Pension Schemes Bill

Baroness Altmann Excerpts

Consideration of Commons amendments and / or reasons
Monday 27th April 2026 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I thank the Minister, including for our meeting on Friday. For the record, we suggested a “have regard” framework, requiring trustees to consider private market investment in alignment with the Mansion House Accord and to report to the regulator. That approach would meet the Government’s stated policy aims without overriding fiduciary duty or distorting the market. It was rejected, apparently because it lacked a sufficiently heavy sanction threat. So we continue and, unfortunately, mandation remains.

At the second round of ping-pong, I dealt with the technical and market concerns, and all those concerns remain. Today, I turn to the constitutional issues. First, fiduciary duty is a foundational principle in our common law. Trustees must act solely in the beneficiary’s interests, yet this clause directs them towards particular asset classes without any statutory defence or immunity. Trustees are left in a double bind: comply and risk personal liability or refuse and face deauthorisation.

Secondly, the process has been procedurally defective. There was no consultation on mandation, discrimination between investment vehicles or the sanction. The Commons amendments this time merely add procedural language around the savers’ interest test, due regard and reasons, which public law already requires. Further, there is the coercive effect of the so-called reserve power, which is already being deployed to pressure schemes and trustees into compliance without the consultation, assessment or regulatory discipline that regulations would require. That is constitutionally improper. Policy is being pursued by threat, not by law.

Thirdly, the savers’ interest test itself is unchanged in substance. The insertion of “likely to” is trivial. The test still reverses the logic of fiduciary duty, savers have not consented to the additional risks, and the penalty of deauthorisation remains draconian and disproportionate.

Fourthly, pension savings are members’ property. A coercive statutory scheme backed by deauthorisation is an interference with property rights that requires clear justification and careful design. Neither is present.

For these constitutional, procedural, proportionality and rights-based reasons, the clause remains defective and the Government’s amendments do not cure it. This is legislation that relies on threat rather than clarity and coercion rather than properly framed substance. I therefore will ask the House to insist on our deletion and to disagree with the Government’s amendments. I beg to move.

[Baroness Altmann (Non-Afl)]

I support the noble Baroness, Lady Bowles. I point out to the Minister that the Mansion House Accord had two parts. The second part had government obligations, on the basis of which the industry voluntarily agreed to invest in the private assets that the Government favour. None of the Government’s obligations is enshrined in the Bill; they are hoped for. The Minister assumes that private assets will definitely outperform and that if savers do not invest in them they will be losing out somehow. There is no underpin for the losses and even if the investment experts decide that they disagree and would not normally want to buy them, they will still be forced to. This is not the way to get pension funds to invest successfully or to trust the Government in the future. I hope that the Government will think again.

[Lord Ashcombe (Con)]

My Lords, I declare my interest as an employee of Marsh, whose sister company Mercer is a pension consultancy, master trust provider and, importantly, a signatory to the Mansion House Accord. Firms that signed the Mansion House Accord last year in good faith, believing that fiduciary duty and trustee oversight would be preserved in order to ensure value for money for the individual pensioners whose funds they are responsible for investing, now face the prospect—or, dare I say, the threat—of mandation. This simply cannot be right, and we certainly do not think so.