Budget Resolutions

Torsten Bell Excerpts

Thursday 27th November 2025 Commons Chamber

[Sir Mel Stride]

That is absolutely true.

Let us look at how we ended up at this sorry pass. In opposition, Labour assured the British electorate that they would not be putting up taxes left, right and centre, and when they got into power, what did they do within a few short months? They slapped taxes—£40 billion-worth—on the British people, £25 billion of that by way of national insurance increases on business alone. It is no surprise that that destroyed employment and growth.

They talked down the economy. They came up with this confected £22 billion black hole. What an irony it was—[Interruption.] There may be chuntering from those on the Front Bench, but what an irony it was that it was at the behest of the Government themselves that the Office for Budget Responsibility was invited to look into this claim and said that it would not legitimise that figure. The damage was done. The animal spirits in the economy were extinguished.

Of course, they did something else that socialists down the ages always do: they borrowed and borrowed and borrowed and spent and spent and spent until they ran out of other people’s money—

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

Who did the borrowing?

[Sir Mel Stride]

The Minister is having trouble containing himself, such is the punishment that he is receiving at the moment. They borrowed all this money, and what did that do? It stoked inflation, and with inflation higher, interest rates have been higher for longer.

[Torsten Bell]

It is coming down.

[Sir Mel Stride]

The Minister says from a sedentary position that inflation is coming down. The International Monetary Fund says that inflation will be the highest in the G7 this year and next year.

We know that with high inflation, interest rates are higher for longer. That means businesses’ borrowing costs are higher. It means that consumer sentiment is dampened. It means that the servicing cost alone on the burgeoning debt that this Government are constantly adding to is currently £100 billion a year—twice what we spend on defence. In fact, if debt servicing were a Government Department, it would be the third largest in Whitehall—not spending money on better public services, as we are often told by the Labour party, but simply paying for the profligacy of the Labour party when it comes to borrowing.

The run-up to this Budget was a farce. We have seen weeks and weeks of uncertainty generated by the Treasury, which has leaked every possible combination of tax increases and then U-turned on some of them. It has flown so many kites that it has blotted out the sun, and a huge shadow has been cast across businesses, which have pressed pause on investment and hiring. The Parliamentary Secretary to the Treasury should speak to Andy Haldane, who concludes that what I am saying is absolutely right. It has also weighed down on consumer sentiment. All this hokey-cokey around what is in the Budget has done real damage to our economy on this Government’s watch.

[Sir Mel Stride]

My right hon. and gallant Friend is entirely right, as usual, and something else has also been going on. I have written to the OBR to ask Richard Hughes exactly what happened with the information that the Treasury appears to have leaked out about the forecasts during the run-up to the Budget. I say that in the knowledge that the OBR’s own guidance says that information exchanged with the Treasury during the build-up to a Budget is provided to Ministers in confidence. Why is it then that the Chancellor herself was on the airwaves before the Budget, opining on the apparent coming downgrade to productivity? I have written to the OBR to ask whether it feels that that was appropriate.

I have also written to the permanent secretary to the Treasury to ask if he is implementing an investigation into the leaks coming from the Treasury. Interestingly, he has written back to me simply to say that in the event that there are suspected leaks, of course there is an investigation. He has not quite answered my question as to whether there is an investigation being undertaken at the moment, but I will be following up with him on that matter.

What has happened in this Budget? The OBR forecasts tell a sorry story: unemployment is higher in every single year of the forecast than it was forecast to be back in the spring. Inflation is up—we have seen the latest figures from the Office for National Statistics. Labour is the party that talks about resolving poverty; it is a disgrace that food inflation in the last set of figures went up way above the headline rate, from 4.5% to 4.9%. That rise is being borne by some of the most vulnerable and some of the poorest in our society.

On growth, of course the Chancellor tells a good story. She says that the growth forecast is up compared with spring this year, but, as the Parliamentary Secretary to the Treasury will know, it is down compared with the autumn of last year, when the OBR said that growth would be 2% in this year; it is now forecast to be 1.5%. In in every subsequent year, growth is forecast to be lower than was forecast back at the time of the spring statement. That is the simple fact.

[Torsten Bell]

Why is that then?

[Sir Mel Stride]

We will come on to why that is the case momentarily.

What has happened to borrowing? One might have thought that the Government would have learned the lesson that ever-increasing borrowing always leads to disaster, but no: there is £11 billion of additional borrowing on average in every year of the forecast. What has that done to living standards? Real household disposable income—the economists’ measure of economic wellbeing —is down in every year of the forecast compared to the forecast in the spring.

The OBR says—the Parliamentary Secretary to the Treasury will like this one—that real income growth across this forecast will be well below the average of the last decade. So this Government should not point a finger at the last one when it comes to living standards.

--- Later in debate ---

[Dame Harriett Baldwin]

I am talking about yesterday’s Budget. The Chancellor herself announced that she was freezing the thresholds for a further three years, and I dare say that the hon. Gentleman will be asked to vote for that in the Aye Lobby next week. I disagree with him, because the Chancellor has just announced that the thresholds will be frozen for an additional three years.

Another person who will pay more tax as a result of the Chancellor’s decisions is a single young person on minimum wage. I do not know whether hon. Members have seen the emigration statistics that were published today, which show that hundreds of thousands of our young people are fleeing this country. That is something that we should all be very concerned about.

A single mother who has just received a lump sum in a divorce settlement will pay more tax as a result of yesterday’s Budget. A sole trader or entrepreneur who runs a business and perhaps pays themselves in dividends will pay more tax as a result of yesterday’s Budget. A driver in my rural constituency who needs to drive to go to work will pay more tax because of yesterday’s Budget. We can see that the choices made by the Chancellor punish the employers, the farmers, the family businesses, the workers, the savers, the pensioners and the drivers—everyone who tries to do the right thing and tries not to be a burden on the state.

I will leave the House with one final point.

[Torsten Bell]

Will the hon. Lady give way?

[Dame Harriett Baldwin]

I am looking forward to the Minister’s winding-up speech at the end of the debate, and I will not give way at the moment.

Given the skulduggery that the Treasury seems to have engaged in during the run-up to this Budget, the lingering impression will be that the spectre of further tax hikes looms. The floating of the income tax idea and all the other tax ideas, and all the taxes, will come back like a ghoul in Budgets to come.

--- Later in debate ---

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to close today’s debate, and I thank all Members for their contributions, including my hon. Friends the Members for North Warwickshire and Bedworth (Rachel Taylor), for Exeter (Steve Race), for South East Cornwall (Anna Gelderd), for Gower (Tonia Antoniazzi), for Norwich North (Alice Macdonald), for Newcastle upon Tyne East and Wallsend (Mary Glindon), for Newcastle-under-Lyme (Adam Jogee), for Newcastle upon Tyne Central and West (Dame Chi Onwurah), for Dunfermline and Dollar (Graeme Downie), for North Northumberland (David Smith), for Glasgow North (Martin Rhodes), for Mid Cheshire (Andrew Cooper), for Glenrothes and Mid Fife (Richard Baker), for Earley and Woodley (Yuan Yang), for Congleton (Sarah Russell) and for Calder Valley (Josh Fenton-Glynn), who all made strong cases for this Budget.

I listened carefully as Opposition MP after Opposition MP talked down the British economy, as the hon. Member for Huntingdon (Ben Obese-Jecty) did, talking down British workers and talking down British entrepreneurs. I have been trying to remember what it reminded me of. I was racking my brains, but then it came to me: they are just reading out exactly the same script that they had at exactly this time last year. The shadow Business Secretary, the hon. Member for Arundel and South Downs (Andrew Griffith), frothing with his usual excitement, claimed that Britain would spend 2025 in recession. He said:

“‘Could we be in recession?’ Yes we could.”

That was his forecast.

The actual figures are in, and the truth is that Britain in 2025 did not just avoid recession, but beat the forecast. The OBR has revised up growth this year from 1% to 1.5%. Let us look at wages. As my hon. Friend the Member for Erewash (Adam Thompson) said, wages are up in the forecast and, far more importantly, in people’s pay packets. Wages have gone up more in the first year of this Government than in the entire first decade of the last Conservative Government, and there is much more to do.

Changing Britain was always going to be hard, and we now know that the damage from the last decade of austerity and Brexit was worse than previously thought. That lies behind the productivity downgrade that the hon. Member for West Worcestershire (Dame Harriett Baldwin) rightly raised, but the question is how we respond to that news.

[Sir John Hayes]

I notice that the Minister is wearing a William Morris—or William Morris-esque—tie, and what Morris understood was the importance of craft and skills. The Government addressed apprenticeships in the Budget in a minor way, but does the Minister know that simultaneously the skills White Paper envisages downgrading apprenticeships by diluting the competencies they confer, thereby undermining their reputation with learners and employers?

--- Later in debate ---

[Torsten Bell]

What I know is that youth apprenticeships fell by 40% under the Conservative party. That is what failure looks like. I am coming on to some of those matters.

We do not want to grow this economy by simply borrowing more, as my hon. Friend the Member for Bolton West (Phil Brickell) rightly pointed out before he turned, at some length, to snails. There is nothing progressive about arguing that we should spend more than £1 in every £10 of taxpayers’ money on debt interest —money that would be better spent on schools and hospitals—so Liz Truss and the leader of the Greens should stay exactly where they belong and where they both started out: in the youth wing of the Liberal Democrats, far away from Government.

We in the Labour party will cut borrowing in every single year—more than in any other G7 country—and more than double the headroom against our fiscal rules. We are cutting borrowing and giving businesses the confidence to invest, and cutting inflation too. We are taking £150 off energy bills, freezing rail fares for the first time in 30 years—as my hon. Friend the Member for Burnley (Oliver Ryan) set out—and extending the fuel duty freeze. All this knocks 0.4% off inflation next year, helping interest rates—which have already been cut five times since the election—to keep on falling, helping businesses to expand and getting mortgages down.

What will not be coming down is public investment, which the OBR says boosts our economy. The pro-growth choice is not to return to the austerity of the past, as my hon. Friend the Member for Cannock Chase (Josh Newbury) set out. Austerity saw Tory Chancellors slash public investment, and repeatedly scrap and delay projects—the worst kind of short-term political fixes, with the worst kind of long-term economic consequences. This Budget presses ahead with an extra £120 billion of capital investment.

It is exactly because this Government are confident about Britain’s future that we are going to invest in it. Sizewell C is going ahead, and we are building the UK’s first small modular reactor at Wylfa—the biggest industrial investment in north Wales for a generation. We are also building the lower Thames crossing. Infrastructure is being built in every corner of Britain. The blockers and the pessimists, and the gloomsters and the doomsters, are being taken on, confronted and defeated. The Opposition parties have never seen a housing development or energy project that they did not want to block, but those days are done. Britain is getting back in the building business.

The Budget also contains necessary and fair choices on tax, which hon. Members have raised repeatedly. We have not hidden from that fact, nor am I hiding from the fact that we are asking everybody to contribute by further freezing tax thresholds towards the end of this Parliament. I hear the chuntering and the howls from the Conservatives, but where did this year’s frozen thresholds come from? Them. Who put in place next year’s freeze? Them. They announced threshold freezes, they defended threshold freezes, they voted for threshold freezes, and they cannot howl with outrage about them now. In case all of that is not clear enough to them, let me spell it out: of the revenue raised from frozen thresholds, over three quarters comes from the choices made on their watch. The difference between us and them is that we are not ducking the long-needed reforms that our tax system needs—reforms that mean we can keep the contribution from workers as low as possible.

We have already abolished non-dom status, raised capital gains tax and ended tax breaks for private schools. The Budget brings an end to the disgrace of someone in a terraced house in Blackpool paying more in council tax than someone in a £10 million mansion in Westminster—or what the shadow Chancellor called an ordinary family home. If he had had more time, I am sure he would have gone on to worry about people with an ordinary family deer park, duck pond and stables.

[Sarah Olney]

Will the Minister give way?

[Torsten Bell]

I will come to the hon. Lady in a second, because she and the hon. Member for St Albans (Daisy Cooper) told us that the Liberal Democrats wanted wealth taxes, while continuing their record run of opposing every single wealth tax put in front of them, and conveniently forgetting that the Liberal Democrats tried and failed to introduce just such a wealth tax in government —a level of convenient amnesia matched only by the hon. Member for Clacton (Nigel Farage) when reminiscing about his school days.

[Sarah Olney]

Because the Minister was maintaining his own running commentary throughout my speech, he probably missed me making the point that, although he keeps saying that this is equalising council tax between poorer areas and richer areas, he must admit that it in fact does nothing of the sort. When people owning £2 million houses in Putney pay their £2,500 levy on top of their council tax, they will still only be paying the same amount of council tax as people living in the lowest band of properties in my constituency. There are arguments to be had about the mansion tax, but can he stop saying that it equalises council tax rates in different parts of the country, because it does nothing of the sort?

[Torsten Bell]

I did not say anything of the sort. I said that we are not going to have a £10 million mansion in Westminster paying less tax than a terraced house in Blackpool, and that has been brought to an end by this Budget.

I have heard the worries of some Opposition Members about the surcharge, and I want to assure the House that less than 1% of properties will be affected, and even for the £10 million mansion I have mentioned, it will not exceed £7,500 a year. To put that in perspective, it is not even enough to bribe a Russian-sympathising, Putin-praising Reform politician—or a traitor, as we should always call them.

Other reforms in the Budget will ensure that everyone who drives on our roads helps to maintain them. It will address the fact that tenants pay higher taxes than their landlords and tackle some of the tax breaks that have exploded in recent years, disproportionately benefiting the wealthy. That is the fair thing to do, and it is the responsible thing to do.

I know that others want to take a different approach, and I heard representations from some to raise income tax. Who was particularly keen? The shadow Chancellor. He told eager listeners—[Interruption.] I think he should listen. He told eager listeners at the Conservative party conference that he would “go for income tax”. In fact, he was more enthusiastic than that, going on to label it the best “thing to do”. We have not taken his advice, and are instead delivering major reforms—reforms ducked by Tory Chancellor after Tory Chancellor.

We have heard a lot about welfare today, and I recognise why. It is because our welfare system is failing, and we are changing it. We are undoing the huge incentive to be labelled too sick to work that the Conservative party built into universal credit, and the OBR has confirmed that this will move tens of thousands more people into work. The shadow Chancellor claimed he had a plan to reform welfare, but he did not mention that it was quashed by the courts. What he actually did as Secretary of State for Work and Pensions was to oversee the subsidised leasing of luxury cars, with the ordinary taxpayer bearing the cost of tax breaks for Mercedes and BMWs on the Motability scheme. Well, those days are done. The scheme has itself removed luxury cars, and it has committed to half of its cars being built in Britain. We are reforming its tax breaks to save over £1 billion in the coming year.

[Ben Obese-Jecty]

Will the Minister give way?

[Torsten Bell]

I am afraid that I do not have time to give way.

The last Government cancelled face-to-face assessments for health benefits; this Government are bringing them back. The last Government also oversaw a scandal that has received far too little attention. They allowed people who came to Britain for just a few years—people who left, and never had any intention of returning—not only to buy a state pension, but to buy it on the cheap. The Conservative Government did not just waste money here at home; they wasted it across Canada, Australia and New Zealand, and we are bringing this overseas pension scandal to a close.

What this Government will never do is pretend that the Tory policy of making children poor does anything other than cost us all in the long run. Child poverty costs this country £40 billion a year. A child growing up in poverty is less likely to be in work as an adult, and they earn 25% less at age 30. We tackle child poverty not only because it is a moral imperative, as was laid out by my hon. Friends the Members for Rochdale (Paul Waugh) and for Camborne and Redruth (Perran Moon), but because it is an economic one. This Government will scrap the two-child limit, we will lift over half a million children out of poverty and we will deliver the biggest fall in child poverty of any Parliament on record.

Everyone can see what the Conservatives are trying to do. They cannot defend their record, and we all know why. They have nothing to say about Britain’s future, as the Leader of the Opposition made patently clear yesterday, and now they are salivating at the prospect of trying to hide their total lack of policy behind the cheap, divisive, lazy politics of talking about “Benefits Street”. Well, bring it on, because this Budget is for every street, with potholes being filled, neighbourhood police back on the streets and an NHS that is actually there when we need it. It is a Budget for every street in cutting borrowing because that helps not just mortgage payers, but employers; it is a Budget for every street in cutting energy bills because the cost of living crisis has seeped into everyone’s homes—rich and poor, north and south; and it is a Budget for every street because child poverty exists in every part of Britain, limiting life chances, wasting talents and undermining not just some childhoods, but all of them. With borrowing down, energy bills cut and public services rebuilt, this is a Budget for every street in Britain.

Ordered, That the debate be now adjourned.—(Gregor Poynton.)

Debate to be resumed on Monday 1 December.

Pension Investment in UK Equities

Torsten Bell Excerpts

Tuesday 25th November 2025 Westminster Hall

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to serve under your chairship, Mr Stringer. I will indeed leave several minutes for the winding-up speech. Like everyone else, I begin by congratulating the right hon. Member for Salisbury (John Glen) on securing this debate, particularly on the Budget eve; it is very kind of him to make my diary relaxed. It is a topic on which he has thought deeply and that we have discussed many times. As ever, I welcome his constructive and practical approach, which befits someone who confirmed to me earlier that he holds the title of longest-serving Economic Secretary to the Treasury. Luckily, he was not on performance-related pay, given the growth of the economy during that time.

[John Glen]

I was not paid during that time.

[Torsten Bell]

He may not have been paid at all. His focus at the beginning of his remarks on growth and one of its key enablers, investment, was right. If we stepped back and forced ourselves to ask, “What is the one thing the British economy needs more of?”, it would be public and private investment. As several hon. Members have said, the UK has the second largest pension scheme in the world, worth £2 trillion. It is our largest source of domestic capital, underpinning not just the retirement we all—or at least most of us—look forward to, but the investment on which our future prosperity depends.

That is why this Government launched and concluded a review of pensions investment within a year of taking office. Those reforms are now being taken forward through the Pension Schemes Bill, as the hon. Member for South West Devon (Rebecca Smith) pointed out. First and foremost, the Bill includes measures to deliver bigger and better pension schemes in the DC market. It requires multi-employer defined contribution pension providers to hold at least £25 billion in assets by 2030 or to be on track to do so by 2035.

That requirement will drive scale and sophistication in workplace DC schemes so that they are better positioned to invest in a fuller range of asset classes, including specialist private markets such as venture capital, which we have not heard much about today but which are key. The biggest gap in UK capital markets is growth finance: the gap that holds back our science and tech start-ups, scale ups and pre-initial public offering companies. That does not take away from the challenges we are raising about public markets, but if we look at our capital markets as a whole, that is our biggest gap.

Pensions can be a key source of funding for those economically critical investments and sectors, which my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) set out, as he has done many times in the discussions on the Pension Schemes Bill. This is not just theoretical; it is actually starting to happen. Legal & General is investing in post-quantum cryptography and Nest is investing in energy generation. Last week, the Chancellor and I met with Aegon UK, NatWest Cushion and M&G, which have all confirmed that they will invest £200 million in the British Growth Partnership, a fund managed by the British Business Bank investing in cutting edge British businesses and building on British strengths in areas such as clean energy, advanced manufacturing and the medical technology that other Members have talked about in the past.

As we have heard, Members are well aware of the Mansion House accord, a voluntary commitment by 17 major DC funds to invest 10% of their main default funds in private assets by 2030, including 5% in UK private assets. That will boost investment across a range of asset classes, including growth market equities, which we have not touched on much today. That is welcome news driven by a focus on giving savers better returns and showing how pension funds can contribute directly to making Britain the best place to start up, scale up and ultimately list companies. I should emphasise that we should think about our capital markets as a ladder up which firms can climb. Our job is to make that climb easier, not just to focus on the ultimate destination.

Several Members raised the question of transparency. The Pension Schemes Bill includes a new framework under which DC funds will need to disclose their investments in more granular detail, including UK-overseas and asset class split. We will be able to see in more detail what individual schemes are doing. We are doing that so that we can measure their value for money. For the first time, we will be able to see where those funds are invested.

Finally, as Members know, the Bill includes a reserve power, which has been discussed today, to ensure that the change that the pension schemes themselves say is needed in the interest of members happens. I will repeat what I said on the “Making Money” podcast—it is very exciting that the hon. Member for South West Devon had time to tune in. I am confident that this power will not need to be used, given the progress the industry is already making. It is designed as a proportionate backstop to the commitments that the industry has already made, with strong safeguards to protect the interests of pension savers.

On mandation, I note—as gently as possible, given the excellent tone of this discussion—that I have spent much of the last six months hearing strong opposition to any mandation backstop while hearing, often from the very same people, language that does not directly contradict that, but gets close to calling for mandation, whether it is social housing, public equities or anything else. I just gently note that tension before as gently moving on to set out some of the wider steps that the Government are taking to support our capital markets, because they go far beyond pensions. It is important to note that although UK equity markets have faced some challenges in recent years, London’s markets remain some of the deepest and most liquid in the world. We want to build on those strong foundations and make the UK as attractive a destination as possible for companies to start, scale and stay. There is a danger here: we need to make sure we are having this discussion about the change we need to see, while also celebrating many of the real strengths that exist in London’s capital markets.

[Richard Tice]

Is the Minister aware that the quantity of listings on the London stock market has collapsed by about 80% in the last decade, and that the number of companies listed on AIM—the alternative investment market, which was the original growth market 40 years ago—has fallen to a 25-year low, so something fundamental is going wrong with our listed markets?

[Torsten Bell]

I am. I will just gently say that many people, when discussing the reasons for that, point to a policy of Brexit delivered without any ideas about how it should be delivered in a smaller, home market and without any plans for the future. I would probably pause on that before I started offering anyone views on anything at all.

My Treasury colleagues have already delivered an ambitious programme of reforms: modernising UK listing rules; establishing the private intermittent securities and capital exchange system—PISCES—to support private companies to scale and grow as a stepping-stone to public markets; and making it easier to raise capital and IPO in the UK with new prospectus rules from January of next year. To come directly and more fairly to the question that the hon. Member for Boston and Skegness (Richard Tice) raised, I think it is important to celebrate the fact that we have seen some of that translate into positive momentum recently. Hon. Members will know that the stock exchange has had a very strong year, outperforming most of the rest of the world. We saw listings from Fermi America and Shawbrook last month, and there are other exciting companies in the pipeline. I now regularly see my hon. and learned Friend the Economic Secretary to the Treasury in confetti-filled photographs from the stock exchange, and I look forward to seeing many more in the years to come. I encourage hon. Members to go and engage in similar activities.

Our capital markets are not just about celebration and ceremony; they are critical in connecting retail investors’ capital with businesses in the way that several hon. Members mentioned. Investing offers a powerful way for people to make their money work harder and share in growth. That is why the Government are bringing forward measures to get Britain investing again.

The right hon. Member for North West Hampshire (Kit Malthouse) raised a point, which I have heard him discuss before, about risk appetite and the incentives that people have. I would say that if we look at the evidence from the last 25 years, we see that it is not the strength of the incentive that is the issue. Many people holding cash ISAs would have made very significant returns if they had held that in equities instead. I will give an example. If someone, each year since the introduction of ISAs, had put £1,000 into an equity ISA rather than a cash ISA, they would be £50,000 better off. The issue is not purely about incentives, and I think focusing there would miss some of the wider changes we have been seeing, but I am always eager to hear about what more can be done.

What we are doing is working closely with the FCA and rolling out a scheme of targeted support ahead of ISA season next year. That will represent the biggest reform of the financial advice and guidance landscape—mentioned by the hon. Member for South West Devon—in more than a generation. It will revolutionise the support that consumers can receive to invest.

[Kit Malthouse]

I get the example that the Minister talks about, but I think he misunderstands or perhaps misappreciates how the retail investor thinks. They do not necessarily think, “If I put £1,000 in now, in 20 years’ time it will be worth this.” They think, “If I put £1,000 in now, what is my return going to be next year? What is my running return going to be?” And it will be a percentage return on the dividend. That is why we have a P/E—price-to-earnings—ratio for every share; that is what investors look at. If that is impaired because of taxation and the return is reduced, as it has been over the last few years, they will be less inclined to invest. That, fundamentally, is the pattern that we have seen. The Minister never says this, but in the end, people invest in listed stocks and shares, whether through their pension or otherwise, to make money. They are not doing it for the good of anybody else. They are doing it to make money, and if they are going to make less money, or the perception is that they will make less money, because of Government taxation, they will do less of it. Would he not agree?

[Torsten Bell]

I am not sure that I fully understood, so I am not going to commit to agreeing. Remember that the capital gains on shares in equity ISAs—investment ISAs—receive tax relief in their entirety, so the tax is not the problem in terms of people’s rates of return; the returns would have been very real indeed over, for example, that 25-year period. However, my basic argument is that we need better advice, and that our targeted changes will make it possible for financial firms to offer that.

We are also supporting an industry initiative to rebalance risk warnings to ensure that firms are offering consumers information about investing, not trying to scare them off with over-the-top warnings. Together, these measures will support savers in securing stronger returns over the long term because, as the right hon. Member for North West Hampshire just said, this is about making money for savers—whether in pension savings or elsewhere—putting money into people’s pockets and further strengthening our world-leading capital markets.

I will make one more substantive point and then conclude. This is not just about capital. In the end, the growth agenda, and needing the investment to make it happen, is about actual investment not just financial flows. Financial flows are an enabler of the investment that ultimately matters to the size of the capital stock, the quality of the infrastructure, the quality of the firms, and the amount of capital that workers have to work with. That is, in the end, what matters, and it means firms wanting to grow, which is why I focused slightly more in my remarks on the whole chain of firms’ access to capital.

This is also about being able to get out and actually get things built. I gently remind Members, when I hear them opposing anything getting built, anywhere, by anyone, at any time—I definitely hear the Lib Dem Front Bench opposing—[Interruption.] I am not talking about the hon. Member for Torbay (Steve Darling), but the Lib Dems have never seen a house that they wanted to be built. That is my lived experience of sitting in the Chamber day after day. We need to actually get things built, and as I said, I agree with the hon. Member for Carshalton and Wallington (Bobby Dean) on the pipeline of investment. That is ultimately what we need if we want growth to happen; it cannot just be about changing the flows of existing assets.

