Torsten Bell MP: speeches 2025

Speeches

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

  More

  We now move to the substance of clause 43 and the proposed amendments. Clause 43 allows schemes to partner with another for the purpose of delivering a suitable pension solution to their membership—or cohorts of their membership. It allows those transfers to qualifying pension benefit solutions when either providing an in-house solution is not reasonably practicable, or a solution offered by another scheme is deemed to provide a better outcome for members. It requires trustees or managers of the principal scheme to identify qualifying schemes that provide solutions that meet the requirements of their membership. That could, for example, include transferring members to a collective defined-contribution scheme. Power is also taken to limit or prohibit the charging of transfer fees. This clause is vital overall, as it provides the flexibility that I have discussed in the course of debate on the previous group of amendments and allows trustees to deliver the best outcomes for their members. Amendment 154 removes a drafting error and clarifies that all occupational pension schemes that provide defined-contribution benefits are included in the definition of relevant scheme, not just those established under a trust. Whether a pension scheme member is receiving a default solution in-house or being transferred to another scheme to receive a qualifying solution, as I said earlier, the policy intent is that they have a similar experience. Amendments 166 to 169 and 173 ensure that there is a parity of requirements on schemes in those cases. Amendments 170 and 171 are consequential amendments, while amendment 172 corrects a minor inconsistency in language. I commend them and the clause to the Committee. Amendment 167 agreed to. Amendments made: 166, in clause 43, page 57, line 10, after “solution”” insert “, in relation to a qualifying scheme,”. This amendment is consequential on Amendment 167. Amendment 168, in clause 43, page 57, line 12, leave out “receiving”. This amendment is consequential on Amendment 167. Amendment 169, in clause 43, page 57, line 15, leave out “eligible members of the receiving” and insert “members of the”. This amendment is consequential on Amendment 167, and also reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases. Amendment 170, in clause 43, page 57, line 16, leave out “eligible”. This amendment reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases. Amendment 171, in clause 43, page 57, line 17, leave out “eligible”. This amendment reflects the fact that a qualifying scheme need not necessarily be a relevant scheme, so the reference to “eligible members” (which is defined by reference to “relevant schemes”) is not right in all cases. Amendment 172, in clause 43, page 57, line 21, leave out “But”. This amendment makes a minor verbal change in light of other amendments to clause 43. Amendment 173, in clause 43, page 57, line 23, leave out “subsection (5)” and insert “this section”. This amendment reflects the fact that, as a result of other amendments, “qualifying scheme” is used more widely in the section. Amendment 175, in clause 43, page 57, line 35, at end insert— “(9A) Regulations may make provision about the conditions in subsections (2) and (3), including about the basis on which the determinations mentioned in those subsections are to be made.” This amendment allows for regulations to make provision elaborating on the conditions in subsections (2) and (3). Amendment 174, in clause 43, page 57, line 35, at end insert— “(9B) Regulations may require a pension scheme of a prescribed description to agree to receive a transfer in respect of the accrued rights of a transferable member where— (a) the principal scheme has been unable, having used reasonable endeavours, to identify a qualifying scheme that is able and willing to do so, and (b) any other prescribed conditions are met. (9C) A requirement under subsection (9B) may only be imposed on a pension scheme that is one or both of the following— (a) a Master Trust scheme within the meaning of the Pension Schemes Act 2017; (b) a consolidator scheme within the meaning of Chapter 2 of Part 2 (consolidation of small dormant pension pots).” This amendment allows for regulations to require certain schemes to act as schemes of last resort in cases where the principal scheme cannot find a qualifying scheme that is willing to receive a transfer. Amendment 176, in clause 43, page 57, line 40, at beginning insert “Regulations under subsection (5C), (10) or (11) are subject to the negative procedure; and other”.—( Torsten Bell.) This amendment applies negative parliamentary procedure to regulations under subsection (5C), (10) or (11). Clause 43, as amended, ordered to stand part of the Bill. Clause 44 Provision and gathering of information

