals need not make any decisions about how their savings are invested or how they should take their pension benefits, except to confirm that they want to start receiving payment. That is a big change from the status quo, which is very complicated at the point someone approaches retirement. However, I want to emphasise that individuals will retain their pension freedoms and are able to opt out of any default, should they wish to do so. This provision allows for members to receive information to enable engaged and engageable members to make informed decisions. The clause includes a power to require that the information provided is based on members’ individual circumstances, where those are known to the scheme. The intention is that relevant general information will be provided to individuals. The policy behind this clause is to help bridge knowledge gaps and enhance members’ understanding of their options. I turn to the associated amendments. Amendments 196 and 201 provide clarity that information may be sent directly to scheme members or made available to them, for example via websites. Amendments 198 and 199 clarify that schemes may be required to provide information to their members on any of the options available to them under pension freedoms, not just those available under the default scheme. Amendment 202 clarifies that schemes may tailor the information provided to scheme members using information already held by the scheme. Amendment 197 requires that information provided to scheme members under clause 45 must be “in clear and plain language”. Finally, amendment 200 removes some unnecessary wording. The amendments are all technical in nature. They are not intended to change, but to enhance the deliverability of the policy. Amendment 196 agreed to. Amendments made: 197, in clause 45, page 59, line 28, after “information” insert “expressed in clear and plain language”. This amendment requires that information required by regulations under clause 45 be in clear and plain language, mirroring the requirement in clause 44(6). Amendment 198, in clause 45, page 59, line 30, leave out “default”. This amendment, together with Amendment 199, ensures that clause 45 operates in respect of pension benefit solutions other than default pension benefit solutions. Amendment 199, in clause 45, page 59, line 31, leave out “default”. See the explanatory statement for Amendment 198. Amendment 200, in clause 45, page 59, line 32, leave out “(for example as regards the rate of income withdrawal)”. This amendment removes the suggestion that members would decide the rate of income withdrawal, since that would be determined by the scheme. Amendment 201, in clause 45, page 59, line 33, leave out “given” and insert “provided or made available to a member”. This amendment is consequential on Amendment 196. Amendment 202, in clause 45, page 59, line 35, leave out “obtained under powers conferred by section 44”.— (Torsten Bell.) This amendment removes the reference to clause 44 from clause 45(2), so that information given by virtue of clause 45(1) may be based on information that the trustees or managers hold otherwise than by virtue of clause 44. Clause 45, as amended, ordered to stand part of the Bill. Clause 46 Pension benefits strategy

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 209, in clause 46, page 60, line 36, leave out subsection (4). This amendment leaves out a penalty provision that government amendments to Clause 47 would make redundant.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  In cases where trustees or managers of a relevant scheme have determined that it is not reasonably practical to provide a solution themselves, or that better member outcomes could be achieved if another scheme delivered a solution, they can arrange for the transfers to be made. That is what clause 43 permits. Whether a member is receiving a default solution in-house or being transferred to another scheme to receive that solution, the policy intent is that the member experience should be broadly similar—there should not be a difference in their experience of it. Amendment 164 seeks to ensure that there is parity in the requirement placed on schemes. In particular, the amendment requires schemes to ensure that a scheme receiving transferable members is able to provide a pension benefit solution that meets the needs and interests of the scheme’s membership. Amendment 174 aims to ensure that no scheme will be left in a position where it is unable to comply with the wider guided retirement provisions due to factors outside their control. There is a requirement on schemes to provide guided retirement under the Bill, but if there are factors outside their control that make that difficult, we want to have a backstop that is provided by introducing a power to designate schemes of last resort, which could be used to facilitate transfers from any relevant pension scheme for the purpose of providing a qualifying pension benefit solution. Hon. Members will think of the similar approach that NEST provided in auto-enrolment world—although we are not intending to need it in this case—where employers would always have a scheme they could go to, given that there was a requirement on them to enrol employees. Amendments 161, 162 and 174 merely provide helpful clarifications or otherwise ensure that clause 43 operates in line with the policy intent. Amendment 176 applies the negative parliamentary procedure to regulations relating to highly technical aspects of the policy. These amendments, taken together, provide for small targeted changes to clause 43, and I encourage hon. Members to support them. Amendment 161 agreed to. Amendments made: 162, in clause 43, page 57, line 7, at beginning insert “at such times or in such circumstances