I once again thank the right hon. Member for Salisbury for securing today’s debate. A strong pensions industry and thriving capital markets are cornerstones of our capitalism, as I think everybody in this Chamber agrees. We are introducing significant reforms of both the capital markets and the pensions industry, and I am grateful to have had the chance to discuss them this afternoon.

Draft Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025

Torsten Bell Excerpts

Monday 24th November 2025 General Committees

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

I beg to move,

That the Committee has considered the draft Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.

That should encourage enthusiasm from everyone. The primary purpose of the draft regulations is to extend the legal framework for collective money purchase schemes, commonly known as collective defined contribution schemes, to allow multiple unconnected employers to participate. Until now, CDC schemes have been restricted to single employers or connected employers.

Significant progress has been made in getting more people saving, not least under the previous Conservative Government. We now have 23 million people saving into a workplace pension, but the job is not finished. Currently, pension contributions in defined contribution schemes are going into a savings pot, not a pension, leaving them exposed to the twin challenges of adequacy and risk. The Government believe that CDC schemes have an integral role in helping us address these challenges.

The statutory instrument puts in place a number of key measures to ensure that unconnected multiple employer CDC schemes deliver for members. Part 2 of the statutory instrument amends the Pension Schemes Act 2021—we will be hearing more about that—to allow for unconnected multiple employer schemes and to broaden the range of organisations that can set up a CDC scheme. To become authorised, a scheme needs to satisfy the Pensions Regulator that it meets the authorisation criteria, which are listed in section 9(3) of the 2021 Act. Part 2 of the statutory instrument amends that Act to create additional authorisation criteria specifically for unconnected multiple employer collective money purchase schemes.

We have identified persons who we consider will have an important role in such schemes, and we have brought these people within the scope of the fit and proper persons test, so that they are subject to appropriate scrutiny. It is imperative that our regulations clearly establish who is responsible for a scheme’s business strategy and financial sustainability, and that it is evidenced to the regulator at authorisation. Regulation 10 therefore amends the 2021 Act to require that an unconnected multiple employer CDC scheme has a single scheme proprietor that meets specific criteria and requirements. Regulation 10 also inserts a requirement for the scheme proprietor to prepare, maintain and submit a business plan to the regulator.

The new legislative framework will permit schemes that intend to operate on a commercial basis. To mitigate the risks of schemes overpromising to gain a commercial advantage or mis-selling, we are introducing a promotion or marketing authorisation criterion. The requirement is that no person has carried out promotion or marketing of a scheme that is unclear or misleading without rectification, and that the scheme has adequate systems and processes for ensuring that promotion or marketing is clear and not misleading.

We want trustees of these schemes to focus entirely on the interests of scheme members, and to have complete autonomy to do so. A trustee also acting as a person who promotes or markets the scheme, or as the chief financial officer for the scheme, detracts from this responsibility and creates a clear conflict of interest. Regulation 5 of the statutory instrument amends the 2021 Act to make a separation of these roles an authorisation criterion.

It is the Government’s intention that running an unconnected multiple employer CDC scheme as a closed scheme should always be an option open to trustees, where it is viable to do so and to the extent that it is permitted under wider pensions legislation. Regulation 5 therefore inserts a new authorisation criterion into the 2021 Act to ensure that trustees can choose this option, if appropriate. To deter speculators, part 2 also imposes a mandatory deadline of 24 months from authorisation, by which an authorised unconnected multiple-employer CDC scheme must start being operated—it cannot sit there in abeyance.

Part 3 of the statutory instrument supplements the meaning of “connected” in section 49(2)(a) of the 2021 Act—one of the better sections. This term is relevant for determining whether a collective money purchase scheme is a single and connected employer scheme or an unconnected multiple-employer scheme, and therefore which of the two legislatives frameworks applies to it. Part 4, including schedules 1 to 6, implements the new authorisation and supervisory regime for unconnected multiple employer collective money purchase schemes under part 1 of the 2021 Act. It includes regulations on the application for authorisation, scheme design, financial sustainability, the valuation and adjustment process essential to calculating benefits, and the supervisory regime, both at set up and on an ongoing basis. The new regime will continue to place strong emphasis on regulatory oversight. The Pensions Regulator is empowered to issue risk notices, approve and enforce continuity strategies and, ultimately, withdraw authorisation where schemes fail to meet the required standards.

Part 5 of the instrument contains amendments to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022, introduced under the last Conservative Government, to ensure that certain aspects of the single or connected employer collective money purchase schemes regime are aligned with this new regime. Part 6 and schedule 7 make consequential amendments to other relevant primary and secondary legislation.

Unconnected multiple employer CDC schemes are a welcome addition to the UK pensions landscape, as are CDC schemes more generally, as they have come forward on the basis of cross-party consensus over the past few years. When well designed and well run, which this instrument will ensure, they can help boost retirement incomes and benefit the wider economy. I comment the instrument to the Committee.

--- Later in debate ---

[Torsten Bell]

I thank the hon. Members for Wyre Forest and for Horsham for their consensual approach and the clarity of their support for what is a development of CDC schemes that has had good cross-party support. Communications are very important. The truth is that they are important in all pension schemes—particularly within CDC schemes because they are new, and because there is some complexity sitting behind them. That is why we take this particularly seriously.

In response to the questions raised by the hon. Member for Horsham, the regulators will be looking at the overall approach to communication. They are not signing off the individual bits at the initial authorisation. As I said in my opening remarks, the authorisation is not a “one and done”. There will be ongoing monitoring of that. Specifically on communications, for multi employer CDC schemes, the marketing in general will be to employers, not to individuals. That may help allay some concerns about how that is communicated. But even within that, we will definitely want clarity, particularly to savers, about the honesty of what the offer is—this is not a DB scheme; it is not a certain guaranteed income. It is one that is aiming for a target amount, and there can be some fluctuation around that. It is important that we are honest and straight about that, and that those of us who support these schemes are also clear about what they are and are not offering.

The pension landscape does need to change—we all agree about that. Fundamentally, we need to move from having savings pots to delivering actual pensions. CDCs are one of the ways—there are others—in which we can make progress on that. I therefore commend this instrument to the Committee.

Question put and agreed to.

Fund Advance for Cash Paid in to Social Fund: Contingencies

Torsten Bell Excerpts

Wednesday 12th November 2025 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

I would like to notify the House that the Department for Work and Pensions has obtained approval for an advance from the Contingencies Fund of £1,610,000,000

The voted cash requirement for cash to be paid into the social fund exceeds that provided for in the main estimate 2025-26 due to changes to eligibility in the Social Fund Winter Fuel Payments Regulations 2025.

The Contingencies Fund advance is required to enable payments into the social fund to meet obligations until the supplementary estimate receives Royal Assent.

Parliamentary approval for additional resources of £1,610,000,000 will be sought in a supplementary estimate for the Department for Work and Pensions. Pending that approval, urgent expenditure estimated at £1,610,000,000 will be met by repayable cash advances from the Contingencies Fund.

The advance will be repaid at the earliest opportunity following Royal Assent of the Supply and Appropriation (Anticipation and Adjustments) Act 2026.

[HCWS1047]

Annually Managed Expenditure Budgets Increase

Torsten Bell Excerpts

Wednesday 12th November 2025 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

I would like to notify the House that the Department for Work and Pensions has obtained approval from His Majesty’s Treasury for an increase of £1,610,000,000 to non-voted AME—annually managed expenditure—budgets and the total AME budget control, to fund increases to the winter fuel payment in line with the Social Fund Winter Fuel Payment Regulations 2025.

[HCWS1048]

Oral Answers to Questions

Torsten Bell Excerpts

Monday 27th October 2025 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

16. What steps he is taking to help tackle the potential impact of the lack of indexation on pre-1997 pensionable service in defined benefit pension schemes on people affected.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

I obviously recognise the challenges facing those without inflation protection, particularly after the cost of living pressures of recent years, and I think that recognition is shared by Members on both sides of the House. I met a cross-party group of MPs earlier this year to discuss exactly this issue. Reforms in the Pension Schemes Bill give trustees more flexibility to share surpluses in their DB pension schemes with employers, and to negotiate for members to benefit from any such sharing of surpluses. That could include discretionary increases to address the issue raised by my hon. Friend the Member for Llanelli (Dame Nia Griffith).

[Dame Nia Griffith]

As a result of the efforts of pensioner associations, we know that there have been unintended consequences of the Pensions Act 1995, which made it legal to stop payment of indexation to the pre-1997 pensioners of successful multinationals such as 3M and Hewlett Packard Enterprise, who, having been recruited with the promise of index-linked pensions, are now suffering hardship. Their pensions have already been frozen for at least 15 years, despite healthy funds and trustees’ pleas. What will the Minister do to stop this dishonourable practice, so that these companies deliver the financial security that they promised?

[Torsten Bell]

I absolutely recognise the issue that my hon. Friend has raised: any of us in that situation would want those pension increases to continue. She is aware of the legal background, but I should point out that scheme rules govern when inflation-linked increases can be paid. They are not changed retrospectively, but the Pensions Regulator has spelt out that trustees should consider those who are not receiving inflation-linked increases when making their decisions, and should also consider the history of making such awards—particularly in some of the examples that my hon. Friend has given. As I have said, I think that the provisions in the Pension Scheme Bill give trustees more power to argue for those increases.

[Helen Morgan]

I have been contacted by a constituent who, along with her husband, worked for Hewlett Packard. They accrued their pensions before 1997, and now, along with about 50,000 members of the Pre-97 Alliance, they are facing real financial hardship. In 10 years’ time, their pensions will be pretty much worthless. Will the Minister not consider legislating to ensure that these people are not left in poverty, having been promised proper pensions when they started work for the companies concerned?

[Torsten Bell]

The hon. Lady has mentioned a specific company, although a small number of others are in the same position. I am sure that not only the people running that company but the trustees will have heard the powerful case made by Members on both sides of the House. These decisions must be made in line with the scheme rules, but no one wants savers to see the value of their pensions fall over time, and I hope that employers will take the case being made in the Chamber seriously.

--- Later in debate ---

[Iqbal Mohamed (Dewsbury and Batley) (Ind)]

I welcome the Secretary of State to his place and wish him well. Last week, I attended a drop-in for the Women Against State Pension Inequality Campaign where I was informed that there are currently 4,320 women in Dewsbury and Batley affected by the WASPI scandal. That number was previously higher, but many of the women have already passed away without justice. On 27 July I wrote to the former Secretary of State regarding her support for the WASPI campaign after being contacted by more than 40 of my constituents, but I have yet to receive a response. With the Government still refusing to engage in civil mediation to deliver justice to the WASPI women, will the new Secretary of State reconsider meeting campaigners to find a just way forward?

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

The previous Minister for Pensions met representatives of the WASPI campaign in order to hear directly from them about their experiences. She was the first Minister to do so in eight years. I will look into the details of the letter the hon. Gentleman mentions.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

I welcome the Secretary of State to his office and thank the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stretford and Urmston (Andrew Western), for a recent visit to the DWP debt and fraud centre in my constituency. There are 95 jobs at the centre doing tremendous work across the UK, proving that civil service job dispersal does work. Is this not a template for other Departments and an example to the SNP Government in Scotland, who have dispersed no jobs, no power and no funds from Edinburgh?

[Rachel Gilmour (Tiverton and Minehead) (LD)]

I have met many pensionable-age constituents, most of whom live on the Duck estate, who have lost their entitlement to pension credit because of as little as 50p. Does the Minister agree that pension credit, the employment and support allowance and PIP assistance could all do with more common sense and a little less of a “computer says no” mentality?

[Torsten Bell]

I thank the hon. Lady for her question. In general, lots of life could do with less “computer says no”, so on that basis we will agree. On the specifics of the question she raises about pension credit, the nature of the system is obviously that it provides a guaranteed level of income; it is not setting out an entitlement like universal credit, so there does have to be a limit somewhere, and I am afraid that that does mean that some people will always be on one side of it. What we do not want to see in a system is too many things in that winner-takes-all perspective—I take the point she raises.

[Leigh Ingham (Stafford) (Lab)]

I recently visited Drake Hall women’s prison in my constituency of Stafford, Eccleshall and the villages, which has the brilliant initiative of a Halfords training centre to support people into employment once they leave the prison estate. It supports people all over the country, not just in my constituency. Can the Secretary of State tell me what conversations are happening with the Ministry of Justice about supporting or expanding schemes like that?

[Ben Obese-Jecty (Huntingdon) (Con)]

Alan Marnes is a constituent of mine in Southoe who has staunchly campaigned since 2002 on the issue of the lack of indexation for pre-1997 pension rights, having been one of 140,000 people who lost their occupational pension. I wrote to the Secretary of State more than two months ago asking whether the newly revived Pensions Commission will address the issue of failed pension funds and I have still not received a response. Will the Secretary of State agree to meet me and Alan to provide some much-needed clarity on such a long-standing issue?

[Torsten Bell]

I am not absolutely clear whether the particular case that the hon. Gentleman is raising relates to people within the Pension Protection Fund and the financial assistance scheme or to a pre-1997 indexation within a solvent pension scheme, but if he writes to me with the details I will absolutely make sure that I come back to him.

[Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)]

One in three children in my constituency is growing up in poverty. With the Budget approaching, what discussions has the Secretary of State had with the Chancellor of the Exchequer about scrapping the two-child limit—a policy widely recognised as one of the biggest drivers of child poverty in Britain today?

Work and Pensions

Torsten Bell Excerpts

Monday 27th October 2025 Written Corrections

The following extracts are from the Pension Schemes Bill Committee on 11 September 2025.

[Torsten Bell]

The clause amends the onboarding conditions in these instances, to allow trustees of a scheme in PPF assessment to seek to secure their liabilities with a superfund at less than full benefits, but more than would otherwise have been secured through a buy-out that was available, given the level of their assets at that point. Based on the evidence from the PPF’s purple book, we anticipate that, on average, five in 10 so-called PPF-plus schemes could benefit each year.

[Official Report, Pension Schemes Public Bill Committee, 11 September 2025; c. 282.]

Written correction submitted by the Under-Secretary of State for Work and Pensions, the hon. Member for Swansea West (Torsten Bell):

[Torsten Bell]

Based on the evidence from the PPF’s purple book, we anticipate that five to 10 so-called PPF-plus schemes on average each year could benefit.

[Torsten Bell]

Several hon. Members have said, absolutely rightly, that access to financial advice fell in the aftermath of the reforms over a decade ago, but there is some better news on Pension Wise. The 2024 Financial Lives survey showed that of those who accessed a defined-contribution pot within the last four years, 40% had accessed Pension Wise. I think that is probably more than most hon. Members in this debate would expect, though it may not be enough. However, those people had used Pension Wise when heading towards access; they had not used it as a mid-life MOT product, which is a different thing. That 40% was up from 34% in 2020, so some things have gone in the right direction. I am gently noting that, not claiming any credit for it because it predates the election. There is a lot of overlap between what those systems of advice are providing and the measures in new clause 1.

[Official Report, Pension Schemes Public Bill Committee, 11 September 2025; c. 323.]

Written correction submitted by the Under-Secretary of State for Work and Pensions, the hon. Member for Swansea West (Torsten Bell):

[Torsten Bell]

There is a lot of overlap between what those systems of guidance are providing and the measures in new clause 1.

Pension Schemes Bill (Seventh sitting)

Torsten Bell Excerpts

Committee stage
Thursday 11th September 2025 Public Bill Committees

[The Chair]

With this it will be convenient to discuss clauses 52 to 56 stand part.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

It is a pleasure to serve under you today, Ms Lewell. As we come to the first clauses dealing with superfunds, I start by setting out the background. Superfunds provide a route for employers to secure the liabilities of closed defined-benefit schemes that are unable to afford insurance buy-out. Their purpose is to better protect members from potential losses in the event of employer insolvency, and to release employers to focus on and invest in their core business, helping to drive economic growth. Superfunds already operate within the framework of pensions legislation and the interim guidance issued by the Pensions Regulator. That interim regime has enabled us to learn what works well, but it is now time to put the regulatory framework for superfunds on a permanent footing.

Clause 51 provides an overview of part 3 of the Bill and sets out the structure and content of the legislative framework for superfunds. Clause 52 defines a superfund scheme as a

“trust-based occupational pension scheme”

that is

“not supported by a substantive employer covenant”

but by a “capital buffer” made of private capital instead. Clause 53 sets out that superfund sections are to be treated as separate schemes, meaning that any potential failure would be contained within that section. Clause 54 prohibits unauthorised superfund activities.

Clause 55 allows the Pensions Regulator to authorise superfunds if it is satisfied that they are likely to meet the ongoing requirements set out in chapters 4 and 5 of the Bill. It will enable the regulator to assess the superfund’s organisation, staff, plans, policies and procedures to ensure that it has robust governance and continuity arrangements. Clause 56 makes it clear that the Pensions Regulator must make an authorisation decision within six months of receiving a completed application, with the potential to extend that period by up to three months. The new legislative regime will protect scheme members and enhance the confidence of stakeholders and market participants.

[Mark Garnier (Wyre Forest) (Con)]

The Opposition support the clauses and welcome the action to legislate formally for defined-benefit superfunds. Securing this in a legislative framework will give trustees and sponsors greater confidence when considering this new consolidation option for defined-benefit schemes. The measures build on the consultation conducted under the previous Government, as well as the intention that the former Chancellor of the Exchequer, my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt), laid out in his 2023 Mansion House speech.

Superfunds are capital-backed consolidators that allow defined-benefit schemes to shift liabilities away from the sponsoring employer, thereby enhancing the security of members’ benefits. By transferring pension obligations to a superfund, companies can reduce long-term liabilities and refocus on core operations, while maintaining strong protection for retirees. Superfunds offer a new endgame strategy for DB schemes unable to secure an insurance buy-out, helping to safeguard member benefits in underfunded or marginal schemes. These measures all seem reasonable, and as I said, this work started under the previous Government, so we wholeheartedly support it.

Question put and agreed to.

Clause 51 accordingly ordered to stand part of the Bill.

Clauses 52 to 56 ordered to stand part of the Bill.

Clause 57

Prohibition of unapproved superfund transfers

Question proposed, That the clause stand part of the Bill.

[Torsten Bell]

Chapter 3 sets out the criteria for approving superfund transfers. The clause protects the integrity of the superfund regime that we are aiming to put in place through the Bill by making it clear that the penalty for committing an unauthorised superfund transfer may be a fine, imprisonment for up to two years, or both. I commend the clause to the Committee.

Question put and agreed to.

Clause 57 accordingly ordered to stand part of the Bill.

Clause 58

Approval of superfund transfers

[John Milne (Horsham) (LD)]

I beg to move amendment 268, in clause 58, page 67, line 34, leave out subsection (a) and insert—

“(a) that, as at the date of the application, the financial position of the ceding scheme is—

(i) not strong enough to enable the trustees to arrange an insurer buy-out, or

(ii) not affordable for the next 36 months following an assessment, certified by the scheme actuary, of all funding options to become strong enough;”.

This amendment expands the onboarding condition to give an alternative to a single day snapshot of a scheme’s funding position.

The Bill tests a scheme’s funding position on a single snapshot day. We feel that is too rigid and could unfairly exclude schemes. A scheme might just miss the mark on that day, even though funding prospects over the next three years are realistic and affordable. The amendment would allow actuaries to certify affordability over a 36-month horizon, providing a fairer and more flexible test. It would protect members by ensuring viable schemes are not shut out, while still requiring strong actuarial oversight. That is especially important in an environment where economic conditions and markets can move significantly and take scheme funding positions with them.

Schemes have not always enjoyed the present funding levels, and today’s surplus is tomorrow’s deficit. We should have regard to that fact and approach the legislation in a manner that reflects it. In the assessment over a longer time period, the trustees would also be able to consider and respond to the situation in relation to dividends, changing investment strategies and expected scheme contributions, among other key factors. In summary, the purpose of the amendment is not to block the superfund option for schemes, but rather to ensure that the legislative framework is set squarely on the basis of protecting DB scheme member benefits and the security and soundness of the pensions system.

[Kirsty Blackman (Aberdeen North) (SNP)]

We have discussed other parts of the regime—for example, new entrants and their ability to scale up, and the longer-term prospects for that—which were perhaps a bit more flexible than this part. Although I am not entirely convinced that the exact wording of the amendment provides the best way to go about it, if the Minister gives some reassurance and a commitment to consider the possibility of not just taking a snapshot day, and to look at the potential ability to scale up or grow, I would be more comfortable with the legislation than I am currently.

[Torsten Bell]

I thank the hon. Members for Torbay and for Horsham for the amendment. It is sensible to discuss one of the key questions in the design of superfunds policy. My main reassurance is that this exact option, or options in this space, were part of the extensive consultation on superfunds. That is important to understand. They were in the consultation, and a wide range of views were expressed in the responses, many of them pointing to the clear practical difficulties of providing the legislative test to assess whether a scheme could afford an insurance buy-out in future, as opposed to its exact position at the time of the assessment.

For reasons I will come on to, that does not mean that it is not important to look ahead to whether a scheme is likely to be able to buy out in the future, but we have taken the view, following the consultation, that that should not be the test on the face of the Bill. That is because, when it comes to projections looking ahead, both the cost of an insurance buy-out and the scheme funding levels can fluctuate significantly. Forecasts ask for more judgment to be exercised compared with an assessment of what the buy-out market is offering at the time it is carried out. It is about the current funding levels. Clause 58 already states that schemes can transfer a superfund only when they are currently unable to secure members’ benefits with an insurer.

I will offer two elements of reassurance to the hon. Member for Horsham. First, we need to be clear about the role of the legislation, which is as I just set out, and the role of the trustees, who are the ones who would approve a transfer to a superfund. Trustees will absolutely be looking ahead and thinking about the kinds of issue that the hon. Member highlighted. Do they wish to see a superfund transfer or a buy-out transfer in future? Is it plausible that they would get one? They will be relying on the guidance of the TPR and the clear intent in the legislation, which is that superfunds will provide an additional option, not replace the core approach of most defined-benefit schemes’ goal, which is an insurance buy-out. I therefore do not support putting the proposed test on the face of the Bill. Also, as the hon. Member for Aberdeen North pointed out, there are issues with the drafting of the amendment, which requires trustees in legislation to do what they will, in practice, be doing anyway.

The second point of reassurance I can offer is that the Bill sets out a power to substitute another condition to replace this condition, if needed. We will consult the industry to assess what, if any, further requirements might be added to satisfy members before the regime comes into effect. I hope that on that basis, the hon. Member will be happy to withdraw his amendment.

[John Milne]

I thank the Minister for his reassurance, but urge him to keep this in mind. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Kirsty Blackman]

I beg to move amendment 277, in clause 58, page 67, line 34, leave out from “application” to end of line 36 and insert

“the Trustees agree, after due consideration, that it is the best option for their fund’s members;”.

This amendment would prevent a fund from having to carry out an insurance buy-out option.

The amendment asks a reasonable question about the duties of the trustees, and the possibility that they will be overwritten by the legislation and taken away from trustees. I would appreciate some reassurance from the Minister on whether the trustees will still have a duty to act in the best interests of scheme members once the legislation goes through, and whether the amendment tabled by the hon. Member for Tamworth would make things better for trustees, with them better able to act in the best interests of pension scheme members.

[Torsten Bell]

I will answer the hon. Lady’s question directly, and then come to the amendment more broadly. The best way to think about this amendment is that it asks us to remove one of the core framings of the superfund regime, which is that it is not replacing buy-out, where that is available, to trustees. The amendment enables trustees to do what they like, including moving to a superfund even if they could have moved to an insurance buy-out. That is not the policy intention of this Government, nor was it the policy intention of the previous Government. It also does not align with most of the responses to the consultation.

As I said earlier, the job of the legislation is to provide clarity regarding the overall framework, which is that superfunds exist for those schemes that are not able to afford an insurance buy-out. Within that, it is for trustees to make wider judgments, as they do all the time. Directly to the hon. Lady’s question, trustees’ duties to take the decisions that deliver the best outcomes for their members, as a short hand, is totally unaffected by this. This is just a constraint on what the superfund regime is there for, and not because we do not want to see arbitrage between an insurance regulatory regime and a superfund’s regulatory regime. I hope that provides some clarity.

[Kirsty Blackman]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Torsten Bell]

I beg to move amendment 215, in clause 58, page 68, line 1, at beginning insert

“that it is reasonable to expect”.

This amendment adjusts the onboarding condition in relation to the capital adequacy threshold. The Regulator now needs to be satisfied, as at the time it decides the application, that it is reasonable to expect that the threshold will be met immediately following the superfund transfer (rather than that the threshold definitely will be met at that time).

[The Chair]

With this it will be convenient to discuss Government amendments 216 to 221.

[Torsten Bell]

Amendment 215 simply clarifies the policy intent behind the clause. It reflects the reality that pension schemes’ funding is fluid and difficult to predict. Amendment 216 makes the clause clearer and ensures consistency with amendment 215. Amendment 217 introduces a power to enable the Government to consult industry and the regulator on an appropriate timeframe in which to assess whether the technical provision threshold has been met. Amendment 218 is consequential to amendment 217.

Amendment 219 allows the Secretary of State to make special provisions to modify or disapply the onboarding conditions, which we have just been discussing, in subsection (2) in the instance of a merger, division or restructuring of superfund sections. Amendments 220 and 221 set out parliamentary procedures for the powers introduced by amendments 217 and 219 respectively. I hope that hon. Members feel able to accept these amendments.

Amendment 215 agreed to.

Amendments made: 216, in clause 58, page 68, line 3, leave out

“there is a very high likelihood”

and insert

“it is reasonable to expect”.

This amendment adjusts the onboarding condition in relation to the technical provisions threshold for consistency with the change made by Amendment 215.

Amendment 217, in clause 58, page 68, line 5, leave out from “period” to end of line and insert

“specified in regulations made by the Secretary of State;”.

