Pensions Dashboards (Prohibition of Indemnification) Bill

Mary Robinson Excerpts

2nd reading
Friday 15th July 2022 Commons Chamber

[Mary Robinson (Cheadle) (Con)]

I beg to move, That the Bill be now read a Second time.

This is a simple yet important measure designed to safeguard the interests of pension savers, but before going into the detail about precisely what my Bill would achieve, it may be worth while to provide some context about what pensions dashboards are and the work that the Government are doing to make them a reality. Pensions dashboards are an electronic communications service that will revolutionise the way people interact with their pensions by allowing individuals to see their pensions information, including the state pension, in one place online—at the touch of their laptop, smartphone or tablet. Dashboards will help individuals be reunited with their lost or forgotten pensions, and support people in better planning for their retirement.

An important point to mention is that while users will be able to view their pensions, they will not be able to make transactions, so they would not be able to combine or move pension pots within the dashboard. That is because, in order to introduce dashboards as soon as possible, they will start with a basic level of information, but they will include more detail as our understanding of consumer needs develops. The Government believe that to develop a digital service that is safe, useful and relevant to consumers, future enhancements to dashboards’ functionality should not be decided before the initial offer has been tested with users and any behavioural effects are understood.

Delivering pensions dashboards was a manifesto commitment of this Government, but the idea of a pensions dashboard has received widespread support from Members across the House, and it is not hard to see why. With the success of automatic enrolment, millions more are saving for their retirement and may have multiple pension pots, with no easy way of keeping track of them. Dashboards will bring pensions into the 21st century, and make it as easy for people to review their pensions savings as it is to view their bank accounts on their phones.

The Government are keen to see dashboards available as soon as possible to help consumers plan for their retirement. However, it is important to get the design of the service right to ensure that it is accurate, secure and consumer-focused. Developing a comprehensive service that can cater for the potential 52 million UK adults who could use dashboards, involving data from thousands of pension schemes, is complex and should not be rushed. The Government have, however, made excellent progress to make pensions dashboards a reality. The Money and Pensions Service has established the pensions dashboards programme team to design and implement the digital infrastructure that will make pensions dashboards work. The programme is on track and continues to move forward at pace, with work ongoing on the build of the central digital architecture, and research and testing to feed into the design and development of the service.

Hon. Members may recall our voting at the beginning of this Parliament to pass what is now the Pension Schemes Act 2021, which provided the primary legislative framework to make pensions dashboards possible. The Department for Work and Pensions has since consulted on the draft Pensions Dashboards Regulations 2022, which will apply to relevant occupational pension schemes, and the Government have this week published their response to that consultation. The Financial Conduct Authority has also consulted on equivalent rules for personal and stakeholder pensions to ensure that the information provided on dashboards will be comprehensive.

There will be a dashboard service provided by the Money and Pensions Service, which will launch first. That is because the Government believe very strongly in the importance of a Government-backed, impartial dashboard, and are committed to having the MaPS dashboard available from the start. In addition, it will then be possible for others to enter the market and provide dashboards, which will be bound by requirements set out in regulations and regulated by the Financial Conduct Authority. That will provide scope for innovation, helping to engage a broad range of users and meet the varied needs of the millions of people with pensions savings. Importantly, individuals will see the same information regardless of which dashboard service they use, and robust rules will be in place to ensure consumers’ interests are at the forefront of all dashboards.

Ensuring that user data is properly secured on the dashboards will be a significant consideration. The Government have taken care to ensure that pensions dashboards and the technology behind them are designed to maximise data security. For example, individuals will always have control over who has access to their data and will be able to revoke access at any time. Only the Money and Pension Service and any qualifying pensions dashboard providers that meet the agreed standards and regulatory requirements will be able to connect to the dashboard infrastructure. The draft regulations will require occupational pension schemes to connect to a central digital architecture that is being developed by the pensions dashboard programme.

Once connected, schemes will be expected to respond to requests by members of the public to find and view their pensions information. To ensure these requirements are adhered to, the regulations will enable the Pensions Regulator to take enforcement action through penalty notices against trustees or managers who fail to comply. That could result in penalties for each breach of £5,000 for individuals or £50,000 if the person is a body corporate, including corporate trustees. This is where my Bill comes in.

Although pensions scheme members may be able to take civil action, nothing currently in legislation prohibits rogue trustees or managers from using a pension scheme’s assets to reimburse themselves to repay fines they incur for breaches of pensions dashboard legislation, which is backed by criminal sanction. This Bill makes changes to pensions legislation to increase protection for savers against the actions of such unscrupulous persons. In particular, it provides additional powers for criminal proceedings to be brought against trustees or managers of occupational pension schemes if they reimburse themselves from pension pots to pay penalties imposed for compliance breaches under the future pensions dashboard regulations. If a trustee or manager is found guilty of this offence, the provisions would allow for a maximum sentence of up to two years in prison or a fine or both.

I should make it clear to the House that this Bill does not impose any new costs or requirements on occupational pension schemes or their sponsoring employers. The intent is simply to deter rogue actors who have already received a financial penalty from the Pensions Regulator under the dashboards regulations from plundering savers’ pension pots to pay the penalty. It is also not something that anyone in the pensions industry should be unfamiliar with. The Bill amends existing legislation that provides for a similar prohibition in several other areas of pensions legislation, including automatic enrolment.

I am delighted that the Bill has the Government’s support, and I look forward to continuing to work with them to secure its passage. As I said at the start, this is an important measure that will safeguard the interests of pension savers from any would-be unscrupulous trustees. I hope we all agree that this Bill would provide worthwhile protection to all of our constituents with pension savings, and I hope that it will be supported on both sides of the House today.

--- Later in debate ---

[Mary Robinson]

With the leave of the House, Madam Deputy Speaker, I thank all Members for their contributions and for being present for this important debate. Let me begin my thanking my hon. Friend the Member for Broxtowe (Darren Henry), who rightly described the pensions dashboards as brilliant, and acknowledged their potential to enable people to find the various pension pots that they may have acquired during their working lives. So many people who have lost or forgotten pensions and simply do not know where to go will be helped by this groundbreaking legislation.

I thank the shadow Minister, the hon. Member for Westminster North (Ms Buck) for her support: she was right to recognise the importance of good, well-run pension schemes. I thank the Minister for his support, and I thank the DWP officials for their assistance in preparing the Bill and for helping me to present it to the House today.

As we move forward with the pensions dashboard, I am glad that we can also put in place the provisions that we will need to protect hard-working people and their savings. The Bill is intended to safeguard people’s pension savings, and I hope it will be able to progress with the support of the whole House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).

[Madam Deputy Speaker (Dame Eleanor Laing)]

I congratulate the hon. Member for Cheadle (Mary Robinson) on achieving a Second Reading for her excellent Bill.