as may be prescribed,”. This amendment allows for regulations to specify when transfer arrangements need to be entered into. Amendment 163, in clause 43, page 57, line 8, leave out “facilitating relevant transfers” and insert “effecting a relevant transfer to that scheme”. This amendment clarifies that schemes will be required to arrange with receiving schemes to carry out relevant transfers (not just to facilitate them). Amendment 165, in clause 43, page 57, line 9, leave out “steps required by the regulations” and insert “prescribed steps”. This amendment corrects a verbal inconsistency. Amendment 164, in clause 43, page 57, line 9, at end insert— “(5A) In carrying out the step in subsection (5)(a), the trustees or managers of the principal scheme must have regard to the matters mentioned in section 42(4) (and for that purpose references in those paragraphs to “the scheme” are to the principal scheme). (5B) Section 42(5) applies for the purposes of subsection (5A) as it applies for the purposes of section 42(4). (5C) The trustees or managers of the principal scheme must, at least in such circumstances or at such times or intervals as may be prescribed, review the suitability of any qualifying pension benefit solution in respect of which they have identified a qualifying scheme as mentioned in subsection (5)(a).”— (Torsten Bell.) This amendment ensures that schemes are subject to similar duties in respect of their “transferable members” to the duties to which they are subject in respect of other eligible members.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 112, in clause 38, page 44, line 20, at end insert— “(za) the scheme in question does not yet have any members,” This amendment ensures that relief under section 28E is only available to schemes that are not yet operational.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  Point noted. Amendment 127 agreed to. Amendments made: 128, in clause 38, page 45, line 31, at end insert— “28H Penalties (1) Regulations may make provision about the imposition by the Regulatory Authority of a penalty on the trustees or managers of a relevant Master Trust or the provider of a group personal pension scheme where the scheme— (a) fails to meet the condition in section 20(1A) by virtue of not being approved under section 28A or 28C, and (b) accepts contributions from an employer in relation to a jobholder on the basis that it is an automatic enrolment scheme in relation to that jobholder. (2) Regulations may make provision about the imposition by the Regulatory Authority of a penalty on the provider of a group personal pension scheme where the scheme— (a) fails to meet the condition in section 26(7A) or (7B), and (b) accepts contributions from an employer in relation to a jobholder on the basis that it is an automatic enrolment scheme in relation to that jobholder. (3) The regulations must provide— (a) that a penalty must not exceed £100,000 in relation to each employer from which contributions are accepted as mentioned in subsection (1)(b) or (2)(b), and (b) that there is a right of appeal against the imposition of the penalty.” This amendment allows regulations to make provision for the imposition of penalties where a relevant Master Trust or a group personal pension scheme accepts contributions from an employer in relation to a jobholder on the basis that it is an automatic enrolment scheme in relation to that jobholder. Amendment 126, in clause 38, page 45, line 31, at end insert— “28I Enforcement by the Financial Conduct Authority (1) The Treasury may make regulations to enable the Financial Conduct Authority to take action (in addition to any action it may otherwise take under the Financial Services and Markets Act 2000) for monitoring and enforcing compliance of any FCA-regulated person with any provision of or under this Chapter. (2) The regulations may apply, or make provision corresponding to— (a) provision made by or under this Part in relation to the Regulator, or (b) any provision of the Financial Services and Markets Act 2000, with or without modification. (3) In this section, ‘FCA-regulated person’ means an authorised person (within the meaning of the Financial Services and Markets Act 2000).” This amendment allows monitoring and enforcement functions to be conferred on the FCA in relation to the compliance of FCA-regulated persons with provisions of or under Chapter 1 of the Pensions Act 2008, including the new provisions on scale and asset allocation. Amendment 129, in clause 38, page 46, line 9, leave out subsection (14) and insert— “(14) In section 99 (interpretation of Part)— (a) the existing words become subsection (1); (b) in that subsection, at the appropriate places insert— ‘“group personal pension scheme” means a personal pension scheme which is available, or intended to be available, to employees of the same employer or of employers within a group, but does not include— (a) a stakeholder pension scheme (as defined in section 1 of the Welfare Reform and Pensions Act 1999), or (b) any pension scheme that requires all its members to make a choice as to how their contributions are invested;’; ‘“Regulatory Authority” has the meaning given by regulations under subsection (2);’; ‘“relevant Master Trust” has the meaning given by section 20(4);’; (c) after that subsection insert— ‘(2) The Secretary of State may by regulations define “Regulatory Authority” for the purposes of this Part.’” This amendment consolidates certain interpretative provisions. It also amends the definition of “group personal pension scheme” so that only schemes where all members select their investment approach are excluded. Amendment 130, in clause 38, page 46, line 19, leave out “26(7A), 28E” and insert— “26(7A), (7B), (7C) or (7E),”. This amendment, together