Pensions: Interim Guidance for Superfunds
Guy Opperman Excerpts(4 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The pensions regulator has today published an interim regulatory regime for defined benefit pension “superfunds”.
A superfund is a privately funded “for profit” consolidation vehicle, which takes over responsibility for defined benefit pension schemes liabilities from the sponsoring employer. To enter a superfund, sponsoring employers are required to pay a significant, upfront sum to improve the funding level of their scheme, in exchange for discharging their pensions liabilities.
This is an interim regime. The Government will continue to develop the permanent regime before legislating, with full and proper parliamentary scrutiny in the usual way.
Operation of the interim regime will be kept under review by the Government to ensure that it is properly protecting and advancing the interests of pension scheme members and the pension protection fund.
The Government will continue to develop a permanent regime for superfunds. This is an innovative area and market participants should not assume that the permanent regime will automatically replicate the interim regime. Alongside responses to the defined benefit pension scheme consolidation consultation, the Government will be informed by experience gained during the interim regime when considering the features of the permanent regime, including those relating to capital adequacy. The permanent regime may include an alternative set of requirements, including more prudent requirements, compared to the interim regime, but we cannot pre-empt the parliamentary process.
The permanent regime will be designed to protect pension scheme members and the pension protection fund, including by ensuring that superfunds have the necessary flexibility to continue contributing to a strong pensions ecosystem in which sponsoring companies and scheme trustees have a range of options open to them.
The Government believe that superfunds have the potential to improve the likelihood of members getting their benefits in full whilst providing employers with a new, affordable option to manage their legacy pension liabilities. However, if at any point it appears that changes to the interim regime are required in order to protect and advance the interests of scheme members, the Government and the pensions regulator will take prompt, robust action.
Today’s publication will mean that the pensions regulator will have a much firmer basis to take action against a superfund should they deem it a necessary and proportionate step.
The guidance can be accessed at the following address:
https://www.thepensionsregulator.gov.uk/en/document-librarv/regulatorv-guidance/db-superfunds
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Pensions
Guy Opperman Excerpts(4 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman) [V]
I beg to move,
That the draft Automatic Enrolment (Offshore Employment) (Amendment) Order 2020, which was laid before this House on 16 March, be approved.
Mr Deputy Speaker (Mr Nigel Evans)
With this we shall take the following motion:
That the draft Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2020, which were laid before this House on 16 March, be approved.
The Minister is asked to speak for no more than 20 minutes
Guy Opperman
I am pleased to introduce these instruments, which follow the statement that I laid before the House on 16 March. It is an honour to address the House remotely, and to be the first Member of Parliament for Hexham to do so. I hope that it is also the last time I do so, and that we can get back to business as usual and to the Parliament that we had before.
Before I turn to the substance of the instruments, Mr Deputy Speaker, I hope that you will indulge me briefly while I comment on some of the matters before us. We have a situation in which 25% of the working population are furloughed, with their wages paid for by the Government, and the Department for Work and Pensions is undertaking the Herculean task of taking well over 1 million people on to universal credit. As you will know, Mr Deputy Speaker, it is also Star Wars Day. While I am absolutely certain that the force is with you, I hope that the force is also with my broadband provider. If it fails, I can assure you that I will not blame the Government.
It is an honour to be a Minister at the DWP and to be the first to move regulations in this way. In her statement earlier, the Secretary of State rightly thanked our fantastic workforce, who have worked day and night to ensure that all the DWP’s services are provided in a professional and competent manner. I should like to put on the record my thanks to all the staff who work at the DWP, including those in jobcentres up and down the country, such as Hexham jobcentre in my constituency.
I also thank everybody at Team Pensions, who have worked tirelessly to ensure that covid-19 does not adversely impact local and national populations. In particular, we have cancelled the pension levy increase, help has been given to defined contribution and defined benefit providers, and we continue to try to stop the public being scammed. Finally, I thank my team in Hexham, led by James McArdle, and my team at the DWP, led by Lauren Thomas.
Mr Deputy Speaker, you are aware of the importance of automatic enrolment in all our constituencies, and these instruments are important. Automatic enrolment is one of the great cross-party success stories. Conceived under a Labour Government, formulated and brought forward under the coalition, and expanded under a Conservative Government, it is one of the finest public policy successes in the last generation. We now have 10 million plus people who have been automatically enrolled on to an occupational pension; automatic enrolment has transformed workplace savings. They are now saving 8% per annum on an ongoing basis, which simply was not the case previously.