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

  More

  These amendments clarify aspects of the approval criteria for prospective new entrants into the multi-employer DC market after the scale requirements come into force. Amendment 112 requires that a new prospective provider must have no current members—it must actually be new to the market. We want to ensure that the route is used only by those for whom it is intended, rather than as a loophole around the main intent of the Bill. Amendment 113 requires that new entrants have strong potential to grow in order to meet the scale requirements under section 28A, and that the prospective scheme in question has an innovative product design. I think we will come to the question of product shortly, but to skip ahead, the regulations would allow us to talk about innovation in the nature of the service, not just in the product. That is a question for us to take away in the design of those regulations. That is not in the Bill itself, but it is an important clarification. The remaining amendments in this group are consequential on amendment 113. They will offer greater clarity to potential applicants to this pathway, and I commend them to the Committee. I thank the hon. Member for Torbay for tabling new clause 3 and acknowledge his wish that the pathway for new entrants into the DC multi-employer market be as supportive as possible for new providers. We of course agree with that sentiment. We want to see fewer, bigger schemes, but not a lack of competition in the longer run, even though we are a long way from that. From an innovation viewpoint, the new clause is not necessary to achieve that aim. Competition will come from the possibility of innovation, but must also flow into the building of scale, which is the overall intent of the legislation. Given that the spirit of the new clause is achieved by the new entrants pathway, I ask the hon. Gentleman not to press it to a vote.

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

  More

  I thank the hon. Lady for rightly raising the important question of communication to members. I draw the Committee’s attention to clause 44, which explicitly aims, in quite some detail, to engage with that question. It contains requirements on providers—again, with the detail to come in regulations—about how they set out their general policy, but also how they communicate to particular individuals as they head towards retirement and, potentially, enrolment in a default solution. It is absolutely right to say that this measure is new for providers, for regulators and for the industry in the UK, and we should always have that in mind. We should take some comfort from the success of automatic enrolment in doing something new. Other countries had moved to auto-enrolment solutions ahead of us, and the same is true here to a degree. In Australia, there is a similar pattern: it has got further ahead in terms of the average size of pots, has seen some of the negative outcomes that we can potentially see in the data in the UK, and has then moved to a version of this and is working that through. We will be able to learn from its experience, as well as just working this through ourselves. The hon. Lady asked how the measure will be taken forward. We aim to launch a public consultation in the spring and summer next year. These requirements would come in earlier than some of the wider changes that the Committee has discussed—on small pots, for example, which will come far later, and on value for money. We think it is urgent that we get on with this, because we are approaching a situation in which DC pots will be significant for some members, but I completely appreciate her point that it is a large change for the industry. Clause 44 requires some direct communications with members. I reassure the hon. Lady that there is nothing in the GDPR or other data protection requirements that would prevent providers from communicating in that way. They will not require consent from members to do it, which is important, because otherwise it would not be effective. There are wider questions about direct marketing—communications that are not about setting out the actual situation—in this space, and I am considering those. They are tied up with questions about targeted support and the rest, but it is important for us to continue thinking about this in the pensions space, where there is a history of downsides to direct marketing. We want to make sure that this is not that, but provision of information about the working of a scheme of which someone is a member.

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

  More

  I beg to move amendment 196, in clause 45, page 59, line 27, leave out “offer” and insert “provide or make available”. This amendment allows for regulations either to require information to be provided directly to members or to require it to be made available to them.