with Amendment 132, ensures that regulations relating to the new scale and asset requirements are subject to affirmative parliamentary procedure. Amendment 131, in clause 38, page 46, line 20, at end insert— “(15A) The following provisions of the Pensions Act 2008 (which relate to transition pathway relief) are repealed at the end of the period of 5 years beginning with the day on which they come into force— (a) paragraph (c) of Condition 1 in section 20(1A); (b) section 26(7C)(b); (c) section 28D; (d) the word ‘28D’ in section 143(5)(a).” This amendment provides for transition pathway relief to cease to be available 5 years after the commencement of the scale requirement. Amendment 132, in clause 38, page 46, line 20, leave out “28C,” and insert— “28C (other than subsection (10)(d))), 28D, 28E, 28F, 28H, 28I,”. See the explanatory statement for Amendment 130. Amendment 133, in clause 38, page 46, line 21, leave out subsection (16) and insert— “(16) If this section is repealed under section 101(5A) (repeal where asset allocation requirement uncommenced) in respect of the insertion of the provisions mentioned in that subsection, the Secretary of State may by regulations amend this section in consequence of that repeal. (17) Regulations under subsection (16) are subject to the negative procedure.”— (Torsten Bell.) This amendment is related to Amendment 228. It allows for regulations to be made tidying up the various references to the asset allocation requirement in clause 38 in the event that the power to commence that requirement is never exercised. Question put, That the clause, as amended, stand part of the Bill.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  As the hon. Member has asked so kindly, I assure him that I will write to him and to my hon. Friend the Member for Tamworth ahead of Report.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 147, in clause 42, page 55, line 9, leave out “eligible members” and insert “each eligible member”. This amendment clarifies that trustees or managers are required to make a default pension benefit solution available to every eligible member of the scheme.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I will not speak for long. The hon. Member is absolutely right to say that defined-benefit schemes have been material buyers of gilts over a long period. The market is perhaps deeper and more robust than what some of his remarks might imply. There is a range of participants in our gilt markets. However, I take the point that pension schemes are one of them. Contributions such as those from the Office for Budget Responsibility are valuable in that debate, and I reassure him on two fronts. First, I know that he did not mean it quite like this, but the deficit is not growing this year; in fact, it is falling by around 1% of GDP, marking us out from some other countries. Secondly, he is absolutely right to say that the DMO should and does engage with market participants across a wide range of matters. However, on that basis, and on the basis that the Bill does not envisage changes in DB schemes’ asset allocations, I ask him to withdraw the new clause. Amendment 98 agreed to.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I completely recognise that. Let me say a few words about how we have tried to balance those tests. We want to see the industry get to scale, and we want clarity about what the end point is, but we want to provide a pragmatic approach to how we get there. Balancing that is what drove us to the five-year approach, which is different from some of the earlier discussions in the pensions investment review about an earlier, harder deadline of 2030. Within the Bill there is flexibility for regulators where people are just approaching the deadline or in other situations, to avoid difficult situations where people’s authorisation is put into question at short notice. That is important, but so is providing the clarity that they will be required to get to scale. It cannot be a never, never. It needs to be a pathway to a destination; it cannot just be a hope. I think that we have taken a pragmatic, balanced approach, but I appreciate that others will have their views. There will be those in the industry who will worry that they may not be on track to meet those scale requirements, but that is in the nature of the beast of our saying that the industry needs to change. I appreciate that that will mean some change for some organisations. We have tried to be flexible and to take a pragmatic approach. Amendment 108 agreed to. Amendments made: 109, in clause 38, page 43, line 28, at end insert— “, and (b) has a credible plan in place for meeting the scale requirement within the meaning of section 28B(2).” This amendment makes it a condition of approval for transition pathway relief that a group person pension scheme has a credible plan in place for meeting the scale requirement. Amendment 110, in clause 38, page 43, line 33, leave out “authorisation” and insert “approval”. This amendment is to ensure that new section 28D of the Pensions Act 2008 refers correctly to an approval under new section 28A or 28B of that Act. Amendment 111, in clause 38, page 44, line 15, after “20(1A)” insert “or section 26(7C)(c)”.— (Torsten Bell.) This amendment corrects an omission so that new section 28E of the Pensions Act 2008 works effectively for group personal pension schemes.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 134 in clause 39, page 46, line 36, after “2008” insert— “in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,” This amendment, together with Amendment 135, ensures that provisions in or under the Pensions Act 2008 are added to section 204A of the Financial Services and Markets Act 2000 (meaning of “relevant requirement” and “appropriate regulatory”) only so far as they relate to the scale requirement or the asset allocation requirement.