The instruments will implement the conclusions of the 2018 statutory review. The review concluded that automatic enrolment into workplace pensions should continue for eligible employees in the maritime industries, ensuring their access to a pension in the same way as workers in the rest of the UK economy. Subject to the approval of the House, the instruments will remove the sunset clauses contained in the original 2012 legislation so that it continues in force beyond the current expiry date of 1 July 2020. The business of the Government goes on notwithstanding the impacts of covid-19. We will overcome this pandemic, we are Great Britain. I commend these regulations to the House.
Mr Deputy Speaker (Mr Nigel Evans)
I ask the shadow Minister not to speak for longer than 15 minutes.
Guy Opperman [V]
I will speak briefly in response. I thank both hon. Gentlemen for their support for the regulations. It is entirely right that my Labour colleague, the hon. Member for Birmingham, Erdington (Jack Dromey), should say that this is a cross-party success story, and I thank him for the commendable way in which he has approached these regulations and the work that we do together. On the comments by the hon. Member for Aberdeen South (Stephen Flynn), who speaks for the Scottish National party, I would merely point out that approximately 24% of the population have been furloughed and are being supported by taxpayers and the Government and that over 1 million people have recently moved on to universal credit, massively enhanced. There is no doubt that there are great difficulties in the north-east of Scotland, but I am certain that the Chancellor and the entire Government are fully supportive, whether through the coronavirus job retention scheme or any of the other schemes that they are putting forward, to ensure that this country gets through this terrible pandemic.
Question put and agreed to.
Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2020
Resolved,
That the House has considered the Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2020.—(Stuart Andrew.)
Pensions: COVID-19 Response
Guy Opperman Excerpts(4 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I am writing to inform the House of the steps this Government are taking to support pension savers, pension schemes, trustees, employers and existing pensioners during the coronavirus pandemic.
General pensions levy
On 31 March 2020, the Government revoked the planned increase in the general pensions levy on occupational and personal pension schemes that was due to take effect on 1 April 2020. The levy recovers funding provided by the DWP in respect of the core activities of the pensions ombudsman, and part of the activities of the Pensions Regulator and the Money and Pensions Service. These measures will result in an estimated £4.9 million of savings for the private pensions sector.
We will now be focused on reviewing the structure of the levy and engaging with industry, at the appropriate time, on the best way forward on levy funding.
Coronavirus job retention scheme
Key to supporting both businesses and pension savers is the coronavirus job retention scheme (CJRS) which offers an unprecedented package of support for businesses. This scheme has been designed to be as straightforward as possible, ensuring it aligns with and works for most business practices.
Under this scheme, the grants available to employers will support business by covering up to 80% of a furloughed worker’s regular salary, capped at £2,500 per month. Additionally, these grants will also cover employer pension contributions into registered pension schemes on behalf of furloughed employees for any workplace pension scheme. Employers can claim up to the minimum employer pension contribution of 3% of qualifying earnings required under employers’ automatic enrolment duties, even if it is not an automatic enrolment pension scheme.
By easing the burden of workplace pensions for employers with furloughed staff we are helping them better manage costs during the crisis while supporting long-term saving for the future. The measures recognise the importance of protecting the hard won improvements in retirement provision for millions of savers achieved through automatic enrolment.
The CJRS went live on 20 April and claims can be backdated to 1 March where workers have already been furloughed. Information on the scheme can be found here:
https://www.businesssupport.gov.uk/faqs/.
To help support employers, the Pensions Regulator has detailed guidance on its website here:
https://www.thepensionsregulator.gov.uk/en/covid-19-coronavirus-what-you-need-to-consider/automatic-enrolment-and-pension-contributions-covid-19-guidance-for-employers.
We are continuing to work closely with the pensions industry to explain the detail of the CJRS scheme and to help providers take a pragmatic approach to disruptions to workplace pensions experienced by their clients.
Defined benefit schemes
The Government also recognise that these are challenging times for defined benefit pension schemes. The current scheme funding regime, overseen by the Pensions Regulator, is sufficiently flexible to cope with the current situation and the Regulator’s guidance published on 27 March sets out specific easements to its regulatory regime in recognition of the difficulties that some schemes and sponsors may have in the context of the current emergency. This can be found at:
https://www.thepensionsregulator.gov.uk/en/covid-19-coronavirus-what-you-need-to-consider/db-scheme-funding-covid-19-guidance-for-employers.