This amendment allows for regulations to set the period by reference to which the onboarding condition relating to the technical provisions threshold is assessed.

Amendment 218, in clause 58, page 68, line 22, leave out paragraph (b).

This amendment is consequential on Amendment 217.

Amendment 219, in clause 58, page 68, line 32, at end insert—

“(5A) The Secretary of State may by regulations modify subsection (2) in its application to a superfund transfer of a kind described in section 53(3) (merger of sections etc).”

This amendment allows for regulations to make special provision about how the onboarding conditions apply (or do not apply) in relation to a superfund transfer within clause 53(3) (under which a restructuring of sections within a superfund can itself be treated as a superfund transfer).

Amendment 220, in clause 58, page 68, line 42, at end insert—

“(7A) Regulations under subsection (2)(d) are subject to the negative procedure.”

This amendment provides for negative parliamentary procedure to apply to regulations made by virtue of subsection (2)(d) as amended by Amendment 217.

Amendment 221, in clause 58, page 68, line 43, at end insert—

“(8A) Regulations under subsection (5A) are subject to the negative procedure.”—(Torsten Bell.)

This amendment provides for negative parliamentary procedure to apply to regulations made by virtue of the provision inserted by Amendment 219.

Question proposed, That the clause, as amended, stand part of the Bill.

[Torsten Bell]

This is an important clause whose role is to set out the criteria for the Pensions Regulator to approve each transfer to a superfund, having dealt with the authorisation of superfunds separately. Those include that the superfund has been authorised by the regulator and that the ceding employer scheme has no active members; we are talking about closed defined-benefit schemes.

The clause also sets out onboarding conditions, which are designed to ensure that members’ benefits are well protected. Superfunds are secure, but not as secure as an insurance buy-out. Schemes with sufficient funds to buy out benefits with an insurer may therefore not enter a superfund. Other onboarding conditions require that the trustees of the ceding scheme make the assessment in the interests of scheme members that the transfer to a superfund will make it more likely that the members’ benefits will be paid in full, and that the capital adequacy threshold is met—which is the main answer to the earlier question from the hon. Member for Aberdeen North. Those and other measures, alongside a known and up-front capital buffer, will ensure that there is a very high probability that members’ benefits will be paid.

Affirmative regulation-making powers will allow greater specificity about the onboarding conditions, including the financial metrics of the capital adequacy threshold and the information that must be provided to the regulator to satisfy the onboarding conditions. I commend clause 58 to the Committee.

[Kirsty Blackman]

I have a quick question, which may also be relevant to other clauses that we discussed earlier, but which I did not bring up at that point. It is about the consistency of consultations and regulations from the Department for Work and Pensions and the Financial Conduct Authority, particularly when consultations are taking place and there are scheme members and prospective pensioners who expect their pension to work in the same way as others and do not have a clue what the arrangements are—for example, whether it is regulated by the FCA or anyone else. Can we still expect parity of service and clarity?

I am aware that the different structures may require slightly different regulations. I want reassurance from the Minister on ensuring that scheme members see a consistent level of service that makes sense in the regulatory frameworks. I also want reassurance that larger organisations running different types of scheme can easily work within and respond to both types of consultation because there is enough consistency applicable across different regulatory mechanisms, within the constraints of the law and depending on the scheme type. I have been asked by insurance and pension industry professionals to raise that with the Minister, and any reassurance that he can give would be appreciated.

[Torsten Bell]

The first reassurance I can give is that this part of the Bill requires only one regulatory framework, because it all sits within the Pensions Regulator and within the defined benefit part of the landscape, as I am aware the hon. Member for Aberdeen North knows.

On the hon. Member’s wider point, which is relevant to many parts of the Bill, I absolutely agree and will offer a two-part reassurance—we will also come to a new clause later that directly gets at this issue. I entirely agree that having two regulatory regimes is no excuse for having different consumer experiences across the two halves of the regime. To address that, I have made sure that the Bill supports the same outcomes, and have stress tested that considerably, but also made it clear that, as a Government policy agenda, our goal is that that should be the case, full stop, including in some areas where it has not been historically. That is absolutely what we need to keep working towards. We should all have that in our heads.

When it comes to the regulations, it is also our clear intention that the FCA and TPR should be working very closely together, as we discussed with the value for money regulations, for example.

Question put and agreed to.

Clause 58, as amended, accordingly ordered to stand part of the Bill.

Clause 59

Special provision for certain schemes coming out of assessment period

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clause 60 stand part.

[Torsten Bell]

Just to clarify, there is significant support from the industry for clause 59 in general terms. This is in part because of the successful rescue of the Debenhams pension scheme out of the Pension Protection Fund assessment—it had not entered the PPF; had it done so, there would have been a significant cut in members’ benefits—by the currently sole operating superfund, Clara Pensions. PPF assessment following employer insolvency is designed to ensure that member benefits are protected. Some schemes that come out of PPF assessment are too well funded to stay in the PPF, because they could achieve better member outcomes than might be offered by the PPF.

The clause amends the onboarding conditions in these instances, to allow trustees of a scheme in PPF assessment to seek to secure their liabilities with a superfund at less than full benefits, but more than would otherwise have been secured through a buy-out that was available, given the level of their assets at that point. Based on the evidence from the PPF’s purple book, we anticipate that, on average, five in 10 so-called PPF-plus schemes could benefit each year.[Official Report, 27 October 2025; Vol. 774, c. 1WC.] (Correction) Trustees can continue to buy out the level of benefits that the scheme can afford with an insurer, but this clause provides them with the option of entering a superfund, where they consider doing so to be in the interest of members.

Clause 60 specifies that an application must be made in the manner and form specified by the Pensions Regulator. The approval process enables the regulator to protect schemes and their members during the application process, and aligns with the regulator’s systems and processes and its experience with other authorisation and supervisory regimes. I commend clauses 59 and 60 to the Committee.

Question put and agreed to.

Clause 59 accordingly ordered to stand part of the Bill.

Clause 60 ordered to stand part of the Bill.

Clause 61

Governance and structure

[The Chair]

With this it will be convenient to discuss clause 62 stand part.

[Torsten Bell]

One of the new features of a superfund regime is that there is a responsible body for the superfund that carries out key parts of its operations. Clause 61 sets out a clear framework of policies and procedures that the responsible body of a superfund must ensure is in place, so that the pension scheme is managed and administered effectively and members’ benefits are protected.

The clause will operate alongside the requirements for an effective system of governance and internal controls, which the scheme trustees are already subject to under the Pensions Act 2004. It places an overarching obligation on the responsible body to ensure that the appropriate governance-related policies and procedures are in place across the operating model of the superfund as a whole, to ensure that the responsible body upholds the same standards as scheme trustees in the interests of scheme members. This is in recognition of the greater potential for conflicts of interest than would be seen in a traditional defined-benefit scheme.

The clause further requires the responsible body to ensure that the superfund meets prescribed conditions as to its structure, including but not limited to its compliance with tax legislation. The detailed structural requirements for superfunds will be set out in regulations, following consultation and in response to innovations in the market.

Clause 62 sets out the management documents that must be prepared and maintained as part of the ongoing requirements for an authorised superfund. The documents include a business plan, a governance manual, a continuity strategy, and a fees and expenses policy. That suite of documentation is designed to ensure the good management of superfunds, and it builds on the requirements and learnings from other authorisation regimes, such as master trusts and collective defined-contribution schemes.

Question put and agreed to.

Clause 61 accordingly ordered to stand part of the Bill.

Clause 62 ordered to stand part of the Bill.

Clause 63

Duty to monitor financial thresholds

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 64 stand part.

Government amendment 222.

Clauses 65 to 68 stand part.

[Torsten Bell]

This group of clauses introduces requirements for superfunds that concern funding and investment. Clause 63 places a duty on the responsible body of a superfund to protect members’ benefits by having robust policies and procedures in place to monitor the financial thresholds.

Clause 64 defines those financial thresholds, which are key components of the regulatory regime and follow the example of the Solvency II supervisory ladder of interventions, tailored to the unique characteristics of superfunds. That means that there is a series of clear and known consequences, both positive and negative, that could happen in superfunds as a direct response to changes to their funding levels. The financial thresholds are designed to protect the security of members’ benefits. When certain thresholds are breached, there are mandatory actions that must be taken to protect members.

Government amendment 222 is minor and technical, and seeks to provide certainty and clarity to the operators and administrators of superfunds that they can use the buffer funds both to invest the buffer in the hopes of generating growth, and to pay expenses, fees and—importantly, for the Treasury half of my job—any taxes that are owed.

Clause 65 requires that arrangements must be made to transfer capital buffer assets to the scheme’s trustees in specific circumstances. That is the important protection, because it is the capital buffer that provides the equivalent of the employer covenant protection that we see in traditional defined-benefit schemes. The release of the buffer to the trustees as part of an approved response plan—which we will come to in clause 81—is fundamental to the protection of members’ benefits.

Clause 66 ensures that the capital buffer cannot be released to anyone other than the scheme’s trustees, except where the liabilities of the scheme have been satisfied, or where the release is a permitted profit extraction. It is important that permitted profit extraction takes place only when the security of the scheme has been materially improved, above the superfund’s initial capital adequacy requirements, which are obviously significant.

Clause 67 requires the responsible body of the superfund to have an investment strategy for the capital buffer, prepared in accordance with any requirements specified in regulations made by the Secretary of State.

Clause 68 requires the responsible body of the superfund to appoint an appropriately qualified, independent person to verify the valuations of the capital buffer at least once a year.

Question put and agreed to.

Clause 63 accordingly ordered to stand part of the Bill.

Clause 64 ordered to stand part of the Bill.

Clause 65

Capital buffer: compulsory release to trustees

Amendment made: 222, in clause 65, page 73, line 2, leave out “for market value consideration” and insert

“—

“(a) in the ordinary course of the investment of the capital buffer, or

(b) in payment of fees, expenses, taxes or other charges incurred (in each case) in connection with the management or administration of the capital buffer”.—(Torsten Bell.)

This amendment clarifies the circumstances in which the capital buffer is regarded as “released” for the purposes of Part 3.

Clause 65, as amended, ordered to stand part of the Bill.

Clauses 66 to 68 ordered to stand part of the Bill.

Clause 69

Key functions

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 70 to 72 stand part.

[Torsten Bell]

This series of clauses sets out requirements for the approval or certification of key superfund personnel. Trustees and actuaries, among others, are already held to account by strict codes of practice and legislative frameworks. These provisions seek to ensure that those working within the responsible bodies of superfunds are also held to an appropriately high standard of conduct.

Clause 69 requires a superfund to have at least one individual responsible for each key administrative function. Clause 70 requires approval from the regulator for individuals looking to hold a key function. This is to ensure that the individual appointed to the role is suitable. A fit and proper test will be conducted to confirm that the named individual has the knowledge and experience for the responsibility that they are undertaking.

Clause 71 requires the responsible body of a superfund to conduct due diligence and be satisfied that any individual carrying out work associated with a key function is suitable. The responsible body must issue a certificate to the individual that it is satisfied with their suitability and must maintain a register of all such certificates. This approach intends to echo the responsibility that trustees assume when delegating tasks toward the carrying out of a key function in a pension scheme.

Clause 72 requires the regulator to approve the superfund scheme trustees. Regulations will specify the information and background checks that the regulator should undertake to ensure that the trustees are fit and proper. Members should note that civil penalties apply to any breaches of clauses 70 to 72. I commend clauses 69 to 72 to the Committee.

Question put and agreed to.

Clause 69 accordingly ordered to stand part of the Bill.

Clauses 70 to 72 ordered to stand part of the Bill.

Clause 73

Events to be notified to the Regulator

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 74 to 77 stand part.

[Torsten Bell]

We now come to the clauses relating to information and reporting requirements for superfunds.

Clause 73 requires the trustees of a superfund to notify the Pensions Regulator if certain events occur that might indicate the need for further investigation by the regulator—for example, a material deterioration in the investment performance of the scheme. Clause 74 requires the superfund trustees to regularly update the Pensions Regulator on the financial position of the superfund. This will enable effective monitoring by the regulator. These regular reports are additional to existing valuation and reporting requirements under the existing defined-benefit scheme funding framework.

Clause 75 allows the regulator to request information from the responsible body of a superfund to monitor its compliance with ongoing requirements that the regulator may specify. Similar powers to request such returns exist in the master trust and CDC authorisation regimes. Clause 76 allows the regulator to appoint someone to prepare a report about a suspected breach of the requirements. This provision is similar to both section 71 of the Pensions Act 2004 and the FCA’s arrangements for the procurement of a report by a skilled person. As in the 2004 Act, the responsible body—the “person” issuing a notice—must bear the cost of the report. Clause 77 requires the responsible body of a superfund to provide information to the superfund trustees to enable them to comply with relevant legislation, including their obligations to report under clause 74. This is about making sure that trustees have access to information that the responsible body may hold.

Members should note that civil penalties apply to the responsible body for breaches of clauses 73, 75, 76 and 77. I commend clauses 73 to 77 to the Committee.

Question put and agreed to.

Clause 73 accordingly ordered to stand part of the Bill.

Clauses 74 to 77 ordered to stand part of the Bill.

Clause 78

“Event of concern” and “period of concern”

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clauses 79 to 81 stand part.

Government amendments 223 and 224

Clauses 82 to 87 stand part.

[Torsten Bell]

We turn now to chapter 5, which is concerned with “events of concern”—events that require closer regulatory scrutiny. These are events such as breaches of financial thresholds, an unauthorised extraction of capital or a material risk of insolvency. An “event of concern” will result in a “period of concern”, which will end once it has been resolved by the regulator or the superfund winds up.

Clause 78 sets out the list of circumstances in relation to a superfund that give rise to an event of concern. Subsection (4) provides an affirmative power to adjust the period and circumstances of financial thresholds not being met. This is because different risks may emerge as the market evolves and further events of concern may be needed.

Clause 79 requires a relevant person to notify the Pensions Regulator when an event of concern occurs or is likely to occur. Members may find it helpful to note that this provision replicates existing measures for defined-contribution master trusts.

Clause 80 requires the superfund or the trustees to produce a response plan to address the event of concern. The response plan must be approved by the Pensions Regulator. If it is not satisfied that the response plan is sufficient, it can request a new plan. Clause 81 specifies the required content of any response plan.

Government amendment 223 is technical. It ties the direction-making powers of the regulator explicitly to the requirements placed upon a given member of the superfund group or trustee of the superfund scheme in clause 80. Clause 80(1) requires the submission of a response plan to an event of concern, while clause 80(3)(b) requires the revision of any response plan if the regulator is not satisfied. Government amendment 224 clarifies the limits of the regulator’s powers to direct superfunds to take corrective action during the event of concern.

Clause 82 lists the specific powers that will be granted to the Pensions Regulator during periods of concern to ensure the timely and effective resolution of any event of concern. A member of the superfund group must comply with a direction given to them by the regulator.

Clause 83 grants the regulator the power to make a direction to pause only if it is satisfied that doing so is necessary to protect the interests of superfund members. Members should note that this direction-making power is standard and reflects those in the regulator’s master trust and CDC authorisation regimes.

Clause 84 allows the regulator to issue a fixed penalty notice to a person if it considers they have failed to comply with some of these requirements. The penalty must not exceed £100,000.

Clause 85 allows the regulator to issue an escalating penalty notice for failure to comply with a requirement, if it has already issued the person a fixed penalty notice under clause 84 in respect of that failure. The penalty is to be determined according to regulations and must not exceed £20,000 per day.

Clause 86 enables the regulator to withdraw authorisation from a superfund if it considers that the superfund has failed to comply with its ongoing requirements. Superfund pension schemes are defined-benefit occupational pension schemes and will be subject to the employer debt provisions under section 75 of the Pensions Act 1995.

Superfunds will include a statutory employer. If that employer becomes insolvent or the scheme enters wind-up, a debt will be triggered from the employer in the normal way under section 75 if the scheme cannot secure member benefits through an insurer buy-out. That is an additional protection that matches how that is carried out in traditional defined-benefit schemes.

Clause 87 enables employer debt to be paid, or partly paid, by funds released from the capital buffer rather than directly by the statutory employer itself.

Question put and agreed to.

Clause 78 accordingly ordered to stand part of the Bill.

Clauses 79 to 81 ordered to stand part of the Bill.

Clause 82

Regulator’s direction-making powers during period of concern

Amendments made: 223, in clause 82, page 84, line 9, leave out

“if no response plan has been approved”

and insert

“if a person has failed to comply with section 80(1) or (3)(b) (requirement to propose response plan or revised response plan)”.

This amendment limits the direction-making power in clause 82(1)(c) so that it can only be exercised where a person has failed to produce a response plan or a revised response plan as required by clause 80.

Amendment 224, in clause 82, page 84, line 16, at end insert—

“(1A) A direction under subsection (1)(c) may not require the provision of financial support to the superfund scheme.”—(Torsten Bell.)

This amendment provides that the direction-making power in clause 82(1)(c) cannot be used to require a person to provide financial support to the superfund scheme.

Clause 82, as amended, ordered to stand part of the Bill.

Clauses 83 to 87 ordered to stand part of the Bill.

Clause 88

Power to extend superfunds legislation to similar structures

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 89 to 92 stand part.

[Torsten Bell]

This is the last grouping that covers the superfund regulatory regime. Clause 88 allows regulations to extend the superfund regime, with or without modification, to structures that share similar characteristics to superfunds. To fall within scope of the power, the structures must hold defined benefit liabilities and not be supported by a substantive employer covenant. The clause could be used, for example, to address schemes that provide benefit security through something other than a capital buffer, such as an insurance product.

Clause 89 is designed to ensure that superfund schemes, despite their special characteristics, fit within the legislative framework applicable to occupational pension schemes. Superfund schemes present particular issues because there is no traditional employer and it will not necessarily be obvious, when the scheme is established, who its eventual members will be. The intention, however, is for them to be regulated as occupational pension schemes and to be structured in a way that works with the relevant legislative frameworks.

Clause 90 makes two specified amendments to legislation in consequence of part 3. The first amendment clarifies how the employer debt legislation will apply where a superfund pension scheme is sectionalised. The second amendment will remove the requirement for a certificate of broad comparability when trustees transfer to a superfund after a scheme comes out of PPF assessment. In such circumstances, trustees will still be required to consider whether the transfer was in the interests of members, and the test in clause 59 will need to be satisfied. This will provide protection for transferring members.

Clause 91 enables transitional provision to be made in relation to a superfund that is already operating under the regulator’s interim regime, which I mentioned earlier. Clause 92 provides definitions for key terms. The Secretary of State may by affirmative regulations amend the definition of “superfund group”. This will provide the flexibility to deal with variation in those group structures and ensure that appropriate entities are captured within the regulatory regime. I commend clauses 88 to 92 to the Committee.

Question put and agreed to.

Clause 88 accordingly ordered to stand part of the Bill.

Clauses 89 to 92 ordered to stand part of the Bill.

Clause 93

Alienation or forfeiture of occupational pension

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 94 to 96 stand part.

[Torsten Bell]

Before a 2022 High Court ruling, it was widely accepted that the Pensions Ombudsman had the status of a competent court, so that a Pensions Ombudsman determination alone would be sufficient for a pension scheme to recoup an overpayment from a member’s pension. The ruling called that into question. Clause 93 simply reinstates the original policy intent that the ombudsman’s determination in pension overpayment dispute cases is sufficient. That is what was debated in Parliament when the ombudsman was established in 1931. Without this legislation, a large additional burden would be imposed on an already stretched county court system.

Turning to clause 94, being diagnosed with life-limiting illness can cause unimaginable suffering for a person and their loved ones. Those nearing the end of their life should be able to access the financial support that they need at that difficult time. I am pleased that we are now able to introduce this clause to amend the definition of terminal illness in the Pension Protection Fund and financial assistance scheme legislation.

Terminal illness is currently defined as where a member’s death from a progressive disease can be reasonably expected within six months. Clause 94 extends that to within 12 months. These new arrangements may enable a few more affected members to claim a payment, but they will mostly enable members to receive payments at an earlier stage of their illness. That small change could make a big impact for affected members at a very difficult time.

Clause 95 covers another aspect of the Pension Protection Fund: its levy. Improved scheme funding of the PPF means that it is far less reliant on the levy than it was previously. For the 2025-26 financial year, the levy has been set at £45 million, its lowest rate. However, the current legislation restricts the PPF board from increasing the levy by more than 25% of the previous year’s levy. That has made it risky for the PPF to reduce the levy significantly, even when it is not needed, because it could take several years to restore it to the previous levels if required. Clause 95 gives the board greater flexibility to adjust the levy by amending the safeguard. The new safeguard will be to prevent the board from charging a levy that is more than the sum of the previous year’s levy and 25% of the previous year’s levy ceiling.

Clause 96 focuses on pensions dashboards. Current legislation does not allow the PPF to provide to pensions dashboards information about the compensation that people can expect, or for the display of that information. The clause expands the scope of pensions dashboards to include information relating to compensation from the PPF and financial assistance from the financial assistance scheme, and it could benefit around 140,000 people. I commend clauses 93 to 96 to the Committee.

[Mark Garnier]

I will be incredibly brief. We have heard a number of details from the Minister. Clauses 93 to 96 contain what we believe are sensible and welcome amendments that reflect current market and scheme conditions. In particular, the changes related to the Pension Protection Fund are positive. With a strong funding position in many defined benefit schemes recently and the PPF’s healthy reserves exceeding £14 billion, these legislative changes are timely. The industry strongly supports the option for a zero levy, which reduces financial pressure on well-funded schemes. The Opposition wholeheartedly support these clauses.

[Kirsty Blackman]

I agree with the point that the Liberal Democrat spokesperson just made. The clauses represent good decisions both for those who work in the industry and for members of the public—people paying into pension schemes and hoping to get an adequate pension when they retire.

I want to comment on a few things included in the clauses. The Work and Pensions Committee report that was published a couple of years ago asked for several of the changes that are being made here, and I appreciate that the Government are now moving towards making a significant number of them in what is the most major piece of pensions legislation we have seen in years. I do appreciate the changes being made.

I am incredibly supportive of the changes to the terminal illness criteria, which create consistency with other Government legislation on the definition of terminal illness. As the Minister said, if this allows more people to access payments earlier and can improve their quality of life when they know how very short their remaining time is, it will be incredibly helpful. It will enable those individuals to access additional payments and funding more easily and quickly, so that they can make the most of the short time they have left. I appreciate that change.

The pensions dashboard changes are sensible, because people will be able to see the widest possible range of things when they log into the dashboard. It will do what it says on the tin, which is to bring everything together in one place, rather than people having to go somewhere else.

Lastly, I do not disagree on the PPF levy changes; I think this is the right decision. However, there is a significant surplus, and there are other things that could have been done with it; we will discuss new clauses 18 and 19 later. I thought the Government’s response to the Work and Pensions Committee report that I mentioned was sensible when it came to the PPF levy changes: “Yes, we agree this needs to be changed and we will look into it.” The response on the pre-1997 lack of uplift for members in the PPF and the FAS was not so helpful. It was more like, “Well, this is an impact on the Government’s balance sheet.” That is genuinely what the Government’s response says.

I am concerned that there are two very different ways of looking at the answers to those questions. In both cases, the answer could have been: “There is a significant surplus. We agree we should do something about it.” Changes could then have been made to support people who are in some cases really struggling to make ends meet, as was mentioned in last Tuesday’s witness session. That could have made a significant difference to their lives. If the Government had committed to allowing or encouraging the PPF to apply an inflationary uplift and provide support—even if they did so in a particularly progressive way, to support folk with the lowest earnings—that would have made the biggest possible difference to people who are genuinely struggling right now.

[Torsten Bell]

I thank all hon. Members for the consensus around these amendments. We will return to the question of indexation shortly with some of the new clauses. I also want to correct the record. In the exciting debate on the Pensions Ombudsman, I mentioned 1931 but meant 1991. It is not quite as old as I suggested, so I am glad that is now noted.

Question put and agreed to. 

Clause 93 accordingly ordered to stand part of the Bill. 

Clauses 94 to 96 ordered to stand part of the Bill. 

Clause 97

Amendments of Pensions Act 2004

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following: 

Government amendments 229, 230, 232, 231 and 233 to 239.

Schedule.

[Torsten Bell]

Clause 97 introduces the schedule of amendments that are being made to the Pensions Act 2004. These amendments extend the regulatory functions of the Pensions Regulator to include superfunds and other matters in the Bill. Amendments 229 to 239 ensure that a similar effect is achieved in relation to the guided retirement, value for money, scale and asset allocation provisions, and the small pot measures.

I particularly draw Members’ attention to paragraph 16 of the schedule, which amends section 127 of the Pensions Act 2004 to extend the duty of the board of the pension protection scheme to superfund schemes. It is important that members of superfunds receive the same protection as members of other occupational schemes.

Paragraph 18 of the schedule amends section 224 of the Pensions Act 2004 to require that superfunds’ actuarial reports, produced in years between triennial valuations of scheme assets and liabilities, must be sent to the Pensions Regulator. This is an additional requirement for superfunds, which will allow for greater oversight by the regulator of their funding positions.

Question put and agreed to.

Clause 97 accordingly ordered to stand part of the Bill.

Amendments made: 229, in schedule, page 100, line 16, leave out “Part 2 or 3 of” and insert—

“Chapter 1, 2, 3A or 5 of Part 2 of, or any provision of Part 3 of,”.

This amendment confines the application of section 13 to specific Chapters of Part 2. The reference to Chapter 3A is to the Chapter referred to in the explanatory statement to NC15.

Amendment 230, in schedule, page 100, line 27, at end insert—

“(1A) Before paragraph (da) insert—

‘(dza) sections 28A to 28F of the Pensions Act 2008 (scale and asset allocation);’”

This amendment ensures that the powers of the Pensions Regulator to inspect premises conferred by section 73 of the Pensions Act 2004 are exercisable in relation to the Regulator’s functions under the new scale and asset allocation measure inserted in the Pensions Act 2008 by Chapter 3 of Part 2 of the Bill.