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I thank the hon. Lady for that question. There is not a formal requirement on the Secretary of State to carry out a review as we are going. My honest view is that any regulator and Secretary of State will want to actively monitor what happens. I very strongly expect that this will be discussed at great length at every single pension conference around those years, because all the providers will be talking to each other about how they are taking these things forward. The hon. Lady will remember the discussion last Tuesday with some providers, including the National Employment Savings Trust and People’s Pension, about how they are already planning to bring these solutions forward. Although they are new for the industry, most providers had already been thinking about this, because they know that it would be the right thing to do even if there were not a Government requirement to do it, and because I have been clear with them for quite some time that this is the direction of travel in both the trust market and the GPP market. I am not sure that we need a rigid, set date for a review, but I will take away the hon. Lady’s wider question about what reassurance we can offer that people will be actively monitoring what has happened rather than just watching and seeing what happens. I can certainly write to the regulators, for example, to make it clear that that will be our expectation. Amendment 147 agreed to. Amendments made: 148, in clause 42, page 55, line 11, at beginning insert “at least in such circumstances or”. This amendment allows for regulations to provide that particular events (as well as times or intervals) trigger a requirement to review default pension benefit solutions. Amendment 149, in clause 42, page 55, line 13, leave out “relevant” and insert “pension”. This amendment ensures that the definition of “pension benefit solution” is capable of operating in relation to a pension scheme that is not a relevant scheme (such as a collective money purchase scheme). Amendment 150, in clause 42, page 55, line 25, leave out “as a default pension benefit solution,” and insert “of the scheme as the pension benefit solution under which— (i) the eligible members of the scheme generally, or (ii) a subset of those eligible members, will receive pension payments unless they choose to receive pension payments under a different pension benefit solution,”. This amendment clarifies the definition of “default pension benefit solution”. Amendment 151, in clause 42, page 55, line 40, at end insert “; (d) such other factors as may be prescribed.”— (Torsten Bell.) This amendment allows other factors to be added by regulations to the factors that trustees or managers of a relevant scheme have to take account of in determining what default pension benefit solutions the scheme should make available.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  We now move from the contractual override provisions of the Bill to the default pension benefit solutions. This is a material change to our pension landscape, as the defined contribution landscape has matured, as I will come to. Again, I am glad that there has generally been cross-party consensus on the issue. Clause 42 is pivotal in ensuring that members of defined-contribution pension schemes are provided with default options for pension benefit solutions when they want to access their pension assets, thereby reducing the complexity for individuals of securing an income in and through later life. These solutions must be designed to provide a regular income to members during retirement. The clause makes provision for an exemption where that would not be appropriate. We intend to set out in regulations what is meant by “designed to provide a regular income” and by “retirement”. Members will have access to pre-designed benefit solutions that are tailored to meet the needs of the scheme’s membership. The intention is that, normally, individuals need not make a decision about how they would take their pension benefits, except to confirm that they want to start receiving payment. The clause also provides for periodic reviews to be prescribed to ensure that the solutions remain appropriate. Not only will this measure support our commitment to enhancing the pension system robustness and ensuring that members normally benefit from a later-life income with the necessary communications of governance alongside it, but it will potentially provide the trustees with a level of assurance in relation to the investment strategy, enabling decisions about investment in longer-term assets, which will support the opportunity for investment in productive assets, including in the UK. The Opposition spokesperson, the hon. Member for Wyre Forest, raised that point in another context, but in this part of the DC landscape in particular, this provision means that schemes will not need to move all assets into safer assets as people approach retirement, if they are clear about the product that people will be in during their retirement. Government amendments 147 to 155 are minor. They provide clarity on what is a default pension benefit solution, who is an eligible member and what is a relevant scheme, and they provide for the negative parliamentary procedure for subsequent regulations relating to when, and in what circumstances, default pension benefit solutions need to be reviewed.