The best possible protection for members of defined benefit schemes is a strong profitable employer, and with the existing flexibilities and easements there is no reason why a pension scheme should push an otherwise viable employer into insolvency.
In the event where a sponsoring employer does become insolvent, and the scheme is not well enough funded to secure full benefits, the Pension Protection Fund, which is well equipped to weather market turbulence, will pay members compensation.
The Pensions Regulator has already set out its expectations of trustees of both defined benefit and defined contribution pension schemes and for employers and administrators, including the key risks they should focus on. The Regulator has confirmed that it will take a proportionate and risk-based approach towards compliance and enforcement decisions during these challenging times, with the aim of supporting employers, providers and savers.
Pension scams and transfers
The Government are committed to protecting savers during these unprecedented times and we are working with regulators to identify additional ways to support and safeguard individuals. At present, there is no robust evidence to suggest that savers are making hasty decisions to transfer pension funds or are being targeted by fraudsters. However, we are continuing to work closely with the Pensions Regulator, the Financial Conduct Authority (FCA), the Money and Pensions Service (MaPS) and pension providers to identify any new trends or issues and will take proportionate action if required.
In addition, we have supported the collaborative approach the Pensions Regulator, the FCA and MaPS have taken, communicating to savers to use MaPS, Pensions Wise or the Pensions Advisory Service channels for guidance before making decisions about retirement to protect people against scams. Furthermore, MaPS has produced information and guides to support individuals in making decisions about their money, debt and pensions at this challenging time. This includes reiterating that where appropriate Pension Wise guidance sessions can help an individual to understand their options fully. This can be found at: https://www.moneyadviceservice.org.uk/en/articles/coronavirus-what-it-means-for-you.
Access to state pension and benefits for people asked to shield themselves
There are approximately 900,000 users of the Post Office card account (POca) system for accessing their pensions or benefits. These POca customers ordinarily need to leave the house to access payments at the Post Office. The Department has worked closely with the National Shielding Service which is contacting clinically vulnerable citizens who have been advised by NHS England to shield as a result of the coronavirus pandemic.
We launched a new service on 10 April through which we have contacted 27,000 citizens who have POca accounts and we considered who may need support to access their benefit or state pension payment.
The Department has worked tirelessly to identify those older, vulnerable customers who urgently require help to access their payments. For those needing help, DWP visiting officers are able to discuss a number of options available to customers over the phone and we have worked closely with Post Office Ltd to provide contact free cash payments by Royal Mail special delivery to support the most vulnerable, with guaranteed next day delivery. This cash service adds to a range of measures we are using to support these individuals shielding at home.
State pension
In November 2019 the Government announced measures to increase most state pension rates by 3.9% in line with the annual growth in earnings, at the same time as announcing an end to the benefit freeze.
This meant that on 6 April 2020 the full rate of the basic state pension increased from £129.20 to £134.25 per week and the full rate of the new state pension increased from £168.60 to £175.20 per week—with working age benefits uprated by inflation. This was the largest increase in state pension in eight years.
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Seafarers and Offshore Workers'Pensions: Automatic Enrolment
Guy Opperman Excerpts(4 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention secondary legislation to ensure that seafarers and offshore workers continue to benefit from automatic enrolment into workplace pensions.
Our workplace pension reforms are designed to address the fact that millions of people were not saving enough for their retirement, and automatic enrolment (AE) was created to help them with their long-term pension savings. AE has been a great success to date. Over 10 million people have been automatically enrolled into a workplace pension and more than 1.6 million employers have complied with their legal duties across the whole economy. It is estimated that 26,000 more workers in the maritime industries were saving into a workplace pension in 2019 as a result of AE.
After the Pensions Act 2008 became law, most employers were brought into AE duties via secondary legislation introduced in 2011 but it was decided to give more time for employers in the maritime industries to allow for fuller consideration of the circumstances of workers in this sector. Seafarers and offshore workers were subsequently brought into AE in July 2012, via regulations and an Order in Council, and following a further public consultation. The 2012 legislation included sunset clauses taking effect on 1 July 2020.
Following a post-implementation review (PIR) in 2018 (which can be viewed, here: www.legislation.gov.uk/uksi/2012/1388/pdfs/uksiod_20121388_en.pdf) and, based on the available evidence, the Government concluded that AE should continue to apply to all qualifying workers in the maritime industries. In order to deliver on the review’s recommendation, I am today announcing my intention to lay instruments in both Houses. These instruments will remove the sunset clause from the existing legislation so that it continues to provide for workplace pensions for eligible employees in those industries.
