Pensions Dashboards (Prohibition of Indemnification) Bill

Debate between Lord Young of Cookham and Baroness Sherlock

3rd reading
Friday 21st April 2023 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I am pleased that the Pensions Dashboards (Prohibition of Indemnification) Bill has now reached its final stage in your Lordships’ House. I thank my noble friend the Minister and his officials for their support, as well as those noble Lords who supported the Bill on Second Reading: my noble friends Lady Altmann and Lord Holmes, who flank me on either side, the noble Baroness, Lady Sherlock, and the noble Lord, Lord Sharkey, all of whom who are present in the Chamber this morning to ensure the safe passage of this legislation. I am also grateful to Mary Robinson for introducing the Bill and expertly steering it through all stages in the other place.

The Bill’s purpose is clear. It will increase protection for pensions savers by making it a criminal offence for trustees and managers of occupational pension schemes to reimburse themselves using assets of the pension scheme for penalties imposed on them due to non-compliance with any relevant pensions dashboard regulations. I hope noble Lords recognise the importance of the Bill and agree to its passage today. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I congratulate the noble Lord, Lord Young of Cookham, on piloting the Bill through the House with his usual flair, and it is very nice that we can all be here to see it on its way. It is a narrowly focused Bill which simply addresses a lacuna in the original legislation, and we are happy to support it. I also thank the noble Viscount for giving us an assurance at Second Reading that before long, we can look forward to an update on the likely implementation of the pensions dashboards themselves. It remains of paramount importance that people can save for their retirement with confidence and with an understanding of all the implications of the choices they are making or that have been made on their behalf. We support the creation of a pensions dashboard to contribute to that goal, although we will continue to debate with Ministers choices about how it can best be done. For today, we are pleased to wish this Bill on its way.

[Viscount Younger of Leckie (Con)]

My Lords, I, too, am grateful to my noble friend Lord Young of Cookham for presenting his Bill to the House, and to my honourable friend in the other place, Mary Robinson, for her skilled stewardship of the Bill. It is a pleasure again to offer my support for the Bill on behalf of the Government. I, like my noble friend, also thank all noble Lords who were present for Second Reading for their interest in the Bill and for supporting it as it moved towards its final stage.

I committed to follow up on the topics relating to this Bill and questions about pensions dashboards more broadly that were raised by noble Lords during the previous debate. I have placed copies of letters I sent after Second Reading in the House Library, and they are also available on the Bill’s webpage—hopefully, noble Lords have had a look at them. I hope the letters sent have helped to address these queries, which included asking for an update on progress on the department’s state pension records correction exercise, the readiness of public service pension schemes to connect to dashboards, and whether penalties could be incurred for loading incorrect data to pensions dashboards. Queries were also raised more specifically about the penalties which could be imposed on trustees and managers of occupational pension schemes under the proposals in the Bill, and for compliance breaches under the pensions dashboards regulations.

I further addressed questions about the challenges faced by the pensions dashboards programme in delivering the digital architecture underpinning pensions dashboards. On this final point, I made clear to the House during Second Reading the importance of this Bill, and that it is needed irrespective of the delivery timeline for pensions dashboards. To be helpful to the noble Baroness, Lady Sherlock, I also pledged—and I stick to that pledge—to update noble Lords as soon as is reasonably possible, and an invitation will be forthcoming.

To reiterate why the Bill is required, it corrects a legislative gap which, left as it is, means that no provision would prohibit trustees or managers from reimbursing themselves using pension scheme assets to pay penalties in respect of breaches of any relevant pensions dashboards regulations. There was unanimous agreement among noble Lords at Second Reading that this would be unacceptable.

The proposals under this Bill seek to deter rogue actors from reimbursing themselves using the assets of pensions scheme members by allowing criminal proceedings to be brought against trustees or managers of occupational pension schemes if they are reimbursed and knew or had reasonable grounds to believe that they had been reimbursed as such. If a trustee or manager is found guilty of this offence, the Bill’s provisions allow for a maximum sentence of up to two years in prison, or a fine, or indeed both.

As I emphasised at Second Reading, the Bill does not place any new requirements on trustees or managers of occupational pension schemes or burden them with additional costs. It simply extends an existing prohibition in Section 256 of the Pensions Act 2004, which already applies to a number of areas of pensions legislation, to include pensions dashboards.

To conclude, the Bill rightly increases protection for consumers saving for their retirement. I do hope, therefore, that the whole House will join me in its support for my noble friend’s Bill and agree to its passage.