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  We have now reached clause 43—the clause that deals with the situation I mentioned briefly earlier, which is where a scheme thinks that it is in the best interests of its members that the default solution is provided by another scheme or provider, and it sets out how that should take place. Amendments 156 to 160 and 163 and 165 all relate to the operation of providing pension benefit solutions via transfers to another scheme. The intention of the amendments is merely to provide helpful clarifications or to otherwise ensure that the clauses operate in line with the policy intent. Amendment 156 clarifies that trustees or managers may choose to offer to transfer all the scheme’s members to another scheme for the purpose of providing a pension benefit solution, or just a subset of those members—as I said before, there may be a different cohort within each scheme with the right default for them. Amendment 158 clarifies that it will be for trustees or managers of a relevant scheme to determine whether it is reasonably practical for the scheme to provide a default pension benefit solution. Amendment 160 clarifies that trustees or managers of a relevant scheme may offer to transfer members to another scheme if they have determined that the other scheme would provide a better outcome for those members than they would provide within their own scheme—again, the interests of members should come first. Amendments 157 and 159 are consequential amendments. Amendment 163 clarifies that trustees or managers of a relevant scheme must arrange for transfers to take place and not just facilitate them. That ensures that members should be supported through the whole process—we do not want schemes thinking their job is done as soon as they have set out that process, and leaving members to wrestle with it. These are minor but important technical amendments. They do not alter policy. I ask the Committee to support them. Amendment 156 agreed to. Amendments made: 157, in clause 43, page 56, line 30, leave out from “such” to end of line 31 and insert— “members are referred to in this Chapter as ‘transferable members’.” This amendment is consequential on Amendment 156. Amendment 158, in clause 43, page 56, line 32, leave out from “that” to “to design” in line 33 and insert— “the trustees or managers of the principal scheme have determined that it is not reasonably practicable for them”. This amendment makes the first condition in clause 43(2) subject to the determination of the trustees or managers. Amendment 159, in clause 43, page 56, line 33, leave out “that member” and insert “the members concerned”. This amendment is consequential on Amendment 156. Amendment 160, in clause 43, page 56, line 36, leave out from “have” to end of line 38 and insert— “determined that a qualifying pension benefit solution of a qualifying scheme (other than the principal scheme) will provide a better outcome for the members concerned than any default pension benefit solution that the trustees or managers of the principal scheme could design and make available to them.”— (Torsten Bell.) This amendment clarifies the application of the second condition in clause 43(3).

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 140, in clause 41, page 48, line 22, after “2008” insert “or section 3(2), 5(2) or 7(3) of the Pensions (2) Act (Northern Ireland) 2008 (c. 13 (N.I.))” This amendment extends the application of the contractual override measure to Northern Ireland pension schemes.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 214, in clause 50, page 62, line 33, leave out from beginning to end of line 8 on page 63 and insert— “ 137FBD FCA general rules: guided retirement (1) The FCA must make general rules for the purpose of ensuring that default or qualifying pension benefit solutions are made available to members of relevant pension schemes. (2) In determining what provision to include in the rules, the FCA— (a) must have regard to provision made by, and any provision made under, Chapter 5 of Part 2 of the Pension Schemes Act 2025 (guided retirement: schemes regulated by the Pensions Regulator), and (b) must aim to ensure, so far as possible, that the outcomes achieved by the rules in relation to relevant pension schemes correspond to those achieved by that Chapter, and any regulations made under it, in relation to pension schemes to which that Chapter applies. (3) In this section— ‘default or qualifying pension benefit solution’ means a pension benefit solution which— (a) is designed for delivering money purchase benefits under a pension scheme to some or all of the members of the scheme, (b) is designed to provide a regular income for the members concerned in their retirement (whether or not together with other benefits), and (c) meets any other prescribed conditions; ‘FCA-regulated pension scheme’ means a pension scheme whose operation— (a) is a regulated activity, and (b) is carried on in the United Kingdom by an authorised person; ‘money purchase benefits’ has the same meaning as in the Pension Schemes Act 1993 (see section 181 of that Act); ‘pension benefit solution’, in relation to a pension scheme, means a contractual or other arrangement for making pension payments in respect of members’ accrued rights; ‘pension scheme’ has the meaning given in section 1(5) of the Pension Schemes Act 1993; ‘relevant pension scheme’ means an FCA-regulated pension scheme that is— (a) an auto-enrolment scheme, (b) a workplace personal pension scheme that is not an auto-enrolment scheme, or (c) a pension scheme of a prescribed description, and for that purpose ‘auto-enrolment scheme’ has the meaning given in section 117A(3) and ‘workplace personal pension scheme’ has the meaning given in section 117A(5).” This amendment adjusts the requirement for the FCA to make rules corresponding to Chapter 5 of Part 2. It ensures that the FCA has the flexibility to make provision that is different from that contained in Chapter 5 of Part 2 provided that the FCA’s rules aim to achieve corresponding outcomes to that Chapter.