In accordance with section 149 of the Equality Act, I can confirm I have given due regard to the need to: eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Act; advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; foster good relations between persons who share a relevant protected characteristic and persons who do not share it. In respect of these instruments, I have considered my duties under section 31(3) of the Small Business, Enterprise and Employment Act 2015. In my view, it is not appropriate to make provision for a further statutory review in The Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2020.
A regulatory impact assessment will be published alongside these instruments, and can be viewed at: www.legislation.gov.uk. The Regulatory Policy Committee has validated this impact assessment which has been given a green rating.
A copy of the committee’s opinion will be published on www.gov.uk.
[HCWS160]
Oral Answers to Questions
Guy Opperman Excerpts(4 years, 6 months ago)
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Harriett Baldwin (West Worcestershire) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
You have impeccable timing, Madam Deputy Speaker.
Workplace pension participation rates have more than doubled since the introduction of automatic enrolment under the coalition Government in 2012, rising from 42% in 2012 to 85% in 2018. In West Worcestershire, my hon. Friend’s constituency, 9,000 eligible jobholders have been automatically enrolled, and thanks are due to the 2,600 local businesses that are supporting them.
Harriett Baldwin
This has truly been one of the great policy successes of the last decade, but many would argue that people are still not saving enough for a comfortable retirement. Does the Minister plan to use other nudge techniques, such as automatic uplifts whenever a person gets a pay rise, to encourage saving for old age?
Guy Opperman
We have the 2017 review, which we continue to monitor and will implement going forward. Automatic increases are not part of the Government’s present plans, but I am actively looking to learn from private sector companies that are carrying out similar initiatives. I welcome my hon. Friend’s interest and would be happy to discuss this in more detail.
Jack Dromey (Birmingham, Erdington) (Lab)
Auto-enrolment, the creation of the last Labour Government, has transformed the lives of millions, with 10 million more now saving into a workplace pension, but 5 million people are still not covered because they are too young, because they earn too little or because they are self-employed.
The hon. Member for West Worcestershire (Harriett Baldwin) is right that 8% cannot be the summit of our ambition to ensure security and dignity in retirement. Does the Minister agree that 8% cannot be right, and will he agree to cross-party talks on putting right that wrong?
Guy Opperman
As the hon. Gentleman knows, we frankly speak far too often—virtually on a weekly basis —to ensure a cross-party approach to pensions policy. He is right that automatic enrolment was conceived under a Labour Government, implemented under the coalition and brought forward by the Conservatives. I accept that 8% is not enough going forward, but we await the 2017 review, the implementation of that review and further discussions on an ongoing basis.
Stephen Crabb (Preseli Pembrokeshire) (Con)
This Government need to demonstrate that they stand on the side of self-employed people. Given that millions of self-employed people are not saving enough for their retirement, what update can the Minister provide the House on the incentives and encouragement we are providing for self-employed people to pay into a pension?
Guy Opperman
As a formerly very fat, self-employed jockey and a self-employed white-collar barrister, I fully appreciate the issues concerned. I agree with my right hon. Friend that these are issues we have to address. He will be aware that we are trialling self-employment matters on an ongoing basis with the National Employment Savings Trust and a variety of private sector organisations. We welcome unions and other organisations that wish to be part of that, and it is front and centre of what we are trying to do.
Nick Smith (Blaenau Gwent) (Lab)
Too many young people do not save for their pensions, so how can the Minister ensure that young workers are better represented in workplace pension schemes?
Guy Opperman
The statistics are actually getting better by the minute. In 2012, only 35% of young people aged between 22 and 29 saved into a workplace pension. Now 85% of 22 to 29-year-olds save, but there is more we can do, including for the self-employed. The 8% that is being saved has made a transformational difference, and the opt-out rate among the young is the lowest of all the cohorts.
Giles Watling (Clacton) (Con)
Joanna Cherry (Edinburgh South West) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The Government are committed in legislation to undertake a review of state pension age every six years. The 2017 independent review was by John Cridland. The next review will be conducted by 2023 and will give consideration to the latest life expectancy projections. The latest Office for National Statistics projections of cohort life expectancy, published in January 2020, showed that it is projected to continue to increase, and the WHO Global Health Observatory data show that people in the United Kingdom have better life expectancies than European or world averages.
