Pension Schemes Bill [HL]

Debate between Baroness Janke and Lord Flight

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 26th February 2020 Grand Committee

[Lord Flight]

My Lords, I want to point out that Amendment 28 is important because members of pension schemes do not generally have much knowledge or understanding of how their assets are invested and managed. This clause places a reporting duty on the Pensions Regulator to publish statements of investment principles under Section 35 of the Pensions Act. The amendment would also place a requirement on the Pensions Regulator to create an SIPP repository, accessible to the public through its website, so that all scheme members could check their scheme’s investment strategy.

It will be interesting to see how investment strategies are described. I think that it will be necessary for them to be described in a way that is readily understandable by all citizens.

[Baroness Janke (LD)]

My Lords, my Amendment 89 relates to the occupational pension schemes regulations in the statement of investment principles. Again, it is about compliance with the Paris Agreement, particularly to hold the global average temperature increase to well below 2 degrees centigrade. Other amendments in the group seek compliance in this area.

It is clearly very important to protect the interests of savers and the economy. I am grateful to the Minister for her amendments on climate change risk, her speedy response and her awareness of issues arising in this area. I have also supported Amendments 75 and 92. I certainly support Amendment 28 from the noble Baroness, Lady Altmann, on the register and publication of the SIPPs from all pension schemes, and understand the administrative problems of smaller ones.

As we have heard from others, the size of the pension fund is hugely influential, particularly in transforming the economy into a green economy. I believe that pension schemes have had enormous effects in other areas. My own recollection is of South Africa, where schemes exerted very strong influence. In my city of Bristol, when creating a smoke-free city, we sought to get the pension schemes and their investors to support it. This can be a very powerful instrument in changing behaviour and thinking; I hope that it will be.

The noble Baroness, Lady Hayman, mentioned that her amendments extend to all pension schemes. Again, I am not clear what the differences are. I note that the briefing from the ABI suggests that the PRA and the FCA are better placed to deal with the smaller pension schemes, but I would like to hear the views of the Minister on this. I very much support the spirit and content of most of the amendments in this group.

Pension Schemes Bill [HL]

Debate between Baroness Janke and Lord Flight

Committee stage & Committee: 1st sitting & Committee: 1st sitting : House of Lords
Monday 24th February 2020 Grand Committee

[Baroness Janke (LD)]

My Lords, I too signed Amendment 2, which my noble friend Lord Sharkey so ably introduced. I will be brief because I think all the arguments have been very well covered. The only thing that I would add is that the importance of transparency in a scheme such as this seems fundamental. I know we are talking about communications and ensuring that members are fully aware of what they are signing up to, both the benefits and the disbenefits later on, but, as part of the arguments that have been put forward in favour of this group of amendments, there is the whole issue of explanation and ensuring that members are fully aware of their position under this type of scheme. I particularly support the idea that in order for a scheme to be registered, the explicit prerequisite is to show what the strategy is to address the whole issue of intergenerational fairness. I know we will be talking about capital buffers later on, but the amendments address the interests of transparency and fairness and the welfare of all members of the scheme, and I support them.

[Lord Flight (Con)]

My Lords, it will be very important to address these issues because I suspect that CDCs will become very popular among the younger generation as they have considerable attractions. I add only that the principle of building up of reserve seems to be one way of evening out fairness.