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

  More

  I will come back on the question about the word “product” and definitions. I reassure the Committee that I will go away and make sure that is clear if it is not clear enough already. The core Liberal Democrat question is, are we baking innovation in? It is a good question for us all to be asking. I think the answer is yes. To broaden the conversation out slightly, we want to see innovation from existing providers as well. We anticipate that there will still be 15 or so large providers in the 2030s. That is still a highly competitive market. Not just looking at costs but also at customer service and all the rest in the value for money regime should be a spur to that innovation. That is a key part of the set of clauses we were discussing last week. I should explicitly note that the scale tests do not cover the most obvious innovation that is likely to come in the market in the coming years, which is CDC schemes. By their nature, if they are to be successful, they will get to scale anyway, but to make their path easier and to be clear that we do see a role for CDC innovation moving forward, those are not part of these requirements. The innovation pathway exists for exactly this reason, as we have discussed. Several Members have raised a question about consultation. I confirm that there is a requirement for a public consultation, which should certainly learn lessons that go beyond the experience of the pensions industry to the wider financial services sector—lessons of competition entry. We talked about that in the banking sector earlier, but the same thing would apply, for example, to other parts of the insurance sector and others. We will take that away. We are very conscious at the moment, in our wider approach to regulation, of providing earlier authorisation, where that can be done. I suspect we may come back to that in the superfunds discussion later this week. Amendment 112 agreed to. Amendments made: 113, in clause 38, page 44, leave out lines 21 and 22 and insert— “(a) the scheme in question has strong potential to grow so as to meet the scale requirement under section 28A, (aa) the scheme in question has an innovative product design, and”. This amendment ensures that the eligibility conditions for new entrant pathway relief are more precisely articulated. Amendment 114, in clause 38, page 44, line 34, leave out from “of” to “(including” in line 35 and insert “ “strong potential to grow” and “innovative product design” ”. This amendment is consequential on Amendment 113. Amendment 115, in clause 38, page 44, line 36, leave out from “has” to end of line 37 and insert “strong potential to grow or an innovative product design”. This amendment is consequential on Amendment 113. Amendment 116, in clause 38, page 45, leave out lines 1 and 2.— (Torsten Bell.) This amendment is consequential on Amendment 129.

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

  More

  As amended, the clause introduces consequential amendments relating to clause 38 to ensure that the changes needed for the asset allocation and scale measures appropriately wire into existing legislation. The clause does this by making amendments to the Financial Services and Markets Act 2000 and the Pension Schemes Act 2017. The clause makes an insertion into section 1A and an amendment to section 204A of the 2000 Act. It ensures that the FCA’s statutory functions are extended, which would include its new enforcement functions for clause 38 in relation to scale and asset allocation. The second part of the clause adds new authorisation criteria for master trusts into the 2017 Act. These new criteria will require trustees of a master trust to satisfy the Pensions Regulator that they have a sufficient investment capability and continue to have a main scale default arrangement. Introducing these criteria will enable implementation of the Government’s policy objective, set out in the final report of the pension investment review, to ensure schemes utilise the benefits of scale to deliver better investment outcomes. The clause sets out factors that the Pensions Regulator will be required to consider in deciding that the master trust authorisation criteria are met and enables further detail to be set out in regulations. The effect of these additions to the authorisation regime are essential as they help to drive capability within master trusts. I commend clause 39 to the Committee. Government amendments 134 and 135 ensure that the necessary extension of the FCA’s authorisation functions under FSMA encompass only its new role in overseeing the scale and asset allocation requirements and does not extend to other non-relevant requirements in the Pensions Act 2008. It has a constraining effect. Government amendment 136 makes it clear that the addition to section 5 in part 1 of the Pension Schemes Act 2017 regarding decisions on application is about the scheme meeting the scale requirements under condition 1 of section 20(1)(a) of the Pensions Act 2008. Government amendment 137 gives the Secretary of State the ability to set out the meaning of terms in specific areas. I urge Members to support Government amendments 134 to 137. Clause 40 deals with the application of scale and asset allocation measures to Crown schemes. The substantive provisions in chapter 3 take the form of amendments to the Pensions Act 2008, the Pension Schemes Act 2017 and the Financial Services and Markets Act 2000. These Acts already deal with application to the Crown in their own way, and it is not the intent of the Government to disrupt or confuse these settled positions. Accordingly, after consideration, we seek to delete this clause. To be clear, I do not commend the clause to the Committee. Amendment 134 agreed to. Amendments made: 135, in clause 39, page 46, line 38, after “2008” insert “in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,” See the explanatory statement for Amendment 134. Amendment 136, in clause 39, page 47, line 10, leave out “quality” and insert “scale” This amendment changes a parenthetical description so that it is clearer. Amendment 137, in clause 39, page 47, line 27, leave out from “(2)” to end of line 32 and insert— “(4) The Secretary of State may by regulations— (a) make provision about the meaning of terms used in subsection (2); (b) specify further factors that the Pensions Regulator must take into account in deciding whether it is satisfied about the matters mentioned in subsection (1). (5) The first regulations that are made under this section are subject to affirmative resolution procedure. (6) Any other regulations under this section are subject to negative resolution procedure.” — (Torsten Bell.) This amendment expands the power currently in the new section 12A(3) of the Pension Schemes Act 2017, created by clause 39(11) of the Bill, so as to allow the Secretary of State to make provision about the meaning of terms in new section 12A(2) of the Pension Schemes Act 2017.