Joanna Cherry
The new Marmot review has shown that a decade of Tory policies, from cruel benefit cuts to the unfair treatment of the WASPI women, have stalled life expectancy and increased the years spent in ill health for the poorest in our society. Which Tory policy would the Minister reverse first to begin to undo that damage?
Guy Opperman
I am afraid that the hon. and learned Lady is wrong. I will quote from the Marmot review, which says on page 13 that
“Increases in life expectancy have slowed since 2010”,
but then adds at page 15 that
“Life expectancy at birth has been increasing since the beginning of the 20th century.”
Mark Fletcher (Bolsover) (Con)
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Changes to state pension age were made by successive Governments from 1995, including the Labour Government from 1997 to 2010, and addressed the long-standing inequality in pension age. This includes the Pensions Act 2007, which I believe the hon. Lady supported. Women continue to have the same eligibility for support from the welfare system as men with the same date of birth, and this country presently pays more in welfare support than ever before.
Mrs Hodgson
Approximately 6,100 of my constituents have been affected by the equalisation of the state pension age, and many have told me of the financial hardship that they and their families are suffering because of the change and their inability to work any longer. Last week, there was another lobby of Parliament that I, together with lots of people who will be in the House today, attended—it was packed. Another one is coming up soon. These women stressed to me last week that they are not going away and are not going to give up, so what is the Minister going to do to give some justice to those amazing women?
Guy Opperman
The hon. Lady will be aware that full restitution would cost something in the region of £215 billion and that a case was before the courts last year: on all grounds, these ladies lost their case. Clearly, that matter is subject to appeal, but the case was lost in respect of every ground, including notice.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Felicity Buchan (Kensington) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
As my hon. Friend will be aware, this was introduced in 2012 and has been a cross-party success story. It is fantastically good news for her constituents in Kensington, where 39,000 residents are signed up to an 8% automatic enrolment. Due thanks need to be given to the 5,300 local businesses who are supporting individual constituents, who are receiving 8% per annum workplace savings.
Margaret Greenwood (Wirral West) (Lab)
The Government tried to justify introducing the new bereavement support payment in April 2017 on the grounds that it modernises support, but couples who are not married or not in a civil partnership are not eligible. Last month, the High Court in England found that that is incompatible with human rights legislation and discriminates against children of unmarried parents. The Prime Minister has admitted that that is an injustice, so when will the Government put it right?
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Four out of 10 older people say that the TV is their main source of company, yet as a result of Government decisions, millions of older pensioners are about to lose their free TV licences. The Budget is the last opportunity for the Chancellor to step in and overturn this unfair policy. Will the Secretary of State urge him to do so?
Guy Opperman
As the right hon. Lady knows only too well, this is a BBC decision. The Government remain very disappointed at its decision and urge it to think again.
Automatic Enrolment Thresholds
Guy Opperman Excerpts(4 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Automatic enrolment into workplace pensions (AE) has been a great success to date with over 10 million people having been automatically enrolled and more than 1.6 million employers meeting their duties. Over 2019-20, working people will save an estimated extra £18.8 billion into workplace pensions as a result of these reforms.
The main focus of this year’s annual review of the AE earnings trigger and qualifying earnings band (the AE thresholds) is to ensure the continued stability of the policy while learning from the April 2019 AE contribution rate increase. We also want to ensure that our approach continues to enable individuals, for whom it makes economic sense, to save towards their pensions while also ensuring affordability for employers and the Government. The review has concluded that the earnings trigger will remain at £10,000 and both the lower and upper earnings limits will continue to be aligned to the national insurance contribution thresholds.
I intend to lay an order before Parliament following the February recess which will serve to amend the Pensions Act 2008 so that, for 2020-21:
the lower limit of the qualifying earnings band will be £6,240;
the automatic enrolment earnings trigger will be maintained at £10,000;
the upper limit of the qualifying earnings band will remain at £50,000.
The analysis supporting the proposed revised AE thresholds will be published in due course. A copy of this will be placed in the Library of the House and will be available on the www.gov.uk website, following publication.
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Pensions
Guy Opperman Excerpts(4 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I beg to move,
That the draft Guaranteed Minimum Pensions Increase Order 2020, which was laid before this House on 27 January, be approved.
The GMP increase order is an entirely technical matter that is attended to in this place every year. It is subject matter that is dealt with under every successive Government. The statutory instrument provides for defined-benefit or final-salary occupational pension schemes that are contracted out to increase members’ guaranteed minimum pensions that accrued between 6 April 1988 and 5 April 1997 at 1.7%, in line with the increase in the consumer prices index to September 2019. I commend this order to the House.