Amendment 231, in schedule, page 100, line 31, leave out “(value for money)”.

This amendment is consequential on Amendment 232.

Amendment 232, in schedule, page 100, line 31, leave out “Chapter 1” and insert “Chapters 1, 2, 3A and 5”.

This amendment ensures that the powers of the Pensions Regulator to inspect premises conferred by section 73 of the Pensions Act 2004 are exercisable in relation to Chapters 2, 3A and 5 of Part 2 of the Bill. The reference to Chapter 3A is to the Chapter referred to in the explanatory statement to NC15.

Amendment 233, in schedule, page 100, line 32, leave out “(superfunds)”.

This amendment is consequential on Amendment 232.

Amendment 234, in schedule, page 101, line 16, leave out “any” and insert “or by virtue of any”.

This amendment, which relates to Amendment 235, ensures that functions under regulations made under the provisions mentioned in section 80(1)(c) are also captured by that provision.

Amendment 235, in schedule, page 101, leave out line 22 and insert—

“‘Chapter 1, 2, 3A or 5 of Part 2 of, or any provision of Part 3 of, the Pension Schemes Act 2025’”.

This amendment extends the offence in section 80 of the Pensions Act 2004 to false or misleading information provided in connection with the Pensions Regulator’s functions under or by virtue of Chapters 1, 2, 3A or 5 of Part 2 of the Bill. Chapter 3 of Part 2 is already covered, as it amends existing legislation already mentioned in section 80(1)(c). The reference to Chapter 3A is to the Chapter referred to in the explanatory statement to NC15.

Amendment 236, in schedule, page 101, line 25, leave out “any” and insert “or by virtue of any”.

This amendment, which relates to Amendment 237, ensures that functions under regulations made under the provisions mentioned in section 80A(2)(c) are also captured by that provision.

Amendment 237, in schedule, page 101, leave out line 31 and insert—

“‘Chapter 1, 2, 3A or 5 of Part 2 of, or any provision of Part 3 of, the Pension Schemes Act 2025’” —(Torsten Bell.)

This amendment extends the civil penalty provisions in section 8A of the Pensions Act 2008 to false or misleading information provided in connection with the Pensions Regulator’s functions under or by virtue of Chapters 1, 2, 3A or 5 of Part 2 of the Bill. Chapter 3 of Part 2 is already covered, as it amends existing legislation already mentioned in section 80A(2)(c).

Amendment 238, in schedule, page 102, line 10, after “legislation” insert—

“—

(a) after paragraph (d) insert—

‘(ea) Part 1 of the Pensions Act 2008 in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,’;”

This amendment ensures that the scale and asset allocation provisions in Chapter 3 of Part 2 can be the subject of a Regulator code of practice under section 90 of the Pensions Act 2004.

Amendment 239, in schedule, page 102, line 12, leave out “Part 2 or 3 of” and insert—

“Chapter 1, 2, 3A or 5 of Part 2 of, or any provision of Part 3 of,”.—(Torsten Bell.)

This amendment confines the references in section 90(6) of the Pensions Act 2004 to specific Chapters of Part 2.

Schedule, as amended, agreed to.

New Clause 11

Sharing of database where FCA makes corresponding rules

“(1) This section applies if the Financial Conduct Authority makes rules, in relation to persons regulated by it, that correspond to value for money regulations.

(2) The Secretary of State may by regulations make provision for the purpose of enabling or facilitating the use of the database mentioned in section 11(2)(d) for the publication or sharing of information—

(a) that relates to persons to whom the rules made by the Financial Conduct Authority apply, and

(b) that corresponds to metric data,

including provision conferring functions on a person appointed as mentioned in section 11(2)(d).

(3) Regulations under subsection (2) are subject to the negative procedure.”—(Torsten Bell.)

This new clause, intended to be inserted after clause 17, allows for the same value-for-money database to be used for FCA-regulated schemes as for schemes regulated by the Pensions Regulator.

Brought up, read the First and Second time, and added to the Bill.

New Clause 12

Interpretation of Chapter

‘(1) In this Chapter—

“the appropriate authority” , in relation to the making of regulations, means—

(a) where the only pension schemes to which the regulations apply are FCA-regulated pension schemes, the Treasury;

(b) where the only pension schemes to which the regulations apply are not FCA-regulated pension schemes, the Secretary of State;

(c) in any other case, the Treasury and the Secretary of State acting jointly;

“the appropriate regulator” , in relation to a pension scheme, means—

(a) in relation to an FCA-regulated pension scheme, the FCA;

(b) in relation to any other pension scheme, the Pensions Regulator;

“approved main scale default arrangement” , in relation to a pension scheme, means a main scale default arrangement in respect of which the pension scheme is approved under section 28A or 28B of the Pensions Act 2008;

“consolidating” a non-scale default arrangement into an approved main scale default arrangement means ensuring that any assets held subject to the non-scale default arrangement are instead held subject to the approved main scale default arrangement;

“the FCA” means the Financial Conduct Authority;

“FCA-regulated” , in relation to a pension scheme, has the meaning given in subsection (2);

“main scale default arrangement” , in relation to a pension scheme, has the same meaning as in section 28A and 28B of the Pensions Act 2008;

“money purchase benefits” has the same meaning as in the Pension Schemes Act 1993 (see section 181 of that Act);

“non-scale default arrangement” , in relation to a pension scheme, means an arrangement—

(a) which is not an approved main scale default arrangement, and

(b) subject to which assets of the scheme must under the rules of the scheme be held, or may under those rules be held, if the member of the scheme to whom the assets relate does not make a choice as to the arrangement subject to which the assets are to be held;

“operate” , in relation to a default arrangement, has the meaning given in subsection (3);

“pension scheme” has the meaning given by section 1(5) of the Pension Schemes Act 1993;

“the provider” of a pension scheme means—

(a) in relation to an FCA-regulated pension scheme, the person mentioned in subsection (2)(b);

(b) in any other case, the trustees or managers;

“the trustees or managers” , in relation to a pension scheme, means—

(a) in the case of a scheme established under a trust, the trustees of the scheme, and

(b) in any other case, the persons responsible for the management of the scheme.

(2) A pension scheme is “FCA-regulated” if the operation of the scheme—

(a) is carried on in such a way as to be a regulated activity for the purposes of the Financial Services and Markets Act 2000, and

(b) is carried on in the United Kingdom by a person who is in relation to that activity an authorised person under section 19 of that Act.

(3) The provider of a pension scheme “operates” a non-scale default arrangement or main scale default arrangement if any assets held for the purposes of the scheme are held subject to the non-scale default arrangement or main scale default arrangement.’—(Torsten Bell.)

This new clause makes provision about the interpretation of the new Chapter referred to in the explanatory statement to NC15.

Brought up, and read the First time.

[Torsten Bell]

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

[The Chair]

With this, it will be convenient to discuss the following: Government new clause 13—Crown application.

Government new clause 14—Amendments of the Financial Services and Markets Act 2000.

Government new clause 15—Regulations restricting creation of new non-scale default arrangements.

Government new clause 16—Regulations about consolidation of non-scale default arrangements.

Government new clause 17—Review in relation to non-scale default arrangements.

[Torsten Bell]

These new clauses deliver proposals that are contained in the final report of the pension investment review by adding a new chapter in part 2 of the Bill.

Clause 38 set out the requirements for master trusts and group personal pensions to demonstrate that they have sufficient scale, and this new chapter merely supports that delivery. There are too many default arrangements without scale in some schemes, and this fragmentation does not benefit savers. To prevent further fragmentation, new clause 15 allows for regulations to be made to restrict the creation of new non-scale default arrangements. This is not a ban on new default arrangements; there will be circumstances where they will be in savers’ interests. However, any new non-scale default arrangements will need to obtain regulatory approval before they can accept any moneys into them.

We must also deal with the existing fragmentation, and new clause 17 requires a review to be established jointly by the DWP and the Treasury on non-scale default arrangements. This review will look at the scale of the issue and why action has not been taken to consolidate these non-scale default arrangements where it would benefit savers for that to take place.

We anticipate that the review will commence in 2029, once the value for money and contractual overrides are in place. They will provide the tools needed for providers to take action before the review commences. Those tools will help to reduce fragmentation. The FCA and the Pensions Regulator will be required to provide information and assistance to the review. Once the review has been completed, it will be required to publish its findings, and these will inform further steps to support consolidation.

--- Later in debate ---

Brought up, and read the First time.

[Torsten Bell]

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

I thank all Members for their patience. The new clause amends part 1 of the Pensions Act 2008. It is essential to address a current gap in the pension system to ensure that employers share timely and accurate data with pension schemes, beyond the current one-off requirement for employers to provide that information to schemes at the point when the employee is enrolled into the scheme.

Improving data records will help to improve member communications and will support pension schemes to operate more efficiently and effectively. Poor data contributes to wasted administration costs because it often requires manual interventions to verify identities and match records, which is especially important to facilitate the small pots framework that we have discussed previously.

Finally, the new clause extends the relevant pre-existing compliance provisions in the Pensions Act 2008 to these new duties, ensuring that the regulator will have suitable enforcement powers. In summary, the new clause supports better governance through improved data quality.

Question put and agreed to.

New clause 20 accordingly read a Second time, and added to the Bill.

New Clause 22

Additional powers for certain scheme managers

“(1) Scheme regulations may make provision for the purpose of conferring any power or powers falling within subsection (2) or (4) on a specified scheme manager for a scheme for local government workers in England and Wales.

(2) Scheme regulations under this section may make provision conferring on the scheme manager (in relation to carrying out its functions as a scheme manager)—

(a) any specified power or powers of a local authority under Part 6 of the Local Government Act 1972, or

(b) any power or powers corresponding to one or more of the powers of a local authority under that Part.

(3) The power to make provision by virtue of subsection (2) is not exercisable if, or to the extent that, the scheme manager already has the powers of a local authority under Part 6 of the Local Government Act 1972 (otherwise than by virtue of scheme regulations under this section).

(4) Scheme regulations under this section may make provision conferring on the scheme manager (as part of its functions as a scheme manager) power to provide any administrative, professional or technical service for any other person who is a scheme manager for a public service pension scheme.

(5) In subsection (4)—

(a) ‘public service pension scheme’ means a scheme for the payment of pensions and other benefits to or in respect of persons of a description set out in section 1(2) of PSPA 2013, and

(b) ‘scheme manager’ (in the third place it appears) means any person who is, for the purposes of PSPA 2013, a scheme manager for any such scheme.

(6) The power to make provision by virtue of subsection (4) is not exercisable if, or to the extent that, the scheme manager already has the power to provide services referred to in that subsection (otherwise than by virtue of scheme regulations under this section).

(7) Scheme regulations under this section may amend or modify any Act passed before or in the same Session as this Act.

(8) In this section ‘specified’ means specified in scheme regulations under this section.”—(Torsten Bell.)

This new clause enables regulations to confer additional powers specified in subsection (2) or (4) on a specific scheme manager. Most but not all of the scheme managers already have those powers, so the intention is to enable the others to be given any of the powers that they do not already have.

Brought up, read the First and Second time, and added to the Bill.

New Clause 23

Sections (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Great Britain): interpretation and scope

“(1) The following provisions of this section have effect for the purposes of this section and sections (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Great Britain).

(2) ‘GB scheme’ means an occupational pension scheme that was a salary-related contracted-out scheme in England and Wales or Scotland; and for this purpose an occupational pension scheme was a salary-related contracted-out scheme in England and Wales or Scotland at any time if the scheme was contracted-out at that time by virtue of satisfying section 9(2) of the Pension Schemes Act 1993 (as it then had effect).

(3) ‘Scheme actuary’, in relation to a scheme, means—

(a) the person for the time being appointed as actuary for the scheme under section 47 of the Pensions Act 1995 (professional advisers), or

(b) if there is no person so appointed, a fellow of the Institute and Faculty of Actuaries appointed by the trustees or managers of the scheme to carry out the functions of the scheme actuary under section (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes).

(4) ‘Section 37(1)’ refers to section 37(1) of the Pension Schemes Act 1993 (prohibition of alterations to rules of contracted-out schemes in certain circumstances).

(5) ‘Regulation 42’ refers to regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations 1996 (SI 1996/1172) (requirements for alterations to rules of contracted-out schemes).

(6) An alteration purporting to have been made to the rules of a GB scheme is a ‘potentially remediable alteration’ if—

(a) by virtue of section 37(1) and paragraphs (1) and (2) of regulation 42 (as they had effect at the time), the alteration could not be made unless the requirements of paragraph (2)(a), (b) and (c) of regulation 42 (as they then had effect) had been met,

(b) it was treated by the trustees or managers of the scheme, after it was purportedly made, as a valid alteration,

(c) no positive action has been taken by the trustees or managers of the scheme on the basis that they consider the alteration to be void (and so of no legal effect) by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42, and

(d) it is not excluded from the scope of remediation under sections (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases) (see subsection (8)).

(7) In subsection (6)(c) ‘positive action’, in relation to a purported alteration, means—

(a) notifying any members of the scheme in writing to the effect that the trustees or managers consider the alteration to be void (by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42) and that the scheme will be administered on the basis that it has no legal effect, or

(b) taking any other step in relation to the administration of the scheme, in consequence of the trustees or managers considering the alteration to be void, which has (or will have) the effect of altering payments to or in respect of members of the scheme.

(8) An alteration purporting to have been made to the rules of a GB scheme is excluded from the scope of remediation under sections (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases) if any question relating to the validity of the alteration, so far as relating to the requirements of paragraph (2)(a) and (b) of regulation 42—

(a) has been determined by a court before this section comes into force in legal proceedings to which the trustees or managers were a party;

(b) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, but has been settled by agreement between the parties at any time before this section comes into force, or

(c) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, and remains in issue when this section comes into force.”—(Torsten Bell.)

This new clause is intended to form part of a new Chapter 1 in Part 4 to address issues arising from the decision of the Court of Appeal in Virgin Media Ltd v NTL Pension Trustees. This decision called into question the validity of past alterations to salary-related contracted out occupational pension schemes. It appears that a number of schemes were purportedly altered without the prior actuarial confirmation required (under regulation 42(2)(b) of the Occupational Pension Schemes (Contracting-Out) Regulations 1996) being given. In other cases inadequate records mean that the current trustees or managers of some schemes cannot tell whether the necessary confirmation was given. The new Chapter will provide for the retrospective validation of such alterations where certain conditions are met, dealing with Northern Ireland pension schemes separately. The new clause also provides that alterations whose validity was in issue in legal proceedings commenced on or before 5 June 2025 are outside the scope of remediation under the new Chapter. That was the date on which a published ministerial statement indicated that the Government proposed to take retrospective legislative action to address issues arising from the Virgin Media case.

Brought up, and read the First time.

[Torsten Bell]

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

[The Chair]

With this it will be convenient to discuss the following:

Government new clause 24—Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes.

Government new clause 25—Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases.

Government new clause 26—Power to amend provisions of Chapter 1 etc: Great Britain.

Government new clause 27—Sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Power to amend Chapter 1): interpretation and scope.

Government new clause 28—Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes.

Government new clause 29—Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases.

Government new clause 30—Powers to amend Chapter 1 etc: Northern Ireland.

[Torsten Bell]

These new clauses are intended to help schemes affected by the implications of the Virgin Media v. NTL pension trustees court judgments, which found that certain benefit changes could be void if a scheme cannot produce actuarial confirmation that they met the requirements at the time. That has created significant uncertainty about affected schemes’ liabilities and funding requirements.

The new clauses apply to private and public sector defined-benefit pension schemes that were contracted out between 1997 and 2016 under the reference scheme test, which imposed certain legal requirements upon them. The new clauses let schemes ask their actuary to confirm retrospectively that a past change to benefits would not have stopped the scheme from meeting these legal requirements at the time, rather than requiring the scheme to produce actuarial confirmation of the same facts at the time that the change was actually made. They will help members and schemes get the certainty they need.

I want to assure the Committee that these new clauses do not change the underpinning standards that were required. They are not a retrospective pardon for benefit changes that did not meet the legal standards within existing schemes. If a scheme did not obtain written confirmation at the time, and cannot obtain retrospective confirmation, the benefit changes can be held to be void, as provided for under current law.

New clause 23 defines the language and parameters of the other clauses of this section of the Bill. New clause 24 gives the trustees or managers of a scheme the power to ask the scheme actuary to confirm that a previous change to benefits would not have stopped the scheme from meeting legal requirements at that time.

New clause 25 introduces an approach for schemes whose liabilities have already been transferred to the Pension Protection Fund or to the financial assistance scheme. Any benefit changes will be deemed to have been made with actuarial confirmation in those cases. This different approach is needed because individual schemes no longer exist when they have entered the PPF, and there is no longer a scheme actuary. The PPF and FAS would also not have the information required on individual schemes to enable an actuary to provide retrospective confirmation. This ensures that the level of compensation or assistance will continue to be paid to members at current levels.

New clause 25 also introduces an explicit provision for wound-up schemes that deems that benefit changes made to the scheme were compliant with the requirement to have confirmation from an actuary. This will make sure that the benefits provided to members, for example through an annuity, will not be incorrect as a result of any historical failure to obtain a written actuarial confirmation.

The legal recourse for members would otherwise be against the former scheme trustees, because they cannot have recourse against the provider of the annuity. However, we think it would be unreasonable for these trustees to be potentially personally liable in a situation where they could not obtain a retrospective actuarial confirmation because the scheme and its records no longer exist.

New clause 26 provides a regulation-making power to provide for specified alterations to be excluded from the scope of the retrospective confirmation route and to make consequential amendments to the legislation. The power is not intended for immediate use but is included to future-proof the legislation. The clause also contains a separate power to amend existing primary legislation. I want to assure the Committee that the power is narrow, enables consequential amendments to be made, and is subject to the affirmative procedure.

New clauses 27 to 30 make mirroring provisions for Northern Ireland, at the request of the Northern Ireland Executive. I commend the new clauses to the Committee.

Question put and agreed to.

New clause 23 accordingly read a Second time, and added to the Bill.

New Clause 24

Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes

“(1) This section applies to any potentially remediable alteration purportedly made to a scheme other than one to which section (Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases) applies.

(2) If the conditions mentioned in subsection (3) are met in relation to it, the alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made, and so as having always been a valid alteration so far as those requirements are concerned.

(3) The conditions are—

(a) that the trustees or managers of the scheme have made a request in writing to the scheme actuary for the actuary to consider whether or not, on the assumption that it was validly made, the alteration would have prevented the scheme from continuing to satisfy the statutory standard, and

(b) that the scheme actuary has confirmed to the trustees or managers in writing that in the actuary’s opinion it is reasonable to conclude that, on the assumption that it was validly made, the alteration would not have prevented the scheme from continuing to satisfy the statutory standard.

In this subsection ‘the statutory standard’ means the statutory standard for a contracted-out scheme under section 12A of the Pension Schemes Act 1993 as it had effect at the time the alteration was purportedly made.

(4) A scheme actuary who has received a request under subsection (3)(a) in relation to a potentially remediable alteration to a scheme—

(a) may take any professional approach (including making assumptions or relying on presumptions) that is open to the actuary in all the circumstances of the case;

(b) may act on the basis of the information available to the actuary, as long as the actuary considers it sufficient for the purpose of forming an opinion on the subject-matter of the request.

(5) A condition mentioned in subsection (3) may be met by action taken before (as well as action taken after) this section comes into force.

(6) Subsection (7) applies to a scheme if —

(a) there is an assessment period in relation to the scheme within the meaning of Part 2 of the Pensions Act 2004, or

(b) the scheme is operating as a closed scheme under section 153 of that Act.

(7) The powers of the Board of the Pension Protection Fund under section 134 and section 155 of the Pensions Act 2004 to give directions includes power to give a direction to the trustees or managers of the scheme requiring them—

(a) to make a request under subsection (3)(a) above in relation to a potentially remediable alteration to the scheme, and

(b) to take any necessary action to enable or facilitate the making of a decision by the scheme actuary as to whether to give the confirmation described in subsection (3)(b) above in relation to that alteration.”—(Torsten Bell.)

This new clause enables the trustees or managers of a scheme to ask the scheme actuary to consider the position of an alteration when it was (purportedly) made. If the actuary confirms that it is reasonable to conclude that at that time the alteration would not have prevented the scheme from continuing to meet the statutory standard for contracted-out schemes, then the alteration is retrospectively deemed by subsection (2) to have been validly made, so far as the requirements of regulation 42(2)(a) and (b) are concerned.

Brought up, read the First and Second time, and added to the Bill.

New Clause 25

Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases

“(1) This section applies to any potentially remediable alteration purportedly made to the rules of—

(a) a scheme which has been wound up before this section comes into force,

(b) a scheme for which the Board of the Pension Protection Fund has, before this section comes into force, assumed responsibility in accordance with Chapter 3 of Part 2 of the Pensions Act 2004 (see section 161 of that Act), or

(c) a scheme which is a qualifying pension scheme for the purposes of regulation 9 of the Financial Assistance Scheme Regulations 2005 (SI 2005/1986) and in respect of which payments are required to be made under section 286 of the Pensions Act 2004.

(2) The alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made and so as having always been a valid alteration so far as those requirements are concerned.”—(Torsten Bell.)

This new clause deals with cases where it would not now be practicable for the confirmation described in NC24(3)(b) to be obtained in relation to a potentially remediable alteration. In such cases the clause retrospectively deems the alteration to have been validly made so far as the requirements of regulation 42(2)(a) and (b) are concerned.

Brought up, read the First and Second time, and added to the Bill.

New Clause 26

Power to amend provisions of Chapter 1 etc: Great Britain

“(1) The Secretary of State may by regulations amend any of sections (Sections (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1): interpretation and scope), (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to GB salary-related contracted out pension schemes: wound up schemes and other special cases) for the purpose of providing for purported alterations of any specified description to be outside the scope of remediation under either or both of sections (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to salary-related contracted-out pension schemes: wound up schemes and other special cases).

(2) In subsection (1) ‘specified’ means specified in the regulations; and a specified description of purported alterations may be framed by reference to features of the alterations or of the schemes purportedly altered by them (or a combination of both).

(3) Regulations under subsection (1) are subject to the negative procedure.

(4) The Secretary of State may by regulations make incidental, supplementary, consequential or transitional provision in connection with any provision of this Chapter (other than this section and section (Powers to amend Chapter 1 etc: Northern Ireland)).

(5) Regulations under subsection (4) may amend any Act passed before or in the same Session as this Act.

(6) Regulations under subsection (4) are subject to the affirmative procedure if they contain provision made under subsection (5); otherwise they are subject to the negative procedure.”—(Torsten Bell.)

This new clause enables regulations made for England and Wales or Scotland (a) to specify further categories of alterations in respect of which the clauses validating otherwise void alterations do not apply and (b) to make incidental, supplementary, transitional or consequential provision relating to any provision of the new Chapter addressing the validity of alterations to pension schemes.

Brought up, read the First and Second time, and added to the Bill.

New Clause 27

Sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Power to amend Chapter 1): interpretation and scope

“(1) The provisions of this section have effect for the purposes of this section and sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Northern Ireland).

(2) ‘NI scheme’ means an occupational pension scheme that was a salary-related contracted-out scheme in Northern Ireland; and for this purpose an occupational pension scheme was a salary-related contracted-out scheme in Northern Ireland at any time if the scheme was contracted-out at that time by virtue of satisfying section 5(2) of the Pension Schemes (Northern Ireland) Act 1993 (as it then had effect).

(3) ‘Scheme actuary’, in relation to an NI scheme, means—

(a) the person for the time being appointed as actuary for the scheme under Article 47 of the Pensions (Northern Ireland) Order 1995 (SI 1995/3213 (N.I. 22)) (professional advisers), or

(b) if there is no person so appointed, a Fellow of the Institute and Faculty of Actuaries appointed by the trustees or managers of the scheme to carry out the functions of the scheme actuary under section (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes).

(4) ‘Section 33(1)’ refers to section 33(1) of the Pension Schemes (Northern Ireland) Act 1993 (prohibition of alterations to rules of contracted-out schemes in certain circumstances).

(5) ‘Regulation 42’ refers to regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996 (SR 1996 No. 493).

(6) An alteration purporting to have been made to the rules of an NI scheme is a ‘potentially remediable alteration’ if—

(a) by virtue of section 33(1) and paragraphs (1) and (2) of regulation 42 (as they had effect at the time), the alteration could not be made unless the requirements of paragraph (2)(a), (b) and (c) of regulation 42 (as they then had effect) had been met,

(b) it was treated by the trustees or managers of the scheme, after it was purportedly made, as a valid alteration,

(c) no positive action has been taken by the trustees or managers of the scheme on the basis that they consider the alteration to be void (and so of no legal effect) by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42, and

(d) it is not excluded from the scope of remediation under section (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases) (see subsection (7)).

(7) In subsection (6)(c) ‘positive action’, in relation to a purported alteration, means—

(a) notifying any members of the scheme in writing to the effect that the trustees or managers consider the alteration to be void (by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42) and that the scheme will be administered on the basis that it has no legal effect, or

(b) taking any other step in relation to the administration of the scheme, in consequence of the trustees or managers considering the alteration to be void, which has (or will have) the effect of altering payments to or in respect of members of the scheme.

(8) An alteration purporting to have been made to the rules of an NI scheme is excluded from the scope of remediation under sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases) if any question relating to the validity of the alteration, so far as relating to the requirements of paragraph (2)(a) and (b) of regulation 42—

(a) has been determined by a court before this section comes into force in legal proceedings to which the trustees or managers were a party,

(b) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, but has been settled by agreement between the parties at any time before this section comes into force, or

(c) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, and remains in issue when this section comes into force.”—(Torsten Bell.)

This new clause makes provision for Northern Ireland corresponding to NC23. Northern Ireland generally has its own pensions legislation which is separate from the legislation applying to England and Wales and Scotland.

Brought up, read the First and Second time, and added to the Bill.

New Clause 28

Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes

“(1) This section applies to any potentially remediable alteration purportedly made to an NI scheme other than one to which section (Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases) applies.