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 127, in clause 38, page 45, line 31, at end insert— “28G Risk notices (1) The Regulatory Authority (‘the Authority’) may give a risk notice to the trustees or managers of a relevant Master Trust if the Authority considers that— (a) there is an issue of concern in relation to the relevant Master Trust, and (b) the relevant Master Trust will, or is likely to, cease to meet the conditions for approval under section 28A or 28C if the issue is not resolved. (2) A ‘risk notice’ is a notice that requires the trustees or managers of a relevant Master Trust to submit to the Authority a plan (a ‘resolution plan’) setting out proposals for resolving the issue of concern. (3) A risk notice must— (a) identify the issue of concern; (b) specify the date by which the resolution plan is to be submitted. (4) If the Authority is not satisfied that the proposals in a resolution plan are likely to be adequate to resolve the issue of concern, the Authority may give a further notice to the trustees or managers requiring them to submit a revised plan by a date specified in the notice. (5) The trustees or managers must implement the proposals in a resolution plan if the Authority— (a) is satisfied that the proposals are likely to be adequate to resolve the issue of concern, and (b) notifies the trustees or managers accordingly. (6) The Authority may direct the trustees or managers to comply with the requirement imposed by subsection (5). (7) Where the trustees or managers are required by subsection (5) to implement the proposals in a resolution plan, they must— (a) submit to the Authority, before the end of a period specified in regulations, a report setting out what progress they are making in implementing the proposals (a ‘progress report’); (b) submit further progress reports to the Authority at intervals specified by the Authority. (8) Resolution plans and progress reports must be provided in the manner and form specified by the Authority. (9) A reference to a resolution plan in subsections (4) to (8) includes a reference to a resolution plan as revised under subsection (4). (10) Regulations may— (a) specify information that a risk notice must contain; (b) provide that the date referred to in subsection (3)(b) or (4) must fall before the end of a period specified in the regulations. (11) Section 10 of the Pensions Act 1995 (civil penalties) applies to a trustee or manager of a relevant Master Trust who fails to comply with— (a) a notice under subsection (1) or (4), (b) a direction under subsection (6), or (c) a requirement imposed by subsection (7).” This amendment allows the Regulatory Authority to issue risk notices to the trustees or managers of a relevant Master Trust or the provider of a group personal pension scheme if there were an issue in relation to the scheme relating to the quality requirement.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  We now come to the contractual override part of the Bill. This group of amendments expands the scope of clause 41 to apply to Northern Ireland pension schemes. Just like in Great Britain, many pension scheme members in Northern Ireland will be in arrangements delivering poor value and outcomes. However, due to a lack of engagement from members, there is often little providers can do to address that. Extending these changes to Northern Ireland will help to solve that. These amendments will create better outcomes for pension scheme members in Northern Ireland, and I therefore ask the Committee to support these amendments. Amendments 143 and 144 add another layer of consumer protection to the already rigorous consumer protections we have included in the Bill. Currently a provider is required to receive certification from an independent person with sufficient expertise that the best interest test has been met. To clarify, that test requires the provider that wishes to use the contract override to carry out an assessment that it is in the interests of scheme members that the override take place. That test then has to be certified by an independent person. This is about strengthening that independent person test. The amendments require the Treasury to make regulations defining “independence” by specifying requirements which must be met by an independent person before they can be appointed, and ensure that the independent person has no conflict of interest. The FCA is then required to include the provisions made by these regulations in its rules. The amendments make an important change to the Bill by ensuring there will be clear rules on who can undertake this important role, and I therefore commend them to the Committee. Clause 41 inserts proposed new part 7A, on what we call the contractual override mechanism—referred to as a unilateral change—into the Financial Services and Markets Act 2000. This will enable providers of FCA-regulated, defined-contribution workplace pension schemes —note we are talking about FCA-regulated, defined-contribution workplace schemes only—to override the terms of a pension scheme without the consent of members and either transfer members to a different pension scheme, make a change that would otherwise require consent, or vary the terms of members’ contracts, but only when certain clear conditions, including most importantly the best interest test, are met. This will establish broad equivalence with the trust based market, where these changes are already available, so trustees already have these powers within the trust-based market. It will also create better outcomes for consumers, deliver on a long-awaited industry ask, and help drive scale and consolidation within the sector, achieving the consolidation we talked about