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

  More

  I beg to move amendment 203, in clause 46, page 60, line 8, leave out “default”. This amendment ensures that clause 46 operates in respect of qualifying pension benefit solutions as well as default pension benefit solutions.

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

  More

  We now turn to clause 50, the last clause in this part of the Bill. The overriding objective of this clause, together with amendment 214, is to make corresponding provision in relation to FCA-regulated schemes. Clause 50 inserts into the Financial Services and Markets Act 2000 new section 137FBD, which will deliver default pension benefit solutions to FCA-regulated pension schemes, ensuring that members on both sides of the market benefit from default solutions. Amendment 214 is a technical amendment that refines the requirement on the FCA to deliver those solutions for members of FCA-regulated pension schemes and ensures consistency between FCA and TPR-regulated schemes—a key objective of the Government. It clarifies that the FCA must make rules to ensure that default pension scheme solutions are made available to members of FCA-regulated schemes and, in making those rules, must have regard to provisions made by the rest of chapter 5 of part 2, which we have been discussing and which sets the framework for the TPR to provide those solutions. The FCA must also aim to ensure, as far as possible, that the outcomes achieved by its rules correspond to those achieved under chapter 5, and any regulations made under it regarding TPR-regulated pension schemes. The amendment therefore seeks to ensure that, from a member’s perspective, default pension benefit solutions are provided consistently across the market, whether they are a member of a TPR or an FCA-regulated pension scheme, while giving the FCA the flexibility to deliver that outcome in a way that suits its methods of regulating pension schemes. DWP, the FCA and The Pensions Regulator will work together to develop and deliver default pension benefit solutions, further boosting fairness and consistency across the market. Amendment 214 agreed to. Clause 50, as amended, ordered to stand part of the Bill. Ordered, That further consideration be now adjourned. —(Taiwo Owatemi.)

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

  More

  I beg to move amendment 156, in clause 43, page 56, line 29, leave out— “a member of the scheme” and insert— “eligible members of the scheme (whether comprising the members of the scheme generally or a subset of those members)”. This amendment clarifies how the exclusion in clause 43(1) operates.

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

  More

  This is a group of minor amendments, mostly aiming at improving the clarity of proposed new section 28F, for example by removing duplication. I draw Members’ attention to the most significant amendments, which are amendments 117 and 118. They make clear that the Government must introduce the savers’ interest exemption mechanism if they are to introduce asset allocation requirements. That is a “must” rather than a “may” because the Government’s intention is that there must always be a savers’ interest exemption.