(2) If the conditions mentioned in subsection (3) are met in relation to it, the alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made, and so as having always been a valid alteration so far as those requirements are concerned.

(3) The conditions are—

(a) that the trustees or managers of the scheme have made a request in writing to the scheme actuary for the actuary to consider whether or not, on the assumption that it was validly made, the alteration would have prevented the scheme from continuing to satisfy the statutory standard, and

(b) that the scheme actuary has confirmed to the trustees or managers in writing that in the actuary’s opinion it is reasonable to conclude that, on the assumption that it was validly made, the alteration would not have prevented the scheme from continuing to satisfy the statutory standard.

In this subsection ‘the statutory standard’ means the statutory standard for a contracted-out scheme under section 8A of the Pension Schemes (Northern Ireland) Act 1993 as it had effect at the time the alteration was purportedly made.

(4) A scheme actuary who has received a request under subsection (3)(a) in relation to a potentially remediable alteration to a scheme—

(a) may take any professional approach (including making assumptions or relying on presumptions) that is open to the actuary in all the circumstances of the case:

(b) may act on the basis of the information available to the actuary, as long as the actuary considers it sufficient for the purpose of forming an opinion on the subject-matter of the request.

(5) A condition mentioned in subsection (3) may be met by action taken before (as well as action taken after) this section comes into force.

(6) Subsection (7) applies to a scheme if —

(a) there is an assessment period in relation to the scheme within the meaning of Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (SI 2005/255 (N.I. 1)) , or

(b) the scheme is operating as a closed scheme under Article 137 of that Order.

(7) The powers of the Board of the Pension Protection Fund under Article 118 and 139 of the Pensions (Northern Ireland) Order 2005 to give directions include power to give a direction to the trustees or managers of the scheme requiring them—

(a) to make a request under subsection (3)(a) in relation to a potentially remediable alteration to the scheme, and

(b) to take any necessary action to enable or facilitate the making of a decision by the actuary as to whether to give the confirmation described in subsection (3)(b) in relation to that alteration.”—(Torsten Bell.)

This new clause makes provision for Northern Ireland corresponding to NC24.

Brought up, read the First and Second time, and added to the Bill.

New Clause 29

Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases

“(1) This section applies to any potentially remediable alteration purportedly made to the rules of—

(a) a scheme which has been wound up before this section comes into force,

(b) a scheme for which the Board of the Pension Protection Fund has, before this section comes into force, assumed responsibility in accordance with Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (see Article 145 of that Order), or

(c) a scheme which is a qualifying pension scheme for the purposes of regulation 9 of the Financial Assistance Scheme Regulations 2005 (SI 2005/1986) and in respect of which payments are required to be made under section 286 of the Pensions Act 2004.

(2) The alteration is be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made and so as having always been a valid alteration so far as those requirements are concerned.”—(Torsten Bell.)

This new clause makes provision for Northern Ireland corresponding to NC25.

Brought up, read the First and Second time, and added to the Bill.

New Clause 30

Powers to amend Chapter 1 etc: Northern Ireland

“(1) A Northern Ireland Department may by regulations amend any of sections (Sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Northern Ireland): interpretation and scope), (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases) for the purpose of providing for purported alterations of any specified description not to be within the scope of remediation under either or both of sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases).

(2) In subsection (1) ‘specified’ means specified in the regulations; and a specified description of purported alterations may be framed by reference to features of the alterations or of the schemes purportedly altered by them (or a combination of both).

(3) A Northern Ireland Department may by regulations make incidental, supplementary, consequential or transitional provision in connection with any provision of this Chapter (other than section (Powers to amend Chapter 1 etc: Great Britain) and this section).

(4) Regulations made under this section are subject to negative resolution within the meaning given by section 41(6) of the Interpretation Act (Northern Ireland) 1954.

(5) The power of a Northern Ireland Department to make regulations under this section is exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)).”—(Torsten Bell.)

This new clause enables regulations made for Northern Ireland (a) to specify further categories of alterations in respect of which the clauses validating otherwise void alterations do not apply and (b) to make incidental, supplementary, transitional or consequential provision relating to any provision of the new Chapter addressing the validity of alterations to pension schemes.

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Universal Pension Advice Entitlement

“(1) The Secretary of State must by regulations establish a system to ensure that every individual has a right to receive free, impartial pension advice at prescribed times.

(2) Regulations under subsection (1) must provide for individuals to be offered advice—

(a) at or around the age of 40; and

(b) at a prescribed age, not more than six years before the individual's expected retirement age.

(3) The regulations must make provision about—

(a) the content and scope of the free, impartial pension advice, which may include, but is not limited to, guidance on—

(i) pension types (including both defined contribution and defined benefit schemes),

(ii) investment strategies,

(iii) charges,

(iv) consolidation of pension pots, and

(v) retirement income options;

(b) the qualifications, independence, and impartiality requirements for any person or body providing advice;

(c) the means by which individuals are notified of their entitlement to receive the advice and how they may access it;

(d) the roles and responsibilities of pension scheme trustees, managers, and providers in facilitating access to advice;

(e) the sharing member information with prescribed persons or bodies subject to appropriate data protection safeguards.

(4) Regulations under this section may—

(a) make different provision for different descriptions of pension schemes or different descriptions of individuals;

(b) confer functions in connection with the provision or oversight of the advice on—

(i) the Pensions Regulator,

(ii) the Financial Conduct Authority,

(iii) the Money and Pensions Service, or

(iv) other prescribed bodies;

(c) require the provision of funding for the advice service from prescribed sources.

(5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”—(John Milne.)

This new clause makes provision by regulations for everyone to receive free, impartial pension advice at age 40 and again around five years before their expected retirement.

Brought up, and read the First time.

[John Milne]

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

Pension Schemes Bill (Seventh sitting)

Torsten Bell Excerpts

Committee stage
Thursday 11th September 2025 Public Bill Committees

[The Chair]

With this it will be convenient to discuss clauses 52 to 56 stand part.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

It is a pleasure to serve under you today, Ms Lewell. As we come to the first clauses dealing with superfunds, I start by setting out the background. Superfunds provide a route for employers to secure the liabilities of closed defined-benefit schemes that are unable to afford insurance buy-out. Their purpose is to better protect members from potential losses in the event of employer insolvency, and to release employers to focus on and invest in their core business, helping to drive economic growth. Superfunds already operate within the framework of pensions legislation and the interim guidance issued by the Pensions Regulator. That interim regime has enabled us to learn what works well, but it is now time to put the regulatory framework for superfunds on a permanent footing.

Clause 51 provides an overview of part 3 of the Bill and sets out the structure and content of the legislative framework for superfunds. Clause 52 defines a superfund scheme as a

“trust-based occupational pension scheme”

that is

“not supported by a substantive employer covenant”

but by a “capital buffer” made of private capital instead. Clause 53 sets out that superfund sections are to be treated as separate schemes, meaning that any potential failure would be contained within that section. Clause 54 prohibits unauthorised superfund activities.

Clause 55 allows the Pensions Regulator to authorise superfunds if it is satisfied that they are likely to meet the ongoing requirements set out in chapters 4 and 5 of the Bill. It will enable the regulator to assess the superfund’s organisation, staff, plans, policies and procedures to ensure that it has robust governance and continuity arrangements. Clause 56 makes it clear that the Pensions Regulator must make an authorisation decision within six months of receiving a completed application, with the potential to extend that period by up to three months. The new legislative regime will protect scheme members and enhance the confidence of stakeholders and market participants.

[Mark Garnier (Wyre Forest) (Con)]

The Opposition support the clauses and welcome the action to legislate formally for defined-benefit superfunds. Securing this in a legislative framework will give trustees and sponsors greater confidence when considering this new consolidation option for defined-benefit schemes. The measures build on the consultation conducted under the previous Government, as well as the intention that the former Chancellor of the Exchequer, my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt), laid out in his 2023 Mansion House speech.

Superfunds are capital-backed consolidators that allow defined-benefit schemes to shift liabilities away from the sponsoring employer, thereby enhancing the security of members’ benefits. By transferring pension obligations to a superfund, companies can reduce long-term liabilities and refocus on core operations, while maintaining strong protection for retirees. Superfunds offer a new endgame strategy for DB schemes unable to secure an insurance buy-out, helping to safeguard member benefits in underfunded or marginal schemes. These measures all seem reasonable, and as I said, this work started under the previous Government, so we wholeheartedly support it.

Question put and agreed to.

Clause 51 accordingly ordered to stand part of the Bill.

Clauses 52 to 56 ordered to stand part of the Bill.

Clause 57

Prohibition of unapproved superfund transfers

Question proposed, That the clause stand part of the Bill.

[Torsten Bell]

Chapter 3 sets out the criteria for approving superfund transfers. The clause protects the integrity of the superfund regime that we are aiming to put in place through the Bill by making it clear that the penalty for committing an unauthorised superfund transfer may be a fine, imprisonment for up to two years, or both. I commend the clause to the Committee.

Question put and agreed to.

Clause 57 accordingly ordered to stand part of the Bill.

Clause 58

Approval of superfund transfers

[John Milne (Horsham) (LD)]

I beg to move amendment 268, in clause 58, page 67, line 34, leave out subsection (a) and insert—

“(a) that, as at the date of the application, the financial position of the ceding scheme is—

(i) not strong enough to enable the trustees to arrange an insurer buy-out, or

(ii) not affordable for the next 36 months following an assessment, certified by the scheme actuary, of all funding options to become strong enough;”.

This amendment expands the onboarding condition to give an alternative to a single day snapshot of a scheme’s funding position.

The Bill tests a scheme’s funding position on a single snapshot day. We feel that is too rigid and could unfairly exclude schemes. A scheme might just miss the mark on that day, even though funding prospects over the next three years are realistic and affordable. The amendment would allow actuaries to certify affordability over a 36-month horizon, providing a fairer and more flexible test. It would protect members by ensuring viable schemes are not shut out, while still requiring strong actuarial oversight. That is especially important in an environment where economic conditions and markets can move significantly and take scheme funding positions with them.

Schemes have not always enjoyed the present funding levels, and today’s surplus is tomorrow’s deficit. We should have regard to that fact and approach the legislation in a manner that reflects it. In the assessment over a longer time period, the trustees would also be able to consider and respond to the situation in relation to dividends, changing investment strategies and expected scheme contributions, among other key factors. In summary, the purpose of the amendment is not to block the superfund option for schemes, but rather to ensure that the legislative framework is set squarely on the basis of protecting DB scheme member benefits and the security and soundness of the pensions system.

[Kirsty Blackman (Aberdeen North) (SNP)]

We have discussed other parts of the regime—for example, new entrants and their ability to scale up, and the longer-term prospects for that—which were perhaps a bit more flexible than this part. Although I am not entirely convinced that the exact wording of the amendment provides the best way to go about it, if the Minister gives some reassurance and a commitment to consider the possibility of not just taking a snapshot day, and to look at the potential ability to scale up or grow, I would be more comfortable with the legislation than I am currently.

[Torsten Bell]

I thank the hon. Members for Torbay and for Horsham for the amendment. It is sensible to discuss one of the key questions in the design of superfunds policy. My main reassurance is that this exact option, or options in this space, were part of the extensive consultation on superfunds. That is important to understand. They were in the consultation, and a wide range of views were expressed in the responses, many of them pointing to the clear practical difficulties of providing the legislative test to assess whether a scheme could afford an insurance buy-out in future, as opposed to its exact position at the time of the assessment.

For reasons I will come on to, that does not mean that it is not important to look ahead to whether a scheme is likely to be able to buy out in the future, but we have taken the view, following the consultation, that that should not be the test on the face of the Bill. That is because, when it comes to projections looking ahead, both the cost of an insurance buy-out and the scheme funding levels can fluctuate significantly. Forecasts ask for more judgment to be exercised compared with an assessment of what the buy-out market is offering at the time it is carried out. It is about the current funding levels. Clause 58 already states that schemes can transfer a superfund only when they are currently unable to secure members’ benefits with an insurer.

I will offer two elements of reassurance to the hon. Member for Horsham. First, we need to be clear about the role of the legislation, which is as I just set out, and the role of the trustees, who are the ones who would approve a transfer to a superfund. Trustees will absolutely be looking ahead and thinking about the kinds of issue that the hon. Member highlighted. Do they wish to see a superfund transfer or a buy-out transfer in future? Is it plausible that they would get one? They will be relying on the guidance of the TPR and the clear intent in the legislation, which is that superfunds will provide an additional option, not replace the core approach of most defined-benefit schemes’ goal, which is an insurance buy-out. I therefore do not support putting the proposed test on the face of the Bill. Also, as the hon. Member for Aberdeen North pointed out, there are issues with the drafting of the amendment, which requires trustees in legislation to do what they will, in practice, be doing anyway.

The second point of reassurance I can offer is that the Bill sets out a power to substitute another condition to replace this condition, if needed. We will consult the industry to assess what, if any, further requirements might be added to satisfy members before the regime comes into effect. I hope that on that basis, the hon. Member will be happy to withdraw his amendment.

[John Milne]

I thank the Minister for his reassurance, but urge him to keep this in mind. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Kirsty Blackman]

I beg to move amendment 277, in clause 58, page 67, line 34, leave out from “application” to end of line 36 and insert

“the Trustees agree, after due consideration, that it is the best option for their fund’s members;”.

This amendment would prevent a fund from having to carry out an insurance buy-out option.

The amendment asks a reasonable question about the duties of the trustees, and the possibility that they will be overwritten by the legislation and taken away from trustees. I would appreciate some reassurance from the Minister on whether the trustees will still have a duty to act in the best interests of scheme members once the legislation goes through, and whether the amendment tabled by the hon. Member for Tamworth would make things better for trustees, with them better able to act in the best interests of pension scheme members.

[Torsten Bell]

I will answer the hon. Lady’s question directly, and then come to the amendment more broadly. The best way to think about this amendment is that it asks us to remove one of the core framings of the superfund regime, which is that it is not replacing buy-out, where that is available, to trustees. The amendment enables trustees to do what they like, including moving to a superfund even if they could have moved to an insurance buy-out. That is not the policy intention of this Government, nor was it the policy intention of the previous Government. It also does not align with most of the responses to the consultation.

As I said earlier, the job of the legislation is to provide clarity regarding the overall framework, which is that superfunds exist for those schemes that are not able to afford an insurance buy-out. Within that, it is for trustees to make wider judgments, as they do all the time. Directly to the hon. Lady’s question, trustees’ duties to take the decisions that deliver the best outcomes for their members, as a short hand, is totally unaffected by this. This is just a constraint on what the superfund regime is there for, and not because we do not want to see arbitrage between an insurance regulatory regime and a superfund’s regulatory regime. I hope that provides some clarity.

[Kirsty Blackman]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Torsten Bell]

I beg to move amendment 215, in clause 58, page 68, line 1, at beginning insert

“that it is reasonable to expect”.

This amendment adjusts the onboarding condition in relation to the capital adequacy threshold. The Regulator now needs to be satisfied, as at the time it decides the application, that it is reasonable to expect that the threshold will be met immediately following the superfund transfer (rather than that the threshold definitely will be met at that time).

[The Chair]

With this it will be convenient to discuss Government amendments 216 to 221.

[Torsten Bell]

Amendment 215 simply clarifies the policy intent behind the clause. It reflects the reality that pension schemes’ funding is fluid and difficult to predict. Amendment 216 makes the clause clearer and ensures consistency with amendment 215. Amendment 217 introduces a power to enable the Government to consult industry and the regulator on an appropriate timeframe in which to assess whether the technical provision threshold has been met. Amendment 218 is consequential to amendment 217.

Amendment 219 allows the Secretary of State to make special provisions to modify or disapply the onboarding conditions, which we have just been discussing, in subsection (2) in the instance of a merger, division or restructuring of superfund sections. Amendments 220 and 221 set out parliamentary procedures for the powers introduced by amendments 217 and 219 respectively. I hope that hon. Members feel able to accept these amendments.

Amendment 215 agreed to.

Amendments made: 216, in clause 58, page 68, line 3, leave out

“there is a very high likelihood”

and insert

“it is reasonable to expect”.

This amendment adjusts the onboarding condition in relation to the technical provisions threshold for consistency with the change made by Amendment 215.

Amendment 217, in clause 58, page 68, line 5, leave out from “period” to end of line and insert

“specified in regulations made by the Secretary of State;”.

This amendment allows for regulations to set the period by reference to which the onboarding condition relating to the technical provisions threshold is assessed.

Amendment 218, in clause 58, page 68, line 22, leave out paragraph (b).

This amendment is consequential on Amendment 217.

Amendment 219, in clause 58, page 68, line 32, at end insert—

“(5A) The Secretary of State may by regulations modify subsection (2) in its application to a superfund transfer of a kind described in section 53(3) (merger of sections etc).”

This amendment allows for regulations to make special provision about how the onboarding conditions apply (or do not apply) in relation to a superfund transfer within clause 53(3) (under which a restructuring of sections within a superfund can itself be treated as a superfund transfer).

Amendment 220, in clause 58, page 68, line 42, at end insert—

“(7A) Regulations under subsection (2)(d) are subject to the negative procedure.”

This amendment provides for negative parliamentary procedure to apply to regulations made by virtue of subsection (2)(d) as amended by Amendment 217.

Amendment 221, in clause 58, page 68, line 43, at end insert—

“(8A) Regulations under subsection (5A) are subject to the negative procedure.”—(Torsten Bell.)

This amendment provides for negative parliamentary procedure to apply to regulations made by virtue of the provision inserted by Amendment 219.

Question proposed, That the clause, as amended, stand part of the Bill.

[Torsten Bell]

This is an important clause whose role is to set out the criteria for the Pensions Regulator to approve each transfer to a superfund, having dealt with the authorisation of superfunds separately. Those include that the superfund has been authorised by the regulator and that the ceding employer scheme has no active members; we are talking about closed defined-benefit schemes.

The clause also sets out onboarding conditions, which are designed to ensure that members’ benefits are well protected. Superfunds are secure, but not as secure as an insurance buy-out. Schemes with sufficient funds to buy out benefits with an insurer may therefore not enter a superfund. Other onboarding conditions require that the trustees of the ceding scheme make the assessment in the interests of scheme members that the transfer to a superfund will make it more likely that the members’ benefits will be paid in full, and that the capital adequacy threshold is met—which is the main answer to the earlier question from the hon. Member for Aberdeen North. Those and other measures, alongside a known and up-front capital buffer, will ensure that there is a very high probability that members’ benefits will be paid.

Affirmative regulation-making powers will allow greater specificity about the onboarding conditions, including the financial metrics of the capital adequacy threshold and the information that must be provided to the regulator to satisfy the onboarding conditions. I commend clause 58 to the Committee.

[Kirsty Blackman]

I have a quick question, which may also be relevant to other clauses that we discussed earlier, but which I did not bring up at that point. It is about the consistency of consultations and regulations from the Department for Work and Pensions and the Financial Conduct Authority, particularly when consultations are taking place and there are scheme members and prospective pensioners who expect their pension to work in the same way as others and do not have a clue what the arrangements are—for example, whether it is regulated by the FCA or anyone else. Can we still expect parity of service and clarity?

I am aware that the different structures may require slightly different regulations. I want reassurance from the Minister on ensuring that scheme members see a consistent level of service that makes sense in the regulatory frameworks. I also want reassurance that larger organisations running different types of scheme can easily work within and respond to both types of consultation because there is enough consistency applicable across different regulatory mechanisms, within the constraints of the law and depending on the scheme type. I have been asked by insurance and pension industry professionals to raise that with the Minister, and any reassurance that he can give would be appreciated.

[Torsten Bell]

The first reassurance I can give is that this part of the Bill requires only one regulatory framework, because it all sits within the Pensions Regulator and within the defined benefit part of the landscape, as I am aware the hon. Member for Aberdeen North knows.

On the hon. Member’s wider point, which is relevant to many parts of the Bill, I absolutely agree and will offer a two-part reassurance—we will also come to a new clause later that directly gets at this issue. I entirely agree that having two regulatory regimes is no excuse for having different consumer experiences across the two halves of the regime. To address that, I have made sure that the Bill supports the same outcomes, and have stress tested that considerably, but also made it clear that, as a Government policy agenda, our goal is that that should be the case, full stop, including in some areas where it has not been historically. That is absolutely what we need to keep working towards. We should all have that in our heads.

When it comes to the regulations, it is also our clear intention that the FCA and TPR should be working very closely together, as we discussed with the value for money regulations, for example.

Question put and agreed to.

Clause 58, as amended, accordingly ordered to stand part of the Bill.

Clause 59

Special provision for certain schemes coming out of assessment period

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clause 60 stand part.

[Torsten Bell]

Just to clarify, there is significant support from the industry for clause 59 in general terms. This is in part because of the successful rescue of the Debenhams pension scheme out of the Pension Protection Fund assessment—it had not entered the PPF; had it done so, there would have been a significant cut in members’ benefits—by the currently sole operating superfund, Clara Pensions. PPF assessment following employer insolvency is designed to ensure that member benefits are protected. Some schemes that come out of PPF assessment are too well funded to stay in the PPF, because they could achieve better member outcomes than might be offered by the PPF.

The clause amends the onboarding conditions in these instances, to allow trustees of a scheme in PPF assessment to seek to secure their liabilities with a superfund at less than full benefits, but more than would otherwise have been secured through a buy-out that was available, given the level of their assets at that point. Based on the evidence from the PPF’s purple book, we anticipate that, on average, five in 10 so-called PPF-plus schemes could benefit each year. Trustees can continue to buy out the level of benefits that the scheme can afford with an insurer, but this clause provides them with the option of entering a superfund, where they consider doing so to be in the interest of members.

Clause 60 specifies that an application must be made in the manner and form specified by the Pensions Regulator. The approval process enables the regulator to protect schemes and their members during the application process, and aligns with the regulator’s systems and processes and its experience with other authorisation and supervisory regimes. I commend clauses 59 and 60 to the Committee.

Question put and agreed to.

Clause 59 accordingly ordered to stand part of the Bill.

Clause 60 ordered to stand part of the Bill.

Clause 61

Governance and structure

[The Chair]

With this it will be convenient to discuss clause 62 stand part.

[Torsten Bell]

One of the new features of a superfund regime is that there is a responsible body for the superfund that carries out key parts of its operations. Clause 61 sets out a clear framework of policies and procedures that the responsible body of a superfund must ensure is in place, so that the pension scheme is managed and administered effectively and members’ benefits are protected.

The clause will operate alongside the requirements for an effective system of governance and internal controls, which the scheme trustees are already subject to under the Pensions Act 2004. It places an overarching obligation on the responsible body to ensure that the appropriate governance-related policies and procedures are in place across the operating model of the superfund as a whole, to ensure that the responsible body upholds the same standards as scheme trustees in the interests of scheme members. This is in recognition of the greater potential for conflicts of interest than would be seen in a traditional defined-benefit scheme.

The clause further requires the responsible body to ensure that the superfund meets prescribed conditions as to its structure, including but not limited to its compliance with tax legislation. The detailed structural requirements for superfunds will be set out in regulations, following consultation and in response to innovations in the market.

Clause 62 sets out the management documents that must be prepared and maintained as part of the ongoing requirements for an authorised superfund. The documents include a business plan, a governance manual, a continuity strategy, and a fees and expenses policy. That suite of documentation is designed to ensure the good management of superfunds, and it builds on the requirements and learnings from other authorisation regimes, such as master trusts and collective defined-contribution schemes.

Question put and agreed to.

Clause 61 accordingly ordered to stand part of the Bill.

Clause 62 ordered to stand part of the Bill.

Clause 63

Duty to monitor financial thresholds

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 64 stand part.

Government amendment 222.

Clauses 65 to 68 stand part.

[Torsten Bell]

This group of clauses introduces requirements for superfunds that concern funding and investment. Clause 63 places a duty on the responsible body of a superfund to protect members’ benefits by having robust policies and procedures in place to monitor the financial thresholds.

Clause 64 defines those financial thresholds, which are key components of the regulatory regime and follow the example of the Solvency II supervisory ladder of interventions, tailored to the unique characteristics of superfunds. That means that there is a series of clear and known consequences, both positive and negative, that could happen in superfunds as a direct response to changes to their funding levels. The financial thresholds are designed to protect the security of members’ benefits. When certain thresholds are breached, there are mandatory actions that must be taken to protect members.

Government amendment 222 is minor and technical, and seeks to provide certainty and clarity to the operators and administrators of superfunds that they can use the buffer funds both to invest the buffer in the hopes of generating growth, and to pay expenses, fees and—importantly, for the Treasury half of my job—any taxes that are owed.

Clause 65 requires that arrangements must be made to transfer capital buffer assets to the scheme’s trustees in specific circumstances. That is the important protection, because it is the capital buffer that provides the equivalent of the employer covenant protection that we see in traditional defined-benefit schemes. The release of the buffer to the trustees as part of an approved response plan—which we will come to in clause 81—is fundamental to the protection of members’ benefits.

Clause 66 ensures that the capital buffer cannot be released to anyone other than the scheme’s trustees, except where the liabilities of the scheme have been satisfied, or where the release is a permitted profit extraction. It is important that permitted profit extraction takes place only when the security of the scheme has been materially improved, above the superfund’s initial capital adequacy requirements, which are obviously significant.

Clause 67 requires the responsible body of the superfund to have an investment strategy for the capital buffer, prepared in accordance with any requirements specified in regulations made by the Secretary of State.

Clause 68 requires the responsible body of the superfund to appoint an appropriately qualified, independent person to verify the valuations of the capital buffer at least once a year.

Question put and agreed to.

Clause 63 accordingly ordered to stand part of the Bill.

Clause 64 ordered to stand part of the Bill.

Clause 65

Capital buffer: compulsory release to trustees

Amendment made: 222, in clause 65, page 73, line 2, leave out “for market value consideration” and insert

“—

“(a) in the ordinary course of the investment of the capital buffer, or

(b) in payment of fees, expenses, taxes or other charges incurred (in each case) in connection with the management or administration of the capital buffer”.—(Torsten Bell.)