in relation to the previous clause. It is an important enabler of those changes. The clause also amends sections 105, 168 and 429 of FSMA to ensure that the contractual override mechanism can work as intended, and to ensure that the appropriate parliamentary procedures apply to regulations that are made under this part, and that amend or repeal primary legislation. I commend the clause to the Committee. Amendment 140 agreed to. Amendments made: 141, in clause 41, page 48, line 24, leave out from “member”” to end of line 25 and insert “means an active member within the meaning of Part 1 of the Pensions Act 2008 (see section 99 of that Act) or Part 1 of the Pensions (2) Act (Northern Ireland) 2008 (c. 13 (N.I.)) (see section 78 of that Act).” This amendment is consequential on Amendment 140. Amendment 142, in clause 41, page 48, line 33, leave out from “arrangements”” to end of line 34 and insert “means direct payment arrangements within the meaning of section 111A of the Pension Schemes Act 1993 or section 107A of the Pension Schemes (Northern Ireland) Act 1993.”— (Torsten Bell.) This amendment is consequential on Amendment 140.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 161, in clause 43, page 57, line 1, leave out “and willing” and insert “to and agrees”. This amendment is consequential on Amendment 174.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  Noted. Amendment 117 agreed to. Amendments made: 118, in clause 38, page 45, line 9, at end insert— “(1A) The Secretary of State must make regulations under subsection (1) so that they have effect whenever regulations under section 28C(1) or (2) have effect.” See the explanatory statement for Amendment 117. Amendment 119, in clause 38, page 45, line 14, leave out “the scheme or”. This amendment means the asset allocation requirement can only be suspended where it would cause material financial detriment to the members of a scheme. Amendment 120, in clause 38, page 45, line 15, leave out from “the scheme” to end of line 17. This amendment simplifies the description of what may be done by regulations under new section 28F(1). Amendment 121, in clause 38, page 45, line 17, at end insert— “(aa) may make provision about the basis on which the Authority may or must form such a view, including about the evidence which the Authority may or must take into account;”. This amendment clarifies that the regulations can circumscribe the basis on which the FCA or TPR can reach a view on the material financial detriment test in subsection (2)(a). Amendment 122, in clause 38, page 45, line 23, at end insert— “(c) must provide for the Authority’s determination on an application to be referred to the Upper Tribunal.” This amendment ensures that decisions on an application for the suspension of the asset allocation requirement will be referable to the Upper Tribunal. Amendment 123, in clause 38, page 45, leave out lines 24 to 26. This amendment is consequential on Amendment 121. Amendment 124, in clause 38, page 45, line 28, after “as” insert “material”. This ensures that regulations under subsection (4) can also make provision about what kind of detriment is classed as “material”. Amendment 125, in clause 38, page 45, line 30, leave out subsection (5).— (Torsten Bell.) This amendment is consequential on Amendment 129.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  The direct answer is that, yes, the amendment comes from discussions with regulators, to make sure that the flow of information is sufficient to live up to Parliament’s intent and that meaningful reports on the saver and growth impacts can be provided. Amendment 107 agreed to .

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  Clause 47 allows for a compliance framework to be developed to ensure that trustees or managers of pension schemes comply with the requirements of chapter 5 of the Bill and take their responsibilities seriously; hon. Members will by now be used to seeing parts of this at the back of sections of pension legislation. It is worth noting up front that amendment 211 replaces the penalty provisions in clause 47 with a new mechanism for introducing enforcement powers via regulations. The regulations could allow for the Pensions Regulator to issue compliance notices, third-party compliance notices and penalty notices. These types of enforcement notice are not unusual, and they appear in other pensions legislation, such as the pensions dashboard regulations and the regulations on climate change governance and reporting. Penalties will be limited to no more than £10,000 in the case of individuals and up to £100,000 in other cases, such as corporate trustees. We have introduced these changes to ensure consistency with other clauses in the Bill, including the provisions related to value for money and small pots consolidation; we discussed the size of those penalties recently. Clause 47 will enable the regulator to remove and replace trustees in the event of non-compliance. Amendment 209 will remove a penalty provision in clause 46 that is made redundant by amendment 211. Clause 48 makes it clear that the measures in this chapter apply to pension schemes run on behalf of the Crown, another standard provision. Clause 49 provides the definitions for terms used in chapter 5 of the Bill, including many of the important ones I have run through today. Amendments 212 and 213 add the definitions of “pension benefit solution” and “qualifying pension benefit solution” to the list of defined terms in clause 49. They do not change the definition of these terms elsewhere in the clauses. Amendment 209 agreed to. Clause 46, as amended, ordered to stand part of the Bill. Clause 47 Enforcement and compliance Amendment made: 211, in clause 47, page 61, line 4, leave out subsections (1) to (5) and insert— “(1) Regulations may make provision with a view to ensuring the compliance of any person with any provision of or under this Chapter. (2) The regulations may in particular— (a) provide for the Pensions Regulator to issue a notice (a ‘compliance notice’) to a person with a view to ensuring the person's compliance with a provision of or under this Chapter; (b) provide for the Pensions Regulator to issue a notice (a ‘third party compliance notice’) to a person with a view to ensuring another person's compliance with a provision of or under this Chapter; (c) provide for the Pensions Regulator to issue a notice (a ‘penalty notice’) imposing a penalty on a person where the person— (i) has failed to comply with a compliance notice or third party compliance notice, or (ii) has contravened a provision of or under this Chapter; (d) provide for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty; (e) confer other functions on the Regulator. (3) The regulations may make provision for determining the amount, or the maximum amount, of a penalty in respect of a failure or contravention. (4) But the amount of a penalty imposed under the regulations in respect of a failure or contravention must not exceed— (a) £10,000, in the case of an individual, and (b) £100,000, in any other case. (5) Any penalty payable under the regulations is recoverable by the Regulator. (5A) In England and Wales, any such penalty is, if the county court so orders, recoverable under section 85 of the County Courts Act 1984 or otherwise as if it were payable under an order of that court. (5B) In Scotland, a penalty notice is enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom. (5C) The Regulator must pay into the Consolidated Fund any penalty recovered under this section.”— (Torsten Bell.) This amendment replaces the provisions in subsections (1) to (5) of clause 47 about fixed penalty notices with a power to make regulations providing for compliance notices, third party compliance notices and penalty notices. Clause 47, as amended, ordered to stand part of the Bill. Clause 48 ordered to stand part of the Bill. Clause 49 Interpretation and general Amendments made: 212, in clause 49, page 62, line 13, at end insert— “‘pension benefit solution’ has the meaning given by section 42(2);”. This amendment adds “pension benefit solution” to the list of defined terms in clause 49. Amendment 213, in clause 49, page 62, line 19, at end insert— “‘qualifying pension benefit solution’ has the meaning given by section 43(6);”.— (Torsten Bell.) This amendment adds “qualifying pension benefit solution” to the list of defined terms in clause 49. Clause 49, as amended, ordered to stand part of the Bill. Clause 50 Corresponding provision in relation to FCA-regulated schemes

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  Before I come to the detail of the amendment, I should re-emphasise the point made by my hon. Friend the Member for Tamworth about the volume of amendments to clause 38 in particular, which is why I asked for the amended clause with track changes to be circulated to the whole Committee. I hope that Members have found that useful. Turning to the amendment, I have a lot of sympathy for what my hon. Friend is trying to achieve. It is important that we monitor progress on the Mansion House commitments and continue to stay focused on the strength of the pipeline. There are parts of the Bill that would already facilitate that, including data collection that is consistent with monitoring the Mansion House progress, and the strength of the pipeline, which was obviously relevant to consideration of the saver’s interest test, and thus left in the Bill. I suggest that, given our sympathy with the idea of this amendment but its interactions with several other existing parts of the Bill, we commit to reviewing it with a view to deciding whether we should come back with something similar on Report, if the hon. Lady is content with that.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  I beg to move amendment 117, in clause 38, page 45, line 4, leave out “may” and insert “must”. This amendment, together with Amendment 118, means that regulations about suspending the requirement for approval under section 28C have to have effect at any time when section 28C has effect as a result of regulations under that section.

• 9 Sept 2025 · Pension Schemes Bill (Sixth sitting) · Hansard source

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  These amendments relate to compliance and enforcement. Government amendment 127 allows the Pensions Regulator to issue risk notices to the trustees or managers of a relevant master trust or the provider of a group personal pension scheme if there were an issue in relation to the scheme relating to the quality requirement. This will require the relevant master trust to develop a resolution plan to address the regulator’s concerns. The regulator may then direct the relevant master trust to implement the measures in that plan. Amendment 128 allows regulations to make provision for the imposition of penalties where a relevant master trust or GPP scheme accepts contributions from an employer when it should not. It will allow the regulator to issue penalties of up to £100,000 in relation to each employer from which contributions continue to be accepted. It will also give the provider the right of appeal against the penalty. Amendment 126 enables the FCA to monitor and enforce compliance of any FCA-regulated person in scope of chapter 3 of part 2 of the Bill. It also provides that the Treasury may make regulations to enable the FCA to take action for monitoring and enforcing compliance of any FCA-regulated person with any provision under chapter 3. I commend the amendments to the Committee.