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

  More

  This clause is the one most relevant to the Liberal Democrat amendment 279 that we discussed earlier, because it requires trustees or managers of relevant pension schemes to formulate, review and, where appropriate, revise their pension benefits strategy. This is where they will need to show that they have considered the range of options set out in that Lib Dem amendment. The production and review of such a strategy will hold occupational pension schemes to account for how they have identified the requirements of their membership and how they have used that information to design the default pension benefit solution, or solutions, that they have put in place, or to identify an appropriate qualifying pension benefit solution elsewhere. Additionally, schemes will need to set out in their strategy their plans for how they will communicate effectively with their members—another issue that has been at the centre of our discussions today. There is also a requirement for the scheme to review their strategy, and Government have taken a power to specify minimum intervals for review. Regulations may also set out further requirements for evidence of how the scheme has complied with any of the requirements set out in this chapter. The strategy must be published and made available to both the regulator and members of the scheme, which will enable effective monitoring, analysis and evaluation at an aggregate level. Government amendments 203 and 204 will ensure that clause 46 operates in respect of qualifying pension benefit solutions as well as default pension benefit solutions. Amendment 205 adds effective communication to the list of things that must be addressed in the strategy. Amendments 206 and 207 correct an error in the Bill as drafted. Amendment 208 allows regulations to require that the information about compliance with provisions of the chapter be published alongside a benefit strategy. Amendment 210 removes a provision made redundant by other amendments. Amendment 203 agreed to. Amendments made: 204, in clause 46, page 60, line 9, leave out from beginning to “pension” in line 10 and insert “design, or in the case of transferable members identify,”. This amendment ensures that clause 46 operates in respect of qualifying pension benefit solutions as well as default pension benefit solutions. Amendment 205, in clause 46, page 60, line 12, leave out paragraph (c) and insert— “(c) communicate effectively with eligible members of the scheme with regard to pension benefit solutions and comply with any regulations under section 45.” This amendment adds effective communication to the list of things that a pension benefits strategy must address. Amendment 206, in clause 46, page 60, line 25, leave out “and” and insert “or”. This amendment corrects an error. Amendment 207, in clause 46, page 60, line 26, leave out “be authorised to”. This amendment corrects an error. Amendment 208, in clause 46, page 60, line 35, at end insert— “(3A) Regulations may require the trustees or managers of a relevant scheme to publish, alongside a pension benefits strategy (or revised pension benefits strategy), prescribed information or evidence as to whether and how they have complied with the requirements imposed by virtue of this Chapter.” —(Torsten Bell.) This amendment allows regulations to require that information about compliance be published alongside a pension benefits strategy.

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

  More

  I beg to move amendment 177, in clause 44, page 58, leave out line 2 and insert “Where only one pension benefit solution is available to the members of a relevant scheme,”. This amendment ensures that clause 44 operates in relation to qualifying pension benefit solutions as well as default pension benefit solutions.

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

  More

  It is wonderful to have you in the Chair, Ms Butler. Amendments 92 to 96 are minor amendments that clarify that any asset allocation percentage requirements should be calculated as a percentage of default funds, rather than as a percentage of the total assets of a scheme. That is how the Mansion House accord works and how these powers are intended to operate. Amendment 133 simply ensures that the Government can remove redundant provisions from primary legislation should the sunset provisions—which as a result of Government amendment 228 will now appear in clause 101—cause the power we have been discussing to expire. I commend the amendments to the Committee. Amendment 92 agreed to. Amendments made: 93, in clause 38, page 41, line 9, after “in” insert “default”. This amendment confines the application of the asset allocation requirement to default funds of a relevant Master Trust or a group personal pension scheme. Amendment 94, in clause 38, page 41, leave out lines 10 to 14 and insert— “(2) Regulations under subsection (1) may prescribe a percentage by reference to— (a) all of the assets of the scheme that are held in default funds, or (b) a prescribed description of the assets of the scheme that are so held.”. This amendment clarifies that a percentage may be prescribed under section 28C(1) in respect of either all the default funds of a scheme or a particular subset of those default funds. Amendment 95, in clause 38, page 41, line 15, leave out “or (2)”. This amendment is consequential on Amendment 94. Amendment 96, in clause 38, page 41, line 18, leave out from “description” to end of line 19.— (Torsten Bell.) This amendment is consequential on Amendment 93. Amendment proposed : 275, in clause 38, page 41, line 31, at end insert— “(5A) A description of asset prescribed under subsection (4) may not be securities in any UK water company.”— (Mark Garnier.) This amendment would ensure that the prescribed percentage of asset allocation would not include assets in the water sector and fund trustees will not be compelled to allocate scheme assets to the water sector. Question put, That the amendment be made.