This amendment clarifies the circumstances in which the capital buffer is regarded as “released” for the purposes of Part 3.

Clause 65, as amended, ordered to stand part of the Bill.

Clauses 66 to 68 ordered to stand part of the Bill.

Clause 69

Key functions

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 70 to 72 stand part.

[Torsten Bell]

This series of clauses sets out requirements for the approval or certification of key superfund personnel. Trustees and actuaries, among others, are already held to account by strict codes of practice and legislative frameworks. These provisions seek to ensure that those working within the responsible bodies of superfunds are also held to an appropriately high standard of conduct.

Clause 69 requires a superfund to have at least one individual responsible for each key administrative function. Clause 70 requires approval from the regulator for individuals looking to hold a key function. This is to ensure that the individual appointed to the role is suitable. A fit and proper test will be conducted to confirm that the named individual has the knowledge and experience for the responsibility that they are undertaking.

Clause 71 requires the responsible body of a superfund to conduct due diligence and be satisfied that any individual carrying out work associated with a key function is suitable. The responsible body must issue a certificate to the individual that it is satisfied with their suitability and must maintain a register of all such certificates. This approach intends to echo the responsibility that trustees assume when delegating tasks toward the carrying out of a key function in a pension scheme.

Clause 72 requires the regulator to approve the superfund scheme trustees. Regulations will specify the information and background checks that the regulator should undertake to ensure that the trustees are fit and proper. Members should note that civil penalties apply to any breaches of clauses 70 to 72. I commend clauses 69 to 72 to the Committee.

Question put and agreed to.

Clause 69 accordingly ordered to stand part of the Bill.

Clauses 70 to 72 ordered to stand part of the Bill.

Clause 73

Events to be notified to the Regulator

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 74 to 77 stand part.

[Torsten Bell]

We now come to the clauses relating to information and reporting requirements for superfunds.

Clause 73 requires the trustees of a superfund to notify the Pensions Regulator if certain events occur that might indicate the need for further investigation by the regulator—for example, a material deterioration in the investment performance of the scheme. Clause 74 requires the superfund trustees to regularly update the Pensions Regulator on the financial position of the superfund. This will enable effective monitoring by the regulator. These regular reports are additional to existing valuation and reporting requirements under the existing defined-benefit scheme funding framework.

Clause 75 allows the regulator to request information from the responsible body of a superfund to monitor its compliance with ongoing requirements that the regulator may specify. Similar powers to request such returns exist in the master trust and CDC authorisation regimes. Clause 76 allows the regulator to appoint someone to prepare a report about a suspected breach of the requirements. This provision is similar to both section 71 of the Pensions Act 2004 and the FCA’s arrangements for the procurement of a report by a skilled person. As in the 2004 Act, the responsible body—the “person” issuing a notice—must bear the cost of the report. Clause 77 requires the responsible body of a superfund to provide information to the superfund trustees to enable them to comply with relevant legislation, including their obligations to report under clause 74. This is about making sure that trustees have access to information that the responsible body may hold.

Members should note that civil penalties apply to the responsible body for breaches of clauses 73, 75, 76 and 77. I commend clauses 73 to 77 to the Committee.

Question put and agreed to.

Clause 73 accordingly ordered to stand part of the Bill.

Clauses 74 to 77 ordered to stand part of the Bill.

Clause 78

“Event of concern” and “period of concern”

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clauses 79 to 81 stand part.

Government amendments 223 and 224

Clauses 82 to 87 stand part.

[Torsten Bell]

We turn now to chapter 5, which is concerned with “events of concern”—events that require closer regulatory scrutiny. These are events such as breaches of financial thresholds, an unauthorised extraction of capital or a material risk of insolvency. An “event of concern” will result in a “period of concern”, which will end once it has been resolved by the regulator or the superfund winds up.

Clause 78 sets out the list of circumstances in relation to a superfund that give rise to an event of concern. Subsection (4) provides an affirmative power to adjust the period and circumstances of financial thresholds not being met. This is because different risks may emerge as the market evolves and further events of concern may be needed.

Clause 79 requires a relevant person to notify the Pensions Regulator when an event of concern occurs or is likely to occur. Members may find it helpful to note that this provision replicates existing measures for defined-contribution master trusts.

Clause 80 requires the superfund or the trustees to produce a response plan to address the event of concern. The response plan must be approved by the Pensions Regulator. If it is not satisfied that the response plan is sufficient, it can request a new plan. Clause 81 specifies the required content of any response plan.

Government amendment 223 is technical. It ties the direction-making powers of the regulator explicitly to the requirements placed upon a given member of the superfund group or trustee of the superfund scheme in clause 80. Clause 80(1) requires the submission of a response plan to an event of concern, while clause 80(3)(b) requires the revision of any response plan if the regulator is not satisfied. Government amendment 224 clarifies the limits of the regulator’s powers to direct superfunds to take corrective action during the event of concern.

Clause 82 lists the specific powers that will be granted to the Pensions Regulator during periods of concern to ensure the timely and effective resolution of any event of concern. A member of the superfund group must comply with a direction given to them by the regulator.

Clause 83 grants the regulator the power to make a direction to pause only if it is satisfied that doing so is necessary to protect the interests of superfund members. Members should note that this direction-making power is standard and reflects those in the regulator’s master trust and CDC authorisation regimes.

Clause 84 allows the regulator to issue a fixed penalty notice to a person if it considers they have failed to comply with some of these requirements. The penalty must not exceed £100,000.

Clause 85 allows the regulator to issue an escalating penalty notice for failure to comply with a requirement, if it has already issued the person a fixed penalty notice under clause 84 in respect of that failure. The penalty is to be determined according to regulations and must not exceed £20,000 per day.

Clause 86 enables the regulator to withdraw authorisation from a superfund if it considers that the superfund has failed to comply with its ongoing requirements. Superfund pension schemes are defined-benefit occupational pension schemes and will be subject to the employer debt provisions under section 75 of the Pensions Act 1995.

Superfunds will include a statutory employer. If that employer becomes insolvent or the scheme enters wind-up, a debt will be triggered from the employer in the normal way under section 75 if the scheme cannot secure member benefits through an insurer buy-out. That is an additional protection that matches how that is carried out in traditional defined-benefit schemes.

Clause 87 enables employer debt to be paid, or partly paid, by funds released from the capital buffer rather than directly by the statutory employer itself.

Question put and agreed to.

Clause 78 accordingly ordered to stand part of the Bill.

Clauses 79 to 81 ordered to stand part of the Bill.

Clause 82

Regulator’s direction-making powers during period of concern

Amendments made: 223, in clause 82, page 84, line 9, leave out

“if no response plan has been approved”

and insert

“if a person has failed to comply with section 80(1) or (3)(b) (requirement to propose response plan or revised response plan)”.

This amendment limits the direction-making power in clause 82(1)(c) so that it can only be exercised where a person has failed to produce a response plan or a revised response plan as required by clause 80.

Amendment 224, in clause 82, page 84, line 16, at end insert—

“(1A) A direction under subsection (1)(c) may not require the provision of financial support to the superfund scheme.”—(Torsten Bell.)

This amendment provides that the direction-making power in clause 82(1)(c) cannot be used to require a person to provide financial support to the superfund scheme.

Clause 82, as amended, ordered to stand part of the Bill.

Clauses 83 to 87 ordered to stand part of the Bill.

Clause 88

Power to extend superfunds legislation to similar structures

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 89 to 92 stand part.

[Torsten Bell]

This is the last grouping that covers the superfund regulatory regime. Clause 88 allows regulations to extend the superfund regime, with or without modification, to structures that share similar characteristics to superfunds. To fall within scope of the power, the structures must hold defined benefit liabilities and not be supported by a substantive employer covenant. The clause could be used, for example, to address schemes that provide benefit security through something other than a capital buffer, such as an insurance product.

Clause 89 is designed to ensure that superfund schemes, despite their special characteristics, fit within the legislative framework applicable to occupational pension schemes. Superfund schemes present particular issues because there is no traditional employer and it will not necessarily be obvious, when the scheme is established, who its eventual members will be. The intention, however, is for them to be regulated as occupational pension schemes and to be structured in a way that works with the relevant legislative frameworks.

Clause 90 makes two specified amendments to legislation in consequence of part 3. The first amendment clarifies how the employer debt legislation will apply where a superfund pension scheme is sectionalised. The second amendment will remove the requirement for a certificate of broad comparability when trustees transfer to a superfund after a scheme comes out of PPF assessment. In such circumstances, trustees will still be required to consider whether the transfer was in the interests of members, and the test in clause 59 will need to be satisfied. This will provide protection for transferring members.

Clause 91 enables transitional provision to be made in relation to a superfund that is already operating under the regulator’s interim regime, which I mentioned earlier. Clause 92 provides definitions for key terms. The Secretary of State may by affirmative regulations amend the definition of “superfund group”. This will provide the flexibility to deal with variation in those group structures and ensure that appropriate entities are captured within the regulatory regime. I commend clauses 88 to 92 to the Committee.

Question put and agreed to.

Clause 88 accordingly ordered to stand part of the Bill.

Clauses 89 to 92 ordered to stand part of the Bill.

Clause 93

Alienation or forfeiture of occupational pension

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 94 to 96 stand part.

[Torsten Bell]

Before a 2022 High Court ruling, it was widely accepted that the Pensions Ombudsman had the status of a competent court, so that a Pensions Ombudsman determination alone would be sufficient for a pension scheme to recoup an overpayment from a member’s pension. The ruling called that into question. Clause 93 simply reinstates the original policy intent that the ombudsman’s determination in pension overpayment dispute cases is sufficient. That is what was debated in Parliament when the ombudsman was established in 1931. Without this legislation, a large additional burden would be imposed on an already stretched county court system.

Turning to clause 94, being diagnosed with life-limiting illness can cause unimaginable suffering for a person and their loved ones. Those nearing the end of their life should be able to access the financial support that they need at that difficult time. I am pleased that we are now able to introduce this clause to amend the definition of terminal illness in the Pension Protection Fund and financial assistance scheme legislation.

Terminal illness is currently defined as where a member’s death from a progressive disease can be reasonably expected within six months. Clause 94 extends that to within 12 months. These new arrangements may enable a few more affected members to claim a payment, but they will mostly enable members to receive payments at an earlier stage of their illness. That small change could make a big impact for affected members at a very difficult time.

Clause 95 covers another aspect of the Pension Protection Fund: its levy. Improved scheme funding of the PPF means that it is far less reliant on the levy than it was previously. For the 2025-26 financial year, the levy has been set at £45 million, its lowest rate. However, the current legislation restricts the PPF board from increasing the levy by more than 25% of the previous year’s levy. That has made it risky for the PPF to reduce the levy significantly, even when it is not needed, because it could take several years to restore it to the previous levels if required. Clause 95 gives the board greater flexibility to adjust the levy by amending the safeguard. The new safeguard will be to prevent the board from charging a levy that is more than the sum of the previous year’s levy and 25% of the previous year’s levy ceiling.

Clause 96 focuses on pensions dashboards. Current legislation does not allow the PPF to provide to pensions dashboards information about the compensation that people can expect, or for the display of that information. The clause expands the scope of pensions dashboards to include information relating to compensation from the PPF and financial assistance from the financial assistance scheme, and it could benefit around 140,000 people. I commend clauses 93 to 96 to the Committee.

[Mark Garnier]

I will be incredibly brief. We have heard a number of details from the Minister. Clauses 93 to 96 contain what we believe are sensible and welcome amendments that reflect current market and scheme conditions. In particular, the changes related to the Pension Protection Fund are positive. With a strong funding position in many defined benefit schemes recently and the PPF’s healthy reserves exceeding £14 billion, these legislative changes are timely. The industry strongly supports the option for a zero levy, which reduces financial pressure on well-funded schemes. The Opposition wholeheartedly support these clauses.

[Kirsty Blackman]

I agree with the point that the Liberal Democrat spokesperson just made. The clauses represent good decisions both for those who work in the industry and for members of the public—people paying into pension schemes and hoping to get an adequate pension when they retire.

I want to comment on a few things included in the clauses. The Work and Pensions Committee report that was published a couple of years ago asked for several of the changes that are being made here, and I appreciate that the Government are now moving towards making a significant number of them in what is the most major piece of pensions legislation we have seen in years. I do appreciate the changes being made.

I am incredibly supportive of the changes to the terminal illness criteria, which create consistency with other Government legislation on the definition of terminal illness. As the Minister said, if this allows more people to access payments earlier and can improve their quality of life when they know how very short their remaining time is, it will be incredibly helpful. It will enable those individuals to access additional payments and funding more easily and quickly, so that they can make the most of the short time they have left. I appreciate that change.

The pensions dashboard changes are sensible, because people will be able to see the widest possible range of things when they log into the dashboard. It will do what it says on the tin, which is to bring everything together in one place, rather than people having to go somewhere else.

Lastly, I do not disagree on the PPF levy changes; I think this is the right decision. However, there is a significant surplus, and there are other things that could have been done with it; we will discuss new clauses 18 and 19 later. I thought the Government’s response to the Work and Pensions Committee report that I mentioned was sensible when it came to the PPF levy changes: “Yes, we agree this needs to be changed and we will look into it.” The response on the pre-1997 lack of uplift for members in the PPF and the FAS was not so helpful. It was more like, “Well, this is an impact on the Government’s balance sheet.” That is genuinely what the Government’s response says.

I am concerned that there are two very different ways of looking at the answers to those questions. In both cases, the answer could have been: “There is a significant surplus. We agree we should do something about it.” Changes could then have been made to support people who are in some cases really struggling to make ends meet, as was mentioned in last Tuesday’s witness session. That could have made a significant difference to their lives. If the Government had committed to allowing or encouraging the PPF to apply an inflationary uplift and provide support—even if they did so in a particularly progressive way, to support folk with the lowest earnings—that would have made the biggest possible difference to people who are genuinely struggling right now.

[Torsten Bell]

I thank all hon. Members for the consensus around these amendments. We will return to the question of indexation shortly with some of the new clauses. I also want to correct the record. In the exciting debate on the Pensions Ombudsman, I mentioned 1931 but meant 1991. It is not quite as old as I suggested, so I am glad that is now noted.

Question put and agreed to. 

Clause 93 accordingly ordered to stand part of the Bill. 

Clauses 94 to 96 ordered to stand part of the Bill. 

Clause 97

Amendments of Pensions Act 2004

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following: 

Government amendments 229, 230, 232, 231 and 233 to 239.

Schedule.

[Torsten Bell]

Clause 97 introduces the schedule of amendments that are being made to the Pensions Act 2004. These amendments extend the regulatory functions of the Pensions Regulator to include superfunds and other matters in the Bill. Amendments 229 to 239 ensure that a similar effect is achieved in relation to the guided retirement, value for money, scale and asset allocation provisions, and the small pot measures.

I particularly draw Members’ attention to paragraph 16 of the schedule, which amends section 127 of the Pensions Act 2004 to extend the duty of the board of the pension protection scheme to superfund schemes. It is important that members of superfunds receive the same protection as members of other occupational schemes.

Paragraph 18 of the schedule amends section 224 of the Pensions Act 2004 to require that superfunds’ actuarial reports, produced in years between triennial valuations of scheme assets and liabilities, must be sent to the Pensions Regulator. This is an additional requirement for superfunds, which will allow for greater oversight by the regulator of their funding positions.

Question put and agreed to.

Clause 97 accordingly ordered to stand part of the Bill.

Amendments made: 229, in schedule, page 100, line 16, leave out “Part 2 or 3 of” and insert—

“Chapter 1, 2, 3A or 5 of Part 2 of, or any provision of Part 3 of,”.

This amendment confines the application of section 13 to specific Chapters of Part 2. The reference to Chapter 3A is to the Chapter referred to in the explanatory statement to NC15.

Amendment 230, in schedule, page 100, line 27, at end insert—

“(1A) Before paragraph (da) insert—

‘(dza) sections 28A to 28F of the Pensions Act 2008 (scale and asset allocation);’”

This amendment ensures that the powers of the Pensions Regulator to inspect premises conferred by section 73 of the Pensions Act 2004 are exercisable in relation to the Regulator’s functions under the new scale and asset allocation measure inserted in the Pensions Act 2008 by Chapter 3 of Part 2 of the Bill.

Amendment 231, in schedule, page 100, line 31, leave out “(value for money)”.

This amendment is consequential on Amendment 232.

Amendment 232, in schedule, page 100, line 31, leave out “Chapter 1” and insert “Chapters 1, 2, 3A and 5”.

This amendment ensures that the powers of the Pensions Regulator to inspect premises conferred by section 73 of the Pensions Act 2004 are exercisable in relation to Chapters 2, 3A and 5 of Part 2 of the Bill. The reference to Chapter 3A is to the Chapter referred to in the explanatory statement to NC15.

Amendment 233, in schedule, page 100, line 32, leave out “(superfunds)”.

This amendment is consequential on Amendment 232.

Amendment 234, in schedule, page 101, line 16, leave out “any” and insert “or by virtue of any”.

This amendment, which relates to Amendment 235, ensures that functions under regulations made under the provisions mentioned in section 80(1)(c) are also captured by that provision.

Amendment 235, in schedule, page 101, leave out line 22 and insert—

“‘Chapter 1, 2, 3A or 5 of Part 2 of, or any provision of Part 3 of, the Pension Schemes Act 2025’”.

This amendment extends the offence in section 80 of the Pensions Act 2004 to false or misleading information provided in connection with the Pensions Regulator’s functions under or by virtue of Chapters 1, 2, 3A or 5 of Part 2 of the Bill. Chapter 3 of Part 2 is already covered, as it amends existing legislation already mentioned in section 80(1)(c). The reference to Chapter 3A is to the Chapter referred to in the explanatory statement to NC15.

Amendment 236, in schedule, page 101, line 25, leave out “any” and insert “or by virtue of any”.

This amendment, which relates to Amendment 237, ensures that functions under regulations made under the provisions mentioned in section 80A(2)(c) are also captured by that provision.

Amendment 237, in schedule, page 101, leave out line 31 and insert—

“‘Chapter 1, 2, 3A or 5 of Part 2 of, or any provision of Part 3 of, the Pension Schemes Act 2025’” —(Torsten Bell.)

This amendment extends the civil penalty provisions in section 8A of the Pensions Act 2008 to false or misleading information provided in connection with the Pensions Regulator’s functions under or by virtue of Chapters 1, 2, 3A or 5 of Part 2 of the Bill. Chapter 3 of Part 2 is already covered, as it amends existing legislation already mentioned in section 80A(2)(c).

Amendment 238, in schedule, page 102, line 10, after “legislation” insert—

“—

(a) after paragraph (d) insert—

‘(ea) Part 1 of the Pensions Act 2008 in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,’;”

This amendment ensures that the scale and asset allocation provisions in Chapter 3 of Part 2 can be the subject of a Regulator code of practice under section 90 of the Pensions Act 2004.

Amendment 239, in schedule, page 102, line 12, leave out “Part 2 or 3 of” and insert—

“Chapter 1, 2, 3A or 5 of Part 2 of, or any provision of Part 3 of,”.—(Torsten Bell.)

This amendment confines the references in section 90(6) of the Pensions Act 2004 to specific Chapters of Part 2.

Schedule, as amended, agreed to.

New Clause 11

Sharing of database where FCA makes corresponding rules

“(1) This section applies if the Financial Conduct Authority makes rules, in relation to persons regulated by it, that correspond to value for money regulations.

(2) The Secretary of State may by regulations make provision for the purpose of enabling or facilitating the use of the database mentioned in section 11(2)(d) for the publication or sharing of information—

(a) that relates to persons to whom the rules made by the Financial Conduct Authority apply, and

(b) that corresponds to metric data,

including provision conferring functions on a person appointed as mentioned in section 11(2)(d).

(3) Regulations under subsection (2) are subject to the negative procedure.”—(Torsten Bell.)

This new clause, intended to be inserted after clause 17, allows for the same value-for-money database to be used for FCA-regulated schemes as for schemes regulated by the Pensions Regulator.

Brought up, read the First and Second time, and added to the Bill.

New Clause 12

Interpretation of Chapter

‘(1) In this Chapter—

“the appropriate authority” , in relation to the making of regulations, means—

(a) where the only pension schemes to which the regulations apply are FCA-regulated pension schemes, the Treasury;

(b) where the only pension schemes to which the regulations apply are not FCA-regulated pension schemes, the Secretary of State;

(c) in any other case, the Treasury and the Secretary of State acting jointly;

“the appropriate regulator” , in relation to a pension scheme, means—

(a) in relation to an FCA-regulated pension scheme, the FCA;

(b) in relation to any other pension scheme, the Pensions Regulator;

“approved main scale default arrangement” , in relation to a pension scheme, means a main scale default arrangement in respect of which the pension scheme is approved under section 28A or 28B of the Pensions Act 2008;

“consolidating” a non-scale default arrangement into an approved main scale default arrangement means ensuring that any assets held subject to the non-scale default arrangement are instead held subject to the approved main scale default arrangement;

“the FCA” means the Financial Conduct Authority;

“FCA-regulated” , in relation to a pension scheme, has the meaning given in subsection (2);

“main scale default arrangement” , in relation to a pension scheme, has the same meaning as in section 28A and 28B of the Pensions Act 2008;

“money purchase benefits” has the same meaning as in the Pension Schemes Act 1993 (see section 181 of that Act);

“non-scale default arrangement” , in relation to a pension scheme, means an arrangement—

(a) which is not an approved main scale default arrangement, and

(b) subject to which assets of the scheme must under the rules of the scheme be held, or may under those rules be held, if the member of the scheme to whom the assets relate does not make a choice as to the arrangement subject to which the assets are to be held;

“operate” , in relation to a default arrangement, has the meaning given in subsection (3);

“pension scheme” has the meaning given by section 1(5) of the Pension Schemes Act 1993;

“the provider” of a pension scheme means—

(a) in relation to an FCA-regulated pension scheme, the person mentioned in subsection (2)(b);

(b) in any other case, the trustees or managers;

“the trustees or managers” , in relation to a pension scheme, means—

(a) in the case of a scheme established under a trust, the trustees of the scheme, and

(b) in any other case, the persons responsible for the management of the scheme.

(2) A pension scheme is “FCA-regulated” if the operation of the scheme—

(a) is carried on in such a way as to be a regulated activity for the purposes of the Financial Services and Markets Act 2000, and

(b) is carried on in the United Kingdom by a person who is in relation to that activity an authorised person under section 19 of that Act.

(3) The provider of a pension scheme “operates” a non-scale default arrangement or main scale default arrangement if any assets held for the purposes of the scheme are held subject to the non-scale default arrangement or main scale default arrangement.’—(Torsten Bell.)

This new clause makes provision about the interpretation of the new Chapter referred to in the explanatory statement to NC15.

Brought up, and read the First time.

[Torsten Bell]

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

[The Chair]

With this, it will be convenient to discuss the following: Government new clause 13—Crown application.

Government new clause 14—Amendments of the Financial Services and Markets Act 2000.

Government new clause 15—Regulations restricting creation of new non-scale default arrangements.

Government new clause 16—Regulations about consolidation of non-scale default arrangements.

Government new clause 17—Review in relation to non-scale default arrangements.

[Torsten Bell]

These new clauses deliver proposals that are contained in the final report of the pension investment review by adding a new chapter in part 2 of the Bill.

Clause 38 set out the requirements for master trusts and group personal pensions to demonstrate that they have sufficient scale, and this new chapter merely supports that delivery. There are too many default arrangements without scale in some schemes, and this fragmentation does not benefit savers. To prevent further fragmentation, new clause 15 allows for regulations to be made to restrict the creation of new non-scale default arrangements. This is not a ban on new default arrangements; there will be circumstances where they will be in savers’ interests. However, any new non-scale default arrangements will need to obtain regulatory approval before they can accept any moneys into them.

We must also deal with the existing fragmentation, and new clause 17 requires a review to be established jointly by the DWP and the Treasury on non-scale default arrangements. This review will look at the scale of the issue and why action has not been taken to consolidate these non-scale default arrangements where it would benefit savers for that to take place.

We anticipate that the review will commence in 2029, once the value for money and contractual overrides are in place. They will provide the tools needed for providers to take action before the review commences. Those tools will help to reduce fragmentation. The FCA and the Pensions Regulator will be required to provide information and assistance to the review. Once the review has been completed, it will be required to publish its findings, and these will inform further steps to support consolidation.

--- Later in debate ---

Brought up, and read the First time.

[Torsten Bell]

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

I thank all Members for their patience. The new clause amends part 1 of the Pensions Act 2008. It is essential to address a current gap in the pension system to ensure that employers share timely and accurate data with pension schemes, beyond the current one-off requirement for employers to provide that information to schemes at the point when the employee is enrolled into the scheme.

Improving data records will help to improve member communications and will support pension schemes to operate more efficiently and effectively. Poor data contributes to wasted administration costs because it often requires manual interventions to verify identities and match records, which is especially important to facilitate the small pots framework that we have discussed previously.

Finally, the new clause extends the relevant pre-existing compliance provisions in the Pensions Act 2008 to these new duties, ensuring that the regulator will have suitable enforcement powers. In summary, the new clause supports better governance through improved data quality.

Question put and agreed to.

New clause 20 accordingly read a Second time, and added to the Bill.

New Clause 22

Additional powers for certain scheme managers

“(1) Scheme regulations may make provision for the purpose of conferring any power or powers falling within subsection (2) or (4) on a specified scheme manager for a scheme for local government workers in England and Wales.

(2) Scheme regulations under this section may make provision conferring on the scheme manager (in relation to carrying out its functions as a scheme manager)—

(a) any specified power or powers of a local authority under Part 6 of the Local Government Act 1972, or

(b) any power or powers corresponding to one or more of the powers of a local authority under that Part.

(3) The power to make provision by virtue of subsection (2) is not exercisable if, or to the extent that, the scheme manager already has the powers of a local authority under Part 6 of the Local Government Act 1972 (otherwise than by virtue of scheme regulations under this section).