Oral Answers to Questions
Guy Opperman Excerpts(4 years, 8 months ago)
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Ruth Edwards (Rushcliffe) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
With over £1.6 trillion in assets, UK occupational pension schemes have a significant role to play in supporting the Government’s commitment to net zero by 2050. Our environmental, social and governance regulations, introduced by this Conservative Government in October 2019, mean that schemes are now required to disclose their policy on climate change. In March, we intend to publish game-changing guidance on climate-related financial disclosure. I have written to the 50 largest schemes in the country to urge them to act on their investment duties and to tackle climate risk.
Jerome Mayhew
I welcome the progress that has been made on pension funds addressing climate change and ask the Minister to meet me concerning a constituent who is unable to access her pension fund without paying in excess of £2,000 in fees for independent financial advice —money she does not have until she accesses her fund.
Guy Opperman
I welcome my hon. Friend to the House, and I am happy to meet him—that will happen very soon. His constituent should understand that Parliament collectively required a £30,000 threshold whereby no individual can withdraw their defined benefit pension without first receiving advice from an independent financial adviser. As a Conservative, I am of course very keen for individuals to make their own decisions about their own money, but this decision was made and it ensured that an individual is protected from a decision without advice.
Ruth Edwards
As my constituents in Rushcliffe save for their retirement, they want to know about the potential financial risk to their pension pots from climate change and that their savings are helping to tackle, rather than embed, the climate crisis. My hon. Friend has done a lot to ensure that ESG plays a key part in pension providers’ decision making. Will he consider requiring them to disclose their exposure to climate-related risk to their members?
Guy Opperman
It is a pleasure to welcome my hon. Friend to the House. She obviously knows that Ken Clarke was a legend to us all, and I am sure that she will be a great champion on behalf of the citizens of Rushcliffe.
Sadly, too few schemes are making any form of disclosure about their environmental investments and their climate risk, and I am determined to change that. Every private occupational pension holder should be able to know, individually, how their fund is invested and be able to hold the trustees and asset managers to account.
Jack Dromey (Birmingham, Erdington) (Lab)
With Australia burning, South sea islands drowning, millions suffering from pollution and many dying, the world faces an unprecedented climate crisis. The power of pension funds is immense and, while I welcome the funds that have demanded that investment managers must, in the words of the Minister, “do the right thing”, so much more can, and should, be done. Will he therefore agree to cross-party, Front-Bench discussions, including on convening a pensions summit of all those with power, urging them to discharge their responsibilities to clean up our world?
Guy Opperman
I have been fortunate to work with the hon. Gentleman on a number of policies over the two and a half years that we have both held this portfolio. Clearly, I will wait to see the details of his proposals, but I would be delighted, subject to having read and considered them properly, to meet him and, at the very least, discuss how we take these matters forward.
Ms Angela Eagle (Wallasey) (Lab)
It is important that there is cross-party working on things that are as long term as pensions, but will the Minister assure the House that this transparency, which we all welcome, will not be paid for by massively increased fees charged to savers?
Guy Opperman
The hon. Lady will understand that there are two points to her question: the Task Force on Climate-Related Financial Disclosures is a voluntary arrangement that organisations have already entered into, and ongoing disclosure takes place; and in respect of the fees, the Government have agreed to review the matter in 2020, and we will look at that.
Jack Dromey (Birmingham, Erdington) (Lab)
The Government have said that the aim of the Pension Schemes Bill is to support pension saving, putting the protection of people’s pensions at its heart. However, this weekend, we learned that the Financial Conduct Authority is preparing to write to just over three quarters of firms that advised individuals on pensions between 2015 and 2018 about “potential harm” in their defined benefit transfer advice. How can the Government claim to have a joined-up pension policy when pension freedoms can be exploited, giving licence to rogue financial advisers to put at risk people’s savings for retirement? Some have paid a terrible price, impoverishing them for years to come.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The hon. Gentleman will realise that FCA rules already require an individual to seek independent advice when making a DB transfer, but I urge the FCA both to crack down on transfer scammers and to ensure that the quality of advice is fit for purpose. I welcome the FCA’s action at this stage.
Rob Roberts (Delyn) (Con)
Guy Opperman
My hon. Friend is right to raise that important point. We already publicise pension credit as much as we can, but we are working hard to get material into jobcentres and local authority premises to ensure that take-up is as high as possible.
Stephen Timms (East Ham) (Lab)