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

  More

  I beg to move amendment 107, in clause 38, page 43, line 9, at end insert— “28CA Information (1) Regulations may make provision about information that the trustees or managers of a relevant Master Trust or the provider of a group personal pension scheme must give to the Regulatory Authority about the allocation of assets of the relevant Master Trust or group personal pension scheme. (2) The regulations may make provision about— (a) the types of information that must be given; (b) when it must be given; (c) the form and manner in which it must be given.” This new section would allow regulations to require the provision of information about asset allocation to the Secretary of State and the Regulatory Authority. The amendment is supplementary to a provision in the introduced Bill, proposed new section 28C(10)(d), which permits the Government to make regulations about the provision to regulators of information relating to the allocation of assets by the relevant pension providers. The amendment ensures that, in the event that the regulator does not possess crucial information that the Government require in order to design the possible asset allocation framework, or to write the report on saver and growth impacts that they will be legally required to produce, the Government can obtain that information via the regulators.

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

  More

  I beg to move amendment 98, in clause 38, page 42, line 12, leave out “relevant Master Trusts or” and insert— “the trustees or managers of relevant Master Trusts or the providers of”. This amendment clarifies that legal obligations fall on the trustees or managers of relevant Master Trusts or on the providers of group personal pension schemes (rather than on the schemes themselves).

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

  More

  I beg to move amendment 167, in clause 43, page 57, line 10, leave out “In subsection (5)(a)(ii)” and insert “In this Chapter,”. This amendment reflects the fact that “qualifying pension benefit solution” is, as a result of other amendments, now used more widely in the Chapter.

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

  More

  I beg to move amendment 108, in clause 38, page 43, line 19, at end insert “, and (b) has a credible plan in place for meeting the scale requirement within the meaning of section 28A(2)”. This amendment makes it a condition of approval for transition pathway relief that a Master Trust has a credible plan in place for meeting the scale requirement.

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

  More

  I beg to move amendment 138, in clause 39, page 47, line 32, at end insert— “ 12B Scale requirement (1) The Secretary of State may by regulations make provision about how the Pensions Regulator is to decide whether it is satisfied that a Master Trust scheme that has its main administration in the United Kingdom meets Condition 1 in section 20(1A) (scale requirement) of the Pensions Act 2008. (2) The regulations may, among other things, specify matters which the Pensions Regulator must take into account in making its assessment. (3) The first regulations under this section are subject to affirmative resolution procedure. (4) Any subsequent regulations under this section are subject to negative resolution procedure.” This amendment inserts in the Pension Schemes Act 2017 a power to make regulations about how the Pensions Regulator is to decide whether a Master Trust meets the scale requirement. It is with some relief that I reassure Members this is the last amendment to this section of the Bill. Government amendment 138 amends one of the new authorisation criteria for master trusts that the Bill inserts into the Pension Schemes Act 2017, which provides that a master trust scheme must meet the scale requirement. It grants the Government the power to make regulations about how the pensions regulator should satisfy itself that a master trust scheme has met the scale requirements. I commend the amendment to the Committee. Amendment 138 agreed to. Clause 39, as amended, ordered to stand part of the Bill. Clause 40 disagreed to. Clause 41 FCA-regulated pension schemes: contractual override

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

  More

  I apologise for my slip of the tongue at the start of my speech. This group of amendments deals with transition pathway relief. Here, in many cases we are talking about existing schemes that may not meet the £25 billion threshold, but which have a plausible path to that scale requirement over the following five years—I think that is a point of consensus across the Committee. That is what we are engaging with here. It is a reasonable approach to avoid a cliff edge, for exactly the reason that the shadow Minister set out.

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

  More

  This group of amendments deals with the transition pathway relief, which we touched on earlier in the context of support for innovation within the pension landscape. First, amendments 108 and 109 amend proposed new section 28D so that, to be approved on the transition pathway, a master trust or group personal pension scheme respectively must produce a credible plan for meeting the scale requirements, before the end of the pathway. I should clarify what I said earlier, sorry—this is the transition pathway; we are not talking about the new entrant pathway. In addition, via amendment 131, we are inserting new subsection (15A) into clause 38, to ensure that the pathway will expire five years after the scale requirements come into force. We accept that in certain circumstances schemes may need more time to reach scale, but we want the end destination—going back to our conversation about scale and certainty that scale will be achieved—to be clear. I commend these minor amendments to the Committee.