(4) Scheme regulations under this section may make provision conferring on the scheme manager (as part of its functions as a scheme manager) power to provide any administrative, professional or technical service for any other person who is a scheme manager for a public service pension scheme.

(5) In subsection (4)—

(a) ‘public service pension scheme’ means a scheme for the payment of pensions and other benefits to or in respect of persons of a description set out in section 1(2) of PSPA 2013, and

(b) ‘scheme manager’ (in the third place it appears) means any person who is, for the purposes of PSPA 2013, a scheme manager for any such scheme.

(6) The power to make provision by virtue of subsection (4) is not exercisable if, or to the extent that, the scheme manager already has the power to provide services referred to in that subsection (otherwise than by virtue of scheme regulations under this section).

(7) Scheme regulations under this section may amend or modify any Act passed before or in the same Session as this Act.

(8) In this section ‘specified’ means specified in scheme regulations under this section.”—(Torsten Bell.)

This new clause enables regulations to confer additional powers specified in subsection (2) or (4) on a specific scheme manager. Most but not all of the scheme managers already have those powers, so the intention is to enable the others to be given any of the powers that they do not already have.

Brought up, read the First and Second time, and added to the Bill.

New Clause 23

Sections (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Great Britain): interpretation and scope

“(1) The following provisions of this section have effect for the purposes of this section and sections (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Great Britain).

(2) ‘GB scheme’ means an occupational pension scheme that was a salary-related contracted-out scheme in England and Wales or Scotland; and for this purpose an occupational pension scheme was a salary-related contracted-out scheme in England and Wales or Scotland at any time if the scheme was contracted-out at that time by virtue of satisfying section 9(2) of the Pension Schemes Act 1993 (as it then had effect).

(3) ‘Scheme actuary’, in relation to a scheme, means—

(a) the person for the time being appointed as actuary for the scheme under section 47 of the Pensions Act 1995 (professional advisers), or

(b) if there is no person so appointed, a fellow of the Institute and Faculty of Actuaries appointed by the trustees or managers of the scheme to carry out the functions of the scheme actuary under section (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes).

(4) ‘Section 37(1)’ refers to section 37(1) of the Pension Schemes Act 1993 (prohibition of alterations to rules of contracted-out schemes in certain circumstances).

(5) ‘Regulation 42’ refers to regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations 1996 (SI 1996/1172) (requirements for alterations to rules of contracted-out schemes).

(6) An alteration purporting to have been made to the rules of a GB scheme is a ‘potentially remediable alteration’ if—

(a) by virtue of section 37(1) and paragraphs (1) and (2) of regulation 42 (as they had effect at the time), the alteration could not be made unless the requirements of paragraph (2)(a), (b) and (c) of regulation 42 (as they then had effect) had been met,

(b) it was treated by the trustees or managers of the scheme, after it was purportedly made, as a valid alteration,

(c) no positive action has been taken by the trustees or managers of the scheme on the basis that they consider the alteration to be void (and so of no legal effect) by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42, and

(d) it is not excluded from the scope of remediation under sections (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases) (see subsection (8)).

(7) In subsection (6)(c) ‘positive action’, in relation to a purported alteration, means—

(a) notifying any members of the scheme in writing to the effect that the trustees or managers consider the alteration to be void (by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42) and that the scheme will be administered on the basis that it has no legal effect, or

(b) taking any other step in relation to the administration of the scheme, in consequence of the trustees or managers considering the alteration to be void, which has (or will have) the effect of altering payments to or in respect of members of the scheme.

(8) An alteration purporting to have been made to the rules of a GB scheme is excluded from the scope of remediation under sections (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases) if any question relating to the validity of the alteration, so far as relating to the requirements of paragraph (2)(a) and (b) of regulation 42—

(a) has been determined by a court before this section comes into force in legal proceedings to which the trustees or managers were a party;

(b) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, but has been settled by agreement between the parties at any time before this section comes into force, or

(c) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, and remains in issue when this section comes into force.”—(Torsten Bell.)

This new clause is intended to form part of a new Chapter 1 in Part 4 to address issues arising from the decision of the Court of Appeal in Virgin Media Ltd v NTL Pension Trustees. This decision called into question the validity of past alterations to salary-related contracted out occupational pension schemes. It appears that a number of schemes were purportedly altered without the prior actuarial confirmation required (under regulation 42(2)(b) of the Occupational Pension Schemes (Contracting-Out) Regulations 1996) being given. In other cases inadequate records mean that the current trustees or managers of some schemes cannot tell whether the necessary confirmation was given. The new Chapter will provide for the retrospective validation of such alterations where certain conditions are met, dealing with Northern Ireland pension schemes separately. The new clause also provides that alterations whose validity was in issue in legal proceedings commenced on or before 5 June 2025 are outside the scope of remediation under the new Chapter. That was the date on which a published ministerial statement indicated that the Government proposed to take retrospective legislative action to address issues arising from the Virgin Media case.

Brought up, and read the First time.

[Torsten Bell]

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

[The Chair]

With this it will be convenient to discuss the following:

Government new clause 24—Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes.

Government new clause 25—Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases.

Government new clause 26—Power to amend provisions of Chapter 1 etc: Great Britain.

Government new clause 27—Sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Power to amend Chapter 1): interpretation and scope.

Government new clause 28—Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes.

Government new clause 29—Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases.

Government new clause 30—Powers to amend Chapter 1 etc: Northern Ireland.

[Torsten Bell]

These new clauses are intended to help schemes affected by the implications of the Virgin Media v. NTL pension trustees court judgments, which found that certain benefit changes could be void if a scheme cannot produce actuarial confirmation that they met the requirements at the time. That has created significant uncertainty about affected schemes’ liabilities and funding requirements.

The new clauses apply to private and public sector defined-benefit pension schemes that were contracted out between 1997 and 2016 under the reference scheme test, which imposed certain legal requirements upon them. The new clauses let schemes ask their actuary to confirm retrospectively that a past change to benefits would not have stopped the scheme from meeting these legal requirements at the time, rather than requiring the scheme to produce actuarial confirmation of the same facts at the time that the change was actually made. They will help members and schemes get the certainty they need.

I want to assure the Committee that these new clauses do not change the underpinning standards that were required. They are not a retrospective pardon for benefit changes that did not meet the legal standards within existing schemes. If a scheme did not obtain written confirmation at the time, and cannot obtain retrospective confirmation, the benefit changes can be held to be void, as provided for under current law.

New clause 23 defines the language and parameters of the other clauses of this section of the Bill. New clause 24 gives the trustees or managers of a scheme the power to ask the scheme actuary to confirm that a previous change to benefits would not have stopped the scheme from meeting legal requirements at that time.

New clause 25 introduces an approach for schemes whose liabilities have already been transferred to the Pension Protection Fund or to the financial assistance scheme. Any benefit changes will be deemed to have been made with actuarial confirmation in those cases. This different approach is needed because individual schemes no longer exist when they have entered the PPF, and there is no longer a scheme actuary. The PPF and FAS would also not have the information required on individual schemes to enable an actuary to provide retrospective confirmation. This ensures that the level of compensation or assistance will continue to be paid to members at current levels.

New clause 25 also introduces an explicit provision for wound-up schemes that deems that benefit changes made to the scheme were compliant with the requirement to have confirmation from an actuary. This will make sure that the benefits provided to members, for example through an annuity, will not be incorrect as a result of any historical failure to obtain a written actuarial confirmation.

The legal recourse for members would otherwise be against the former scheme trustees, because they cannot have recourse against the provider of the annuity. However, we think it would be unreasonable for these trustees to be potentially personally liable in a situation where they could not obtain a retrospective actuarial confirmation because the scheme and its records no longer exist.

New clause 26 provides a regulation-making power to provide for specified alterations to be excluded from the scope of the retrospective confirmation route and to make consequential amendments to the legislation. The power is not intended for immediate use but is included to future-proof the legislation. The clause also contains a separate power to amend existing primary legislation. I want to assure the Committee that the power is narrow, enables consequential amendments to be made, and is subject to the affirmative procedure.

New clauses 27 to 30 make mirroring provisions for Northern Ireland, at the request of the Northern Ireland Executive. I commend the new clauses to the Committee.

Question put and agreed to.

New clause 23 accordingly read a Second time, and added to the Bill.

New Clause 24

Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes

“(1) This section applies to any potentially remediable alteration purportedly made to a scheme other than one to which section (Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases) applies.

(2) If the conditions mentioned in subsection (3) are met in relation to it, the alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made, and so as having always been a valid alteration so far as those requirements are concerned.

(3) The conditions are—

(a) that the trustees or managers of the scheme have made a request in writing to the scheme actuary for the actuary to consider whether or not, on the assumption that it was validly made, the alteration would have prevented the scheme from continuing to satisfy the statutory standard, and

(b) that the scheme actuary has confirmed to the trustees or managers in writing that in the actuary’s opinion it is reasonable to conclude that, on the assumption that it was validly made, the alteration would not have prevented the scheme from continuing to satisfy the statutory standard.

In this subsection ‘the statutory standard’ means the statutory standard for a contracted-out scheme under section 12A of the Pension Schemes Act 1993 as it had effect at the time the alteration was purportedly made.

(4) A scheme actuary who has received a request under subsection (3)(a) in relation to a potentially remediable alteration to a scheme—

(a) may take any professional approach (including making assumptions or relying on presumptions) that is open to the actuary in all the circumstances of the case;

(b) may act on the basis of the information available to the actuary, as long as the actuary considers it sufficient for the purpose of forming an opinion on the subject-matter of the request.

(5) A condition mentioned in subsection (3) may be met by action taken before (as well as action taken after) this section comes into force.

(6) Subsection (7) applies to a scheme if —

(a) there is an assessment period in relation to the scheme within the meaning of Part 2 of the Pensions Act 2004, or

(b) the scheme is operating as a closed scheme under section 153 of that Act.

(7) The powers of the Board of the Pension Protection Fund under section 134 and section 155 of the Pensions Act 2004 to give directions includes power to give a direction to the trustees or managers of the scheme requiring them—

(a) to make a request under subsection (3)(a) above in relation to a potentially remediable alteration to the scheme, and

(b) to take any necessary action to enable or facilitate the making of a decision by the scheme actuary as to whether to give the confirmation described in subsection (3)(b) above in relation to that alteration.”—(Torsten Bell.)

This new clause enables the trustees or managers of a scheme to ask the scheme actuary to consider the position of an alteration when it was (purportedly) made. If the actuary confirms that it is reasonable to conclude that at that time the alteration would not have prevented the scheme from continuing to meet the statutory standard for contracted-out schemes, then the alteration is retrospectively deemed by subsection (2) to have been validly made, so far as the requirements of regulation 42(2)(a) and (b) are concerned.

Brought up, read the First and Second time, and added to the Bill.

New Clause 25

Validity of certain alterations to GB salary-related contracted-out pension schemes: wound up schemes and other special cases

“(1) This section applies to any potentially remediable alteration purportedly made to the rules of—

(a) a scheme which has been wound up before this section comes into force,

(b) a scheme for which the Board of the Pension Protection Fund has, before this section comes into force, assumed responsibility in accordance with Chapter 3 of Part 2 of the Pensions Act 2004 (see section 161 of that Act), or

(c) a scheme which is a qualifying pension scheme for the purposes of regulation 9 of the Financial Assistance Scheme Regulations 2005 (SI 2005/1986) and in respect of which payments are required to be made under section 286 of the Pensions Act 2004.

(2) The alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made and so as having always been a valid alteration so far as those requirements are concerned.”—(Torsten Bell.)

This new clause deals with cases where it would not now be practicable for the confirmation described in NC24(3)(b) to be obtained in relation to a potentially remediable alteration. In such cases the clause retrospectively deems the alteration to have been validly made so far as the requirements of regulation 42(2)(a) and (b) are concerned.

Brought up, read the First and Second time, and added to the Bill.

New Clause 26

Power to amend provisions of Chapter 1 etc: Great Britain

“(1) The Secretary of State may by regulations amend any of sections (Sections (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1): interpretation and scope), (Validity of certain alterations to GB salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to GB salary-related contracted out pension schemes: wound up schemes and other special cases) for the purpose of providing for purported alterations of any specified description to be outside the scope of remediation under either or both of sections (Validity of certain alterations to salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to salary-related contracted-out pension schemes: wound up schemes and other special cases).

(2) In subsection (1) ‘specified’ means specified in the regulations; and a specified description of purported alterations may be framed by reference to features of the alterations or of the schemes purportedly altered by them (or a combination of both).

(3) Regulations under subsection (1) are subject to the negative procedure.

(4) The Secretary of State may by regulations make incidental, supplementary, consequential or transitional provision in connection with any provision of this Chapter (other than this section and section (Powers to amend Chapter 1 etc: Northern Ireland)).

(5) Regulations under subsection (4) may amend any Act passed before or in the same Session as this Act.

(6) Regulations under subsection (4) are subject to the affirmative procedure if they contain provision made under subsection (5); otherwise they are subject to the negative procedure.”—(Torsten Bell.)

This new clause enables regulations made for England and Wales or Scotland (a) to specify further categories of alterations in respect of which the clauses validating otherwise void alterations do not apply and (b) to make incidental, supplementary, transitional or consequential provision relating to any provision of the new Chapter addressing the validity of alterations to pension schemes.

Brought up, read the First and Second time, and added to the Bill.

New Clause 27

Sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Power to amend Chapter 1): interpretation and scope

“(1) The provisions of this section have effect for the purposes of this section and sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Northern Ireland).

(2) ‘NI scheme’ means an occupational pension scheme that was a salary-related contracted-out scheme in Northern Ireland; and for this purpose an occupational pension scheme was a salary-related contracted-out scheme in Northern Ireland at any time if the scheme was contracted-out at that time by virtue of satisfying section 5(2) of the Pension Schemes (Northern Ireland) Act 1993 (as it then had effect).

(3) ‘Scheme actuary’, in relation to an NI scheme, means—

(a) the person for the time being appointed as actuary for the scheme under Article 47 of the Pensions (Northern Ireland) Order 1995 (SI 1995/3213 (N.I. 22)) (professional advisers), or

(b) if there is no person so appointed, a Fellow of the Institute and Faculty of Actuaries appointed by the trustees or managers of the scheme to carry out the functions of the scheme actuary under section (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes).

(4) ‘Section 33(1)’ refers to section 33(1) of the Pension Schemes (Northern Ireland) Act 1993 (prohibition of alterations to rules of contracted-out schemes in certain circumstances).

(5) ‘Regulation 42’ refers to regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996 (SR 1996 No. 493).

(6) An alteration purporting to have been made to the rules of an NI scheme is a ‘potentially remediable alteration’ if—

(a) by virtue of section 33(1) and paragraphs (1) and (2) of regulation 42 (as they had effect at the time), the alteration could not be made unless the requirements of paragraph (2)(a), (b) and (c) of regulation 42 (as they then had effect) had been met,

(b) it was treated by the trustees or managers of the scheme, after it was purportedly made, as a valid alteration,

(c) no positive action has been taken by the trustees or managers of the scheme on the basis that they consider the alteration to be void (and so of no legal effect) by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42, and

(d) it is not excluded from the scope of remediation under section (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases) (see subsection (7)).

(7) In subsection (6)(c) ‘positive action’, in relation to a purported alteration, means—

(a) notifying any members of the scheme in writing to the effect that the trustees or managers consider the alteration to be void (by reason of non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42) and that the scheme will be administered on the basis that it has no legal effect, or

(b) taking any other step in relation to the administration of the scheme, in consequence of the trustees or managers considering the alteration to be void, which has (or will have) the effect of altering payments to or in respect of members of the scheme.

(8) An alteration purporting to have been made to the rules of an NI scheme is excluded from the scope of remediation under sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases) if any question relating to the validity of the alteration, so far as relating to the requirements of paragraph (2)(a) and (b) of regulation 42—

(a) has been determined by a court before this section comes into force in legal proceedings to which the trustees or managers were a party,

(b) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, but has been settled by agreement between the parties at any time before this section comes into force, or

(c) was in issue on or before 5 June 2025 in legal proceedings to which the trustees or managers were a party, and remains in issue when this section comes into force.”—(Torsten Bell.)

This new clause makes provision for Northern Ireland corresponding to NC23. Northern Ireland generally has its own pensions legislation which is separate from the legislation applying to England and Wales and Scotland.

Brought up, read the First and Second time, and added to the Bill.

New Clause 28

Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes

“(1) This section applies to any potentially remediable alteration purportedly made to an NI scheme other than one to which section (Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases) applies.

(2) If the conditions mentioned in subsection (3) are met in relation to it, the alteration is to be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made, and so as having always been a valid alteration so far as those requirements are concerned.

(3) The conditions are—

(a) that the trustees or managers of the scheme have made a request in writing to the scheme actuary for the actuary to consider whether or not, on the assumption that it was validly made, the alteration would have prevented the scheme from continuing to satisfy the statutory standard, and

(b) that the scheme actuary has confirmed to the trustees or managers in writing that in the actuary’s opinion it is reasonable to conclude that, on the assumption that it was validly made, the alteration would not have prevented the scheme from continuing to satisfy the statutory standard.

In this subsection ‘the statutory standard’ means the statutory standard for a contracted-out scheme under section 8A of the Pension Schemes (Northern Ireland) Act 1993 as it had effect at the time the alteration was purportedly made.

(4) A scheme actuary who has received a request under subsection (3)(a) in relation to a potentially remediable alteration to a scheme—

(a) may take any professional approach (including making assumptions or relying on presumptions) that is open to the actuary in all the circumstances of the case:

(b) may act on the basis of the information available to the actuary, as long as the actuary considers it sufficient for the purpose of forming an opinion on the subject-matter of the request.

(5) A condition mentioned in subsection (3) may be met by action taken before (as well as action taken after) this section comes into force.

(6) Subsection (7) applies to a scheme if —

(a) there is an assessment period in relation to the scheme within the meaning of Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (SI 2005/255 (N.I. 1)) , or

(b) the scheme is operating as a closed scheme under Article 137 of that Order.

(7) The powers of the Board of the Pension Protection Fund under Article 118 and 139 of the Pensions (Northern Ireland) Order 2005 to give directions include power to give a direction to the trustees or managers of the scheme requiring them—

(a) to make a request under subsection (3)(a) in relation to a potentially remediable alteration to the scheme, and

(b) to take any necessary action to enable or facilitate the making of a decision by the actuary as to whether to give the confirmation described in subsection (3)(b) in relation to that alteration.”—(Torsten Bell.)

This new clause makes provision for Northern Ireland corresponding to NC24.

Brought up, read the First and Second time, and added to the Bill.

New Clause 29

Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases

“(1) This section applies to any potentially remediable alteration purportedly made to the rules of—

(a) a scheme which has been wound up before this section comes into force,

(b) a scheme for which the Board of the Pension Protection Fund has, before this section comes into force, assumed responsibility in accordance with Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (see Article 145 of that Order), or

(c) a scheme which is a qualifying pension scheme for the purposes of regulation 9 of the Financial Assistance Scheme Regulations 2005 (SI 2005/1986) and in respect of which payments are required to be made under section 286 of the Pensions Act 2004.

(2) The alteration is be treated for all purposes as having met the requirements of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made and so as having always been a valid alteration so far as those requirements are concerned.”—(Torsten Bell.)

This new clause makes provision for Northern Ireland corresponding to NC25.

Brought up, read the First and Second time, and added to the Bill.

New Clause 30

Powers to amend Chapter 1 etc: Northern Ireland

“(1) A Northern Ireland Department may by regulations amend any of sections (Sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc: Northern Ireland): interpretation and scope), (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases) for the purpose of providing for purported alterations of any specified description not to be within the scope of remediation under either or both of sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) and (Validity of certain alterations to NI salary-related contracted-out pension schemes: wound up schemes and other special cases).

(2) In subsection (1) ‘specified’ means specified in the regulations; and a specified description of purported alterations may be framed by reference to features of the alterations or of the schemes purportedly altered by them (or a combination of both).

(3) A Northern Ireland Department may by regulations make incidental, supplementary, consequential or transitional provision in connection with any provision of this Chapter (other than section (Powers to amend Chapter 1 etc: Great Britain) and this section).

(4) Regulations made under this section are subject to negative resolution within the meaning given by section 41(6) of the Interpretation Act (Northern Ireland) 1954.

(5) The power of a Northern Ireland Department to make regulations under this section is exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)).”—(Torsten Bell.)

This new clause enables regulations made for Northern Ireland (a) to specify further categories of alterations in respect of which the clauses validating otherwise void alterations do not apply and (b) to make incidental, supplementary, transitional or consequential provision relating to any provision of the new Chapter addressing the validity of alterations to pension schemes.

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Universal Pension Advice Entitlement

“(1) The Secretary of State must by regulations establish a system to ensure that every individual has a right to receive free, impartial pension advice at prescribed times.

(2) Regulations under subsection (1) must provide for individuals to be offered advice—

(a) at or around the age of 40; and

(b) at a prescribed age, not more than six years before the individual's expected retirement age.

(3) The regulations must make provision about—

(a) the content and scope of the free, impartial pension advice, which may include, but is not limited to, guidance on—

(i) pension types (including both defined contribution and defined benefit schemes),

(ii) investment strategies,

(iii) charges,

(iv) consolidation of pension pots, and

(v) retirement income options;

(b) the qualifications, independence, and impartiality requirements for any person or body providing advice;

(c) the means by which individuals are notified of their entitlement to receive the advice and how they may access it;

(d) the roles and responsibilities of pension scheme trustees, managers, and providers in facilitating access to advice;

(e) the sharing member information with prescribed persons or bodies subject to appropriate data protection safeguards.

(4) Regulations under this section may—

(a) make different provision for different descriptions of pension schemes or different descriptions of individuals;

(b) confer functions in connection with the provision or oversight of the advice on—

(i) the Pensions Regulator,

(ii) the Financial Conduct Authority,

(iii) the Money and Pensions Service, or

(iv) other prescribed bodies;

(c) require the provision of funding for the advice service from prescribed sources.

(5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”—(John Milne.)

This new clause makes provision by regulations for everyone to receive free, impartial pension advice at age 40 and again around five years before their expected retirement.

Brought up, and read the First time.

[John Milne]

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

Pension Schemes Bill (Eighth sitting)

Torsten Bell Excerpts

Thursday 11th September 2025 Public Bill Committees

[David Pinto-Duschinsky]

As ever, my hon. Friend is absolutely right and his intervention goes to a third point: this also feels a bit premature.

As my hon. Friend mentioned, we are in the midst of the incredibly important advice and guidance boundary review. For many of the groups that we want to help, advice might not actually be the right solution, but guidance might be, and we are in the midst of re-tooling that. Similarly, we are in the midst of rolling out dashboards, which will transform the landscape but not fix the problems on their own; we may need to layer new policy initiatives on top. It seems that we are at risk of putting the cart before the horse.

I also add that when I read new clause 1 in detail, I saw that it refers to “advice”. On my reading, that would constrict potential policy responses and force the Government to go down the advice route, rather than provide other services that might be on offer through the advice and guidance boundary review.

The intention is good. I think there is huge consensus on the need to tackle the problem, but the right way to do it is through sophisticated and proper policy making, rather than the blunt instrument of amending primary legislation. For those reasons, I oppose this new clause.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

I thank the proposers of these new clauses. I will take them in the way they were intended—to spark debate.

We have had quite a wide debate and I think there is consensus on the subject, but I want to put a slightly different spin on the problem statement we are talking about. We have come at a lot of the discussion on the new clause as if there is too little advice. I would slightly reframe the question when it comes to pensions, which is that there is too much complexity, and too little advice or guidance. I think that is the right way to think about the problem that we are confronting with the system as a whole.

I will broadly outline our approach to try to tackle that problem statement. The task is to reduce the complexity as well as to increase the guidance and the advice that are available. Having watched the pensions debate over the past 15 years, I have observed that we have too often made pensions more complicated, and then said, “If we only had this advice, it would all be fine.” I do not think that is the right answer. That is a mistake about the nature of the system that we are delivering.

Our job is to reduce the complexity, or to reduce the consequences of it being difficult for people to deal with. That is obviously what a lot of the Bill is trying to do. With small pots, the aim is obviously to reduce complexity. That is what the value for money measures are designed to do. Seen through that lens, they are also aimed at reducing the costs of that complexity. The value for money regime is there to reduce the consequences of it being difficult to engage with and members not choosing their own provider.

[Mark Garnier (Wyre Forest) (Con)]

The Minister raises an interesting point. We have talked about a lot of different bits and pieces with complexity and all the rest of it. We have not spoken about when we educate people about money.

In the olden days, when I was a newly elected MP, I was one of the chairs of the all-party parliamentary group for financial education for young people. That was about getting financial education into the curriculum. It is probably now more important than ever that we teach people of school age about the importance of financial planning, including pensions. Can the Minister assure the Committee that he will take up with his colleagues in the Department for Education the changes that could be made to bring this type of education into the curriculum for kids, who are all going to be adults soon?

[Torsten Bell]

I shall take that up directly with the new Economic Secretary to the Treasury, who I am sure will talk to her colleagues in the Department for Education. I can offer the hon. Member some entirely anecdotal optimism on that issue. Whenever I now do school events in Swansea, I am seeing very high levels of financial engagement. After I have given a very worthy speech, most of the questions are not about how to reduce inequality but instead are about personal financial advice. I think the youth of today are all over it—that is my lived experience.

I have mentioned small pots and value for money. I want to flag two other areas. Dashboards have been mentioned, and they are a very large part of how we provide support. The default pensions solutions are crucial to reducing complexity, and that is probably the biggest measure in the Bill. The need to provide more advice or guidance for people to access their defined-contribution pots is reduced significantly because of the existence of default solutions. We definitely still want people to have access to advice and the ability to opt out of those defaults, but default solutions help significantly. That is why the communication of those default pension solutions, which we discussed quite extensively, is so important for people. That is why that is in the Bill.

