19 juli 2024 Pensions

UK Pensions - King's Speech heralds new Pension Schemes Bill

The King’s Speech has confirmed that there will be a new Pension Schemes Bill, which will include measures:

  • preventing people from losing track of their pension pots through the consolidation of defined contribution individual deferred small pension pots;
  • ensuring all members are saving into pension schemes delivering value through the value for money framework;
  • requiring pension schemes to offer retirement products so people have a pension and not just a savings pot when they stop work by placing duties on trustees of occupational pension schemes to offer a retirement income solution or range of solutions, including default investment options, to their members;
  • consolidating the defined benefit market through commercial superfunds;
  • reaffirming the Pensions Ombudsman as a competent court, removing the need for schemes to apply to the courts to enforce Ombudsman determinations in relation to the recovery of overpayments; and
  • amending the definition of “terminal illness” for the purposes of the Pension Protection Fund and the Financial Assistance Scheme so that eligible members can receive a lump sum payment at an earlier stage

Most of these measures have been in development for some time, so their inclusion is not entirely surprising. However, it is a little unexpected that a Pension Schemes Bill has been announced before the new government has completed its promised pensions review. The measures are therefore largely a continuation of the policies developed by the previous government rather than representing any new Labour policies on pensions.

It is also notable that there is no suggestion of schemes being required to disclose their levels of investment in UK equities and nor are there any new requirements in relation to climate change. There is also no mention of changes in relation to surplus refunds, the introduction of a public sector consolidator, the extension of collective defined contribution (CDC) provision to accommodate unconnected multi-employer schemes, or further reforms to auto-enrolment.

For more information, please speak to your usual Linklaters contact.