• 9 Sept 2025 · Topical Questions · Hansard source

  More

  Over 90% of Scotch is exported and is therefore not affected by the measures that the hon. Member has just mentioned, but it will be affected by being the biggest beneficiary of the trade deal with India, which is set to reduce tariffs from 150% to 75% initially, and then to 40% over time. This is what a Government getting on with backing the Scotch industry looks like.

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

  More

  I thank the hon. Members for Wyre Forest and for Aberdeen North. The main question raised is about the level of the fines. To provide some context, the answer is yes—that would need to be amended by further primary legislation; there is not a power in the Bill to change that. It is an increase on previous levels of fines for individuals and organisations—from £5,000 to £10,000 for individuals, reflecting the high inflation we have seen in recent years. On that basis, it gives us certainty that we have seen a substantial increase, and we would not need to change it in the near future, but I take the point that in the longer term, we always need to keep the levels of fines under review, and we will need to do that in this case. I hope that provides the answers to hon. Members’ questions. Question put and agreed to. Clause 30 accordingly ordered to stand part of the Bill. Clause 31 Enforcement by the FCA Amendment made: 41, in clause 31, page 29, line 38, leave out subsection (4) and insert— “(4) For the purposes of this Chapter a person is ‘FCA-regulated’ if they are an authorised person (within the meaning of the Financial Services and Markets Act 2000) in relation to the operation of a pension scheme.”— (Torsten Bell.) This amendment clarifies that the definition of “FCA-regulated”, in relation to a person, refers to the person being FCA-regulated in respect of the operation of a pension scheme (as opposed to in a capacity unrelated to small pots regulations). Clause 31, as amended, ordered to stand part of the Bill. Clause 32 Power to alter definition of “small”

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

  More

  The clause provides the flexibility, as I have just said, to increase or decrease the threshold without requiring new primary legislation, enabling the Government to move quickly and efficiently as developments—whether it be wage growth or changes in contribution patterns—change our pensions landscape. Under the clause, any change to the pot limit must always be approved by Parliament through the affirmative procedure, something that we also discussed last week. The Government are committed to engaging with industry and consumer groups to ensure any adjustments are evidence-based and informed by the relevant data at the time, enabling us to consider wider impacts such as market competition. Under clause 32, the Secretary of State must undertake public consultation, publish details of the proposed amendments and the reasons for making the proposal, and consider any representations made—putting flesh on the bones on the kind of review that would take place, as we have just discussed. New clause 36 seeks to introduce a new provision to the Bill, which would establish a “pot follows member” model for pension consolidation. The new clause proposes that, on changing employment, an individual’s pension pot would automatically transfer into their new workplace’s pension scheme. This proposal is not aligned with the Government’s established policy direction, and it would present significant practical and operational challenges, although I recognise that that approach has been discussed extensively over the last 20 years. The approach taken in the Bill has been shaped through extensive engagement and formal consultation with industry, regulators and consumer groups. As part of that policy development work, largely under the last Government, they and we carefully considered the “pot follows member” approach, including its potential benefits and risks. Our impact assessment shows that the multiple default consolidator solution in the Bill is projected to deliver greater net benefits. The evidence in the impact assessment supports our view that that route offers the best value for savers and for the system as a whole. New clause 36 would require a fundamental overhaul of the current framework that the Bill seeks to introduce. It is not consistent with the rest of the Bill. It would introduce a parallel mechanism that risks duplicating effort, creating confusion and undermining the coherence of the consolidation system. Two of its main downsides are significant administrative barriers for employers, if employees choose to opt out, and the risk that pots are transferred into schemes that offer poor value for money—or, at least, poorer value for money than the ones they are sitting in before they move between employers. For those reasons, I ask the hon. Member for Wyre Forest not to press new clause 36. Clause 33 makes it clear that the small dormant pots consolidation measures in this chapter apply equally to pension schemes run by or on behalf of the Crown and to Crown employees, as we have discussed previously. Clause 34 provides clear definitions for key terms used throughout the small pots legislation to ensure clarity and consistency of interpretation, and clause 35 provides a definition of what constitutes a pension pot. That might be thought to be straightforward, but for the purposes of small pots consolidation we want to provide clarity on the accurate identification and treatment of individual pension pots. To provide an example, if someone is enrolled into the same pension scheme through more than one job and the scheme keeps the accounts separate, each is treated as a separate pension pot so that they can be consolidated together. As Members will be aware, the Pensions Regulator oversees the trust-based schemes and the Financial Conduct Authority oversees contract-based schemes. Clause 36 amends the Financial Services and Markets Act 2000 to ensure that the FCA has the powers required to support the small pots consolidation framework through the existing financial regulatory system. This is a vital enabling provision to provide the FCA with the necessary statutory powers to regulate contract-based schemes that wish to act as authorised consolidators in the years ahead. It allows the FCA to make rules requiring pension providers to notify them if they intend to act as a consolidator pension scheme, and it allows the FCA to maintain a list of consolidator schemes and to apply appropriate regulatory standards to them. More broadly, clause 36 ensures that members of FCA-regulated pension schemes benefit from the same level of protection, transparency and accountability as those in the trust-based system, while also avoiding regulatory gaps and ensuring that all consolidator schemes, regardless of their structure or legal framework, are subject to robust oversight. Consistent with my arguments on clause 36, clause 37 repeals unused provisions of the Pensions Act 2014 related to automatic transfers, also known as “pot follows member”. This is tidying up the statute book. It was the previous Government who initially legislated for “pot follows member”, but they then decided that that was not the policy they wished to pursue and moved away from it between 2014 and 2024. The amendment recognises that and makes sure we do not have powers on the statute book that confuse the situation. Finally, Government amendment 43 is a minor and technical amendment necessitated by the repeal of schedule 17 to the Pensions Act 2014 by clause 37(1)(b) of the Bill. The amendment is necessary to update the statute book and clarify a reference in section 256 of the Pensions Act 2004, which otherwise would have been unclear and was making hon. Members nervous. The amendment does not alter policy, and I ask the Committee to support it. I commend clauses 32 to 37 to the Committee.

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

  More

  It was self-professed weak patriotism. But the hon. Gentleman is completely right to raise the adequacy issue, which is obviously the role of the Pensions Commission, launched in July, to take forward. He and several others are also right to say that making things easier for savers is a really important objective. That is what the pensions dashboard aims to do in the coming years as well. Let me make a set of reflections directly on the question being raised. To be clear, the policy in 2014 was “pot follows member”. That is also the policy within new clause 36. The policy being more supported here is a lifetime pot, which is a different policy. The “pot follows member” is still that the employer chooses the pension scheme and the pot moves to the new employer’s scheme as the employee goes, so it is still an employer-to-a-single-scheme model. The lifetime provider model, also advocated by many in the industry but never part of Government policy—it was not in the 2014 Act—is that each individual holds a pension pot, and, on joining an employer, provides the details of that scheme to the employer, and the employer then pays to multiple pension schemes whenever it does its PAYE. The comments I made refer to the “pot follows member” approach. There is a consensus across the industry that that is not the right way to go; I totally hear the points made in favour of a lifetime provider model. That is not the approach being taken forward by this Bill, but it needs to be kept under review in the longer term. I give hon. Members the reassurance that I will continue to do that.

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

  More

  Never! No. We should clarify what we mean by “industry”: in a lifetime provider model, employers take on a significantly greater administrative burden, because they have to engage with potentially every pension scheme in the country. Admittedly, we are limiting the number of those in future, but still, that is what employers find burdensome about a lifetime provider model. That was the preferred model of the right hon. Member for Godalming and Ash (Sir Jeremy Hunt) when he was Chancellor, but it was never actioned as Government policy. As I said before, the 2014 Act was about “pot follows member”—for good reason, to try to address the small pots worry. I hope that that at least reassures the hon. Gentleman that my notes were the right way up.