We have touched on making more support available. We have universal access for people of any age to free impartial support through MoneyHelper—that is what the Money and Pensions Service is providing—and we have a specific focus on support for over-50s in Pension Wise. Several hon. Members have said, absolutely rightly, that access to financial advice fell in the aftermath of the reforms over a decade ago, but there is some better news on Pension Wise. The 2024 Financial Lives survey showed that of those who accessed a defined-contribution pot within the last four years, 40% had accessed Pension Wise. I think that is probably more than most hon. Members in this debate would expect, though it may not be enough. However, those people had used Pension Wise when heading towards access; they had not used it as a mid-life MOT product, which is a different thing. That 40% was up from 34% in 2020, so some things have gone in the right direction. I am gently noting that, not claiming any credit for it because it predates the election. There is a lot of overlap between what those systems of advice are providing and the measures in new clause 1.

Regarding new clause 40, I absolutely agree on how we think about under-saved groups. The groups identified in the new clause are more or less the same groups of people experiencing financial wellbeing challenges whom MaPS targets, so that is a point of consensus, but I am absolutely open to suggestions of what more we can do to make sure that we are tackling that issue. The Pensions Commission is considering the wider question of adequacy, which is why we are looking at not just average adequacy but the fairness of the system.

[Kirsty Blackman (Aberdeen North) (SNP)]

Will the Minister give a commitment that the commission will specifically look at groups that are less likely to have a sufficient pension, rather than just looking at an average and increasing that average?

[Torsten Bell]

I can absolutely give that guarantee, because that is in the terms of reference of the Pensions Commission. I will come back to the wider question of the commission in one second. I will not go into detail, but targeted support is a large part of providing more guidance, and we expect the roll-out of that early next year. There is more coming in that space; we are not relying solely on MaPS.

How should we think about the interaction of dashboards and bigger DC pots? At the moment, for lots of people entering their retirement, their DC pot may be a smaller part of their overall pension income, but as we move forward, it will become the large majority of their income. That will be very visible because of dashboards. One of the reasons MaPS has been reluctant —although I do not want to say “reluctant”—to promise to deliver the kind of automatic enrolment that is being discussed by the Committee is that a lot of planning work is under way to make sure that when dashboards come online, MaPS is ready and set up to deal with the significant increase in demand for help and in engagement that may come from that. The experience of some pension schemes in Australia is that as pension pots become bigger, there is much more demand for support and guidance. We should expect that demand to grow in the years ahead with or without dashboards, but definitely with dashboards and the other measures together.

[Kirsty Blackman]

When dashboards increase engagement, as we all expect they will, will the Minister report back to the House, or encourage someone to report back to the House, on how much engagement has increased by, so that we all have an awareness of it, rather than it being in stats kept in the background that we do not know about?

[Torsten Bell]

Absolutely. I think we will want to look at the impact across a range of measures of engagement. Do dashboards help consolidation of pots? Do they encourage people to save more? We also need to be aware of riskier behaviours that dashboards could trigger. We are currently engaged in significant user testing of the system to make sure that we have done what we can to make sure that when people have visibility of their pension pots, they do not adopt behaviours that we do not want.

On the question about the Pensions Commission from the angle of the advice and guidance sector, it is an independent commission so I cannot speak for it. However, I think the commission will have heard the focus of that question, and the length of this debate in Committee.

Turning to the specific question put by the hon. Member for Horsham on what he said was the purpose of this group of new clauses, I assure him that my mind has been entirely focused by him on this issue, and that I will continue to talk to MaPS about what further lessons there are to learn.

--- Later in debate ---

[Kirsty Blackman]

My understanding is that new clause 2 calls for a report. It addresses transparency. It is all well and good that stuff on competition regulations is published—I have no idea where it is published. We are asking for a report to the House, which we would all be able to access. I did not write the new clause, but it would be helpful if the Minister agreed to transparency and to review this in good time so that we can make better decisions on future legislation.

[Torsten Bell]

The first thing to say is that this is focused on scale. We appreciate that the Bill would lead to major changes to the pensions market—the hon. Member for Torbay is absolutely right—and we want to understand and monitor the consolidation and scale process over the coming years. To state the obvious, market changes such the scale measures we are talking about take time, and many of the measures in the Bill will not even be implemented within the 12 months. On that basis, I hope that the hon. Gentleman will not push the amendment to a vote.

I agree on the wider point about the Bill as a whole and the need for strong monitoring and evaluation. I would probably take a slightly different approach from the hon. Member for Aberdeen North. The Bill contains a large number of measures, and the right way to monitor their implementation will be different for different parts of the Bill. When it comes to the questions of scale, which are the focus of this amendment, the monitoring—[Interruption.] That is not the response I was looking for. The monitoring is slightly more visible because we are talking about the number of workplace schemes, or at least workplace defaults, that exist.

Let me lay out a bit of what we have in place to monitor. We will be able to monitor scale, charges and, because of the interaction with the value for money regime, returns and asset allocation. Lots of the key success metrics that are meant to come with the scale changes, as well as the delivery of scale itself, will be visible. My honest view is that it is on all of us—obviously, it is particularly on the Government—to pay attention to that as we go.

On the wider question of whether we will consider further, I have already committed to do that and to come back and reflect on Report on how we do that. I put on the record my view that that is a reasonable thing to do, and I will do it, but we need to think about it differently for different parts of the Bill.

[Steve Darling]

I thank the Minister for putting his thoughts on the record. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 5

Report on fiduciary duty and discretionary indexation of pre-1997 benefits

“(1) The Secretary of State must, within 12 months of the passing of this Act, publish a report on whether the fiduciary duties of trustees of occupational pension schemes should be amended to permit discretionary indexation of pre-1997 accrued rights, where scheme funding allows.

(2) The report must consider—

(a) the impact of current fiduciary obligations on trustees’ ability to award discretionary increases to pre-1997 pension benefits;

(b) the potential benefits of permitting such discretionary indexation for affected pensioners;

(c) the funding conditions and thresholds under which discretionary indexation could be considered sustainable;

(d) the appropriate level of regulatory oversight and guidance required to ensure that discretionary increases are granted in a fair, transparent, and financially responsible manner;

(e) international approaches to indexation of legacy pension benefits;

(f) the legal and actuarial implications of amending fiduciary duties in this context.

(3) In preparing the report, the Secretary of State must consult—

(a) the Pensions Regulator,

(b) the Financial Conduct Authority,

(c) representatives of pension scheme trustees, members, and sponsoring employers, and

(d) such other experts or bodies as the Secretary of State considers appropriate.

(4) The Secretary of State must lay a copy of the report before both Houses of Parliament.”—(Steve Darling.)

This new clause requires the Secretary of State to report on whether the fiduciary duties of trustees of occupational pension schemes should be amended to permit discretionary indexation of pre-1997 accrued rights, where scheme funding allows.

Brought up, and read the First time.

--- Later in debate ---

[Mark Garnier]

I want to follow on from the two powerful speeches by the Liberal Democrat and SNP spokespeople, the hon. Members for Torbay and for Aberdeen North, in highlighting the fact that this problem is—dare I say it—disappearing over time. This feels slightly similar to the ongoing contaminated blood debate, and it is a similar type of thing. The people who would be compensated for the contaminated blood are, for tragic reasons, disappearing. Indeed, I think there are now 86,000 pensioners who were caught up in this particular problem, and the longer this is kicked down the road, the smaller the problem will become, for obvious reasons.

The principle behind this is absolutely right. It is incredibly important that we as a country, society and community look after all these people. Where people have done the right thing and put money into their pension, but it has not followed through, that is a big problem.

One thing does bother me: I do not want to be too political, but the Government have dug themselves a freshly made £30 billion black hole in the last year. Although the SNP spokesperson is absolutely right that the £12 billion in the PPF is available to spend only on pensions, the problem is that because it appears on the country’s balance sheet, if the money to pay the price for this—I think it is £1.8 billion—came out of that, there would be a £1.8 billion increase on the country’s collective balance sheet. The argument would go that it would then reduce it. At some level, fiscal prudence has to come in to make sure we are not creating a deeper black hole. Because of the change of accounting at the back end of last year, this could turn the Government’s £30 billion fiscal black hole into a £32 billion one, even though that money is earmarked only for pensions.

I would like to hear from the Minister how the Government will resolve that. I would like him to make an undertaking that we will hear something about it on 26 November, and that there will be something in the Budget to resolve this fiscal conundrum. We need to know where the money will come from, and that the Government have set it aside. This is a perfect opportunity to deal with a problem that has been going on since 1997, and that becomes more profound every time the Office for National Statistics announces the rate of inflation. If the Minister gave us that assurance, I would trust him—being an honourable and decent man—that he could make his current boss get something done about this on 26 November.

[Torsten Bell]

Despite the hon. Member’s kind invitation, and as he well knows, I am not about to start commenting on the Budget—something I have heard him say himself many times over the years in his previous roles.

More seriously, the last 50 years tell us that the question of pension uprating is a big deal and very important. By “uprating”, I mean how pensions keep pace with earnings or prices. Obviously, on the state pension we tend to talk in terms of earnings. It is a big issue. The lesson of the 1980s and 1990s was about rising pensioner poverty at a time when the state pension was not earnings indexed but earnings were growing significantly. That is why we ended up with 30% or 40% pensioner poverty during those years. History tells us that those things are important. History aside, they are also obviously important for individuals, as we heard at the evidence session.

[Luke Murphy (Basingstoke) (Lab)]

I want to add my voice and the calls of my constituents for that issue to be addressed and tackled. I have been contacted by several constituents, one of whom has lost up to 70% of the value of their occupational pension. I add my voice to those calling for the Government to do what they can to address this issue, which I know the Minister recognises is having a huge impact on many people’s lives.

Roger Sainsbury, among others, raised the issue in the evidence session. He said that he had confidence that the Government would come up to the mark and find a way through the perceived difficulties. I seek reassurance from the Minister on behalf of my constituents that the Government will do all they can to ensure that that is the case.

[Torsten Bell]

I thank my hon. Friend for his questions. Let me come to the two halves; two different issues are actually being raised in these amendments and I want to make sure that we deal with them separately.

New clause 5 deals with discretionary increases for schemes that have not fallen into the PPF—those with solvent employers. Here, as I said in the surplus discussion, the changes on surplus provide a new route for trustees who do not have the power to make those discretionary increases off their own bat to discuss with employers discretionary increases on pre-1997 pension accruals. It is also clear that we need to understand this issue well. The Pensions Regulator has been engaging in surveys on this issue for exactly that reason and will continue to do so. Overall, my argument is that, for those schemes still operating, we are not going to be in the business of legislating to overwrite scheme rules when it comes to whether schemes had indexation in them pre-1997.

Questions of the PPF and FAS represent an important debate, as we heard last Tuesday—I answered questions about that then, and I will not pain everyone by repeating my answers.

New clauses 18 and 19 would not work. The new clauses as drafted would apply to subsets of the PPF population. Some pensioners would receive indexation, and some would not. The same flaws in the new clauses apply to FAS. We will definitely be opposing the new clauses, but that is without regard to the wider questions, which, as I said, I commented on last Tuesday.

--- Later in debate ---

[Torsten Bell]

I thank the hon. Member for Torbay, who has just left us, for moving new clause 7. To clarify, it would require the Secretary of State to commission an independent review into the police pension scheme on these particular issues. I know this will be a matter of cross-party consensus, but the most important thing is to stress the value placed on the contribution of police officers across the country. I see them every day, particularly in the centre of Swansea, and they play a really important role.

The rules providing for the cessation of survivor benefits, where a survivor remarries or cohabits, are typically features of legacy public service pension schemes, and we are discussing the 1987 police pension scheme in this case. Reformed public service pension schemes do not include these challenges, as we have moved away from a system with significant inheritable rights. The same also applies to the new state pension system introduced under the coalition Government, which does not include the same degree of inheritability as the basic state pension did.

I want to take a similar approach to the many issues that will be raised in such calls for reviews. It is really important for me to be clear about why we do not support reviews into these schemes—particularly in this case, where it closed 20 years ago—as I do not want to raise expectations that will not be met. That would be deeply unhelpful to people who have been campaigning on this issue for many years.

In this particular case, there is the principle that we will not retrospectively legislate to change the terms of pensions far in the past, around 20 years ago. I am saying this very gently, but the reality is that my position is shared by most parties in this House. If the coalition Government, made up of a Liberal Democrat Pensions Minister and other Conservative Ministers, had wanted to resolve these issues and take an approach different from the one I am setting out today, they would have done it in a previous Parliament.

The last thing I want to do is give false expectations to people who often face consequences from the terms of these pension schemes—terms I do not support, but that is why they have ceased to be part of modern pension schemes. I do not want to give false certainty that we will start reopening public service pension schemes from decades ago. That would lead to false expectations, and that is the last thing we should be doing.

On that basis, we will not be supporting the new clause, but I understand the case that people have made and why people are raising it in this place. As I say, that is our approach to this issue.

[John Milne]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 8

Independent review into pension losses incurred by former employees of AEA Technology

“(1) The Secretary of State must, within three months of the passing of this Act, commission an independent review into the pension losses incurred by former employees of AEA Technology who—

(a) transferred their accrued pension benefits out of the UK Atomic Energy Authority (UKAEA) public service scheme to AEA Technology (AEAT) on privatisation in 1996, and

(b) suffered financial losses when AEA Technology went into administration in 2012 and the pension scheme entered the Pension Protection Fund (PPF).

(2) The review must examine—

(a) the extent and causes of pension losses incurred by affected individuals,

(b) the role of Government policy and representations in the transfer of pensions during the privatisation of AEA Technology,

(c) the findings of the Public Accounts Committee and the Work and Pensions Select Committee,

(d) the adequacy of safeguards provided at the time of privatisation,

(e) potential mechanisms for redress or compensation, and

(f) the estimated financial cost of any such mechanisms.

(3) The review must be—

(a) conducted by an independent panel appointed by the Secretary of State, with relevant expertise in pensions, public policy, and administrative justice, and

(b) transparent and consultative, including engagement with affected pensioners and their representatives.

(4) The panel must report its findings and recommendations to the Secretary of State and lay a copy of its final report before Parliament within 12 months of its establishment.

(5) The Secretary of State must, within 6 months of the publication of the report under subsection (4), lay before both Houses of Parliament a statement setting out the Secretary of State’s response to that outcome.”—(John Milne.)

This new clause would require the Secretary of State to commission an independent review into the pension losses incurred by former employees of AEA Technology.

Brought up, and read the First time.

[John Milne]

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

The new clause would require the Secretary of State to commission an independent review into pension losses suffered by former employees of AEA Technology. It focuses on employees who transferred benefits from the UK Atomic Energy Authority to AEA on privatisation in 1996, and who later suffered losses when the company went into administration. Many former employees experienced significant losses due to circumstances beyond their control, and this review would ensure a transparent, evidence-based assessment of what went wrong. It would also hopefully provide a structured way to explore redress or compensation options for affected pensions.

To summarise, the new clause would ensure that lessons were learned and safeguards were strengthened for future privatisations and pension transfers. We move it in the hope that the Minister will put his thoughts on the record, so that campaigners can at least see them—like them or not, they will know where he stands.

[Torsten Bell]

I reiterate my overall approach to the issues being raised in relation to historical cases, but we all recognise the difficult position that members of this particular scheme found themselves in. Many scheme members who move into the PPF receive a lower pension than they were otherwise expecting, and I think we are all sympathetic.

The hon. Member will be aware that there have been many reviews of this case, including by the Public Accounts Committee, the Work and Pensions Committee and, obviously, the Pensions Ombudsman. The coalition did not act on this particular case, and I do not want to raise expectations that we are going to reopen it now, given the number of reviews that have already taken place.

However, I can offer slightly more reassurance to the hon. Member going forward. He will be aware of changes in policy that mean that, when there are privatisations of the kind that sits behind this challenging case, workers will remain in public service pension schemes. They would not be moved across into another scheme. That is obviously what sits behind anxieties about the transparency of the advice provided in this case. I hope that that offers the hon. Member the kind of reflection that he asked for, but we are not in a position to support the new clause.

[John Milne]

I thank the Minister for his observations, and I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 9

Independent review into state deduction in defined benefit pension schemes

“(1) The Secretary of State must, within three months of the passing of this Act, commission an independent review into the application and impact of state deduction mechanisms in occupational defined benefit pension schemes.

(2) The review must consider—

(a) the origin, rationale and implementation of state deduction in the Midland Bank Staff Pension Scheme,

(b) the clarity and adequacy of member communications regarding state deduction from inception to present,

(c) the differential impact of state deduction on pensioners with varying salary histories, including an assessment of any disproportionate effects on—

(i) lower-paid staff, and

(ii) women,

(d) comparisons with other occupational pension schemes in the banking and public sectors, and

(e) the legal, administrative, and financial feasibility of modifying or removing state deduction provisions, including potential mechanisms for redress.

(3) The Secretary of State must ensure that the person or body appointed to conduct the review—

(a) is independent of HSBC Bank plc and its associated pension schemes;

(b) possesses relevant expertise in pensions law, occupational pension scheme administration, and equality and fairness in retirement income; and

(c) undertakes appropriate consultation with—

(i) affected scheme members,

(ii) employee representatives,

(iii) pension experts, and

(iv) stakeholder organisations.

(4) The person or body conducting the review must—

(a) submit a report on its findings to the Secretary of State within 12 months of the date the review is commissioned; and

(b) the Secretary of State must lay a copy of the report before Parliament and publish the report in full.

(5) Within three months of laying the report before Parliament, the Secretary of State must publish a written response setting out the Government’s proposed actions, if any, in response to the report’s findings and recommendations.

(6) For the purposes of this section—

‘state deduction’ means any provision within a defined benefit occupational pension scheme that reduces pension entitlements by reference to the member reaching state pension age or by reference to any state pension entitlement;

‘defined benefit pension scheme’ has the meaning given in section 181 of the Pension Schemes Act 1993;

‘Midland Bank Staff Pension Scheme’ includes all associated legacy arrangements and any successor schemes administered by HSBC Bank Pension Trust (UK) Ltd.” —(John Milne.)

This new clause would require the Secretary of State to commission an independent review into clawback provisions in occupational defined benefit pension schemes, in particular, the Midland Bank staff pension scheme.

Brought up, and read the First time.

[John Milne]

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

New clause 9 would require the Secretary of State to commission an independent review into the application and impact of state deduction mechanisms in occupational defined benefit pension schemes. It focuses specifically on clawback provisions in the Midland bank staff pension scheme and associated legacy arrangements.

We believe that a review is needed because state deduction provisions can reduce members’ pension entitlements, sometimes in ways that are complex or unclear. There are concerns about fairness, transparency and disproportionate impact, particularly on lower-paid staff and women. A review would ensure that members, regulators and Parliament had clarity about the origin, rationale and effect of such provisions.

The review would examine the history and rationale for the deductions, assess the clarity and adequacy of member communications over time, analyse differential impact on pensioners with varying salary histories, and compare state deduction practices with other occupational schemes in banking and the public sectors. It would also consider the legal, administrative and financial feasibility of modifying or removing state deduction provisions. Finally, it would be an independent and consultative process. The clause would ensure transparency and fairness, and it would provide Parliament and Members with clear, evidence-based guidance on the way forward.

[Torsten Bell]

I am conscious that there was a debate in the main Chamber on this issue before the summer recess, when we were able to go into the issue in much more depth. The debate related to integrated pensions, but in that context people are usually referring to the HSBC historical pension scheme in particular. Without rehearsing everything I have said about our not being in the business of promising to change pension scheme rules, schemes have wide discretion about the nature of their rules and the entitlements that scheme members accrue. It is not for the Government to change those.

The law is very clear that the Government require transparency, just as the hon. Member for Horsham called for, and that includes clear communication of what the entitlement from any given pension scheme is, including issues to do with what is referred to as integrated pensions or clawback pensions. People do have to have received communication that spells that out. The role of the Pensions Ombudsman is to check that that has happened. That is where people can go if they feel that they have not received clear communication about what their scheme entitlements were.

I think we can all understand that if anybody started to receive a pension and was shocked to see a deduction in it when they went over the state pension age, that would be very significant for them. It is the job of the Pension Ombudsman to investigate cases such as that.

[John Milne]

I thank the Minister and beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 10

Use of electronic mail for direct marketing purposes relating to pensions

“(1) Section 22(3) of the Privacy and Electronic Communications (EC Directive) Regulations 2003 is deemed to apply to unsolicited electronic communications relating to pensions when the sender is—

(a) a firm authorised to provide Targeted Support under Article 55A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 issuing a Targeted Support communication, or

(b) a qualifying pension scheme, as defined in section 16(1) of the Pensions Act 2008.

(2) Subsection (1) applies when the recipient is—

(a) a customer of the firm under subsection (1)(a), or

(b) a member of the pension scheme under subsection (1)(b).” —(John Milne.)

This new clause would require that the provisions relating to the use of electronic mail for direct marketing purposes under the Privacy and Electronic Communications *(EC Directive) Regulations 2003 would apply to communications from firms providing targeted support on pensions or from qualifying pension schemes.

Brought up, and read the First time.

[John Milne]

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

New clause 10 would require that provisions relating to the use of electronic mail for direct marketing purposes would apply to communications from firms providing targeted support on pensions or from qualifying pension schemes. That matters because pension savers deserve protection from unwanted or misleading marketing, especially when they may be vulnerable to scams. I used to work in direct marketing, so I feel a little bit guilty.

[Torsten Bell]

That is impressive honesty.

[John Milne]

Obviously, all mine were absolutely above board. Currently, the privacy and electronic communications regulations do not clearly cover pension-related marketing from schemes or targeted support firms. This new clause seeks to close that loophole. People should be able to trust that communications from their scheme or adviser are genuine and not just spam dressed up as guidance. We would position this as a balance, so that legitimate communications to scheme members remain possible, but only within clear safeguards. In summary, it is a simple consumer protection measure that would protect savers from nuisance emails and potential mis-selling.

--- Later in debate ---

[Rebecca Smith (South West Devon) (Con)]

I have a query off the back of the comments of the hon. Member for Aberdeen North.

We heard in the evidence sessions that there is a danger that overdoing the requirements for marketing will get in the way of providing guidance. That came up directly in the response to some of our questions, I think specifically from Legal and General and Aviva. Companies are already in a position where, if they are not careful, offering guidance is considered marketing. Therefore, they do have their hands tied by existing legislation.

I am slightly intrigued why this new clause has been tabled, given that Liberal Democrat colleagues will have also heard that evidence. More work is needed on this issue than just adding a new clause to the Bill; I heard from the hon. Member for Hendon that there is a consultation.

Although I understand the point about protecting vulnerable customers from scamming, I feel the evidence we heard demonstrates that more work is needed, work that is not included in the Bill, to make sure that pension companies are able to advertise in such a way that they can play their part in the guidance process that we have debated at length, and in how people get that financial education.

I understand the premise of the new clause, but we have many more questions to answer on this. If anything, I think we need to be making it easier for pension companies, the legitimate people in the room, to be able to communicate. There could be unintended consequential issues; we are trying to deal with scammers, but we might inadvertently stop people accessing information that we are trying to help them to receive.

[Torsten Bell]

Let me attempt to offer some words of clarification and then come to what the Government are doing on this issue.

To clarify, pension schemes are covered by the rules on direct marketing already. I think the new clause as drafted would probably have the opposite effect to what the hon. Member for Horsham intends, by carving out pension schemes from the limitations on direct marketing. That would be a loosening of the direct marketing restrictions for pension schemes. There are people in the industry that have been calling for exactly that, so that may be where the new clause is coming from, but I clarify that they are covered; the direct marketing rules prevent pension schemes from behaving in those kinds of ways.

What is the context here? We are obviously aware of concerns that the existing direct marketing rules, which apply to pension schemes, may limit providers’ ability to deliver the new targeted support regime that is being developed by the Government, exactly as the hon. Member for South West Devon has just set out. Under targeted support, FCA-authorised firms will be able to proactively suggest appropriate products or courses of action to customers. That could help people to make decisions about access to their pension, but it obviously needs to be done in the right way.

We have heard the feedback from stakeholders on the interaction between that wish for targeted support and direct marketing rules, which is where most of the debate on this area has been. Because targeted support involves recommending specific courses of action, it could be considered direct marketing. That is the cause of the tension.

There are particular issues for pension providers who administer auto-enrolled members, where the individual has not chosen the pension scheme or engaged with them. As a result of that, they cannot generally satisfy the requirements of what is called the soft opt-in, because the provider has not collected the information from the individual at the point at which they were enrolled—it has gone through the employer.

What are we doing about that? We are examining quite a range of policy options at the moment. That includes legislative change, which can probably be done via secondary legislation. I think that is the right way for us to proceed. When we do that, we need to get the balance between enabling targeted support and making sure that we do not have inappropriate direct marketing within the pension space. I definitely would not want to see a carve-out from all direct marketing rules for the pension sector as a whole, as there are risks that come with that. I hope that gives Members some clarity and an explanation of what the Government are doing to take this issue forward.

[John Milne]

I thank the Minister for his clarification, and I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

[Kirsty Blackman]

On a point of order, Ms Lewell, I am aware that I cannot make a speech at this point, but will the Minister write to me on whether he is planning to do anything about pre-1997 indexation of the PPF and FAS? If he writes to me about that, I will be happy not to push new clause 18 to a vote.

[Torsten Bell]

I suspect that I have already written to the hon. Lady, because she has raised some constituency cases with me, but she can receive another one of those letters.

New Clause 33

Report of defined benefit schemes impact on productivity

“(1) The Secretary of State must, within 12 months of the passing of this Act, publish a report on the impact on corporate productivity of defined benefit schemes.

(2) The report must include an assessment of—

(a) investment strategies of defined benefit funds,

(b) the returns on investment of defined benefit funds, and

(c) the impact of investment strategies and returns on productivity.

(3) The Secretary of State must lay a copy of the report before both Houses of Parliament.”—(Mark Garnier.)

This new clause would require the Government to commission a report on the impact on corporate productivity of defined benefit schemes.

Brought up, and read the First time.

[Mark Garnier]

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

--- Later in debate ---

In summary, the new clauses collectively seek to address concerns about the impact of DB pension scheme deficits on business and economic productivity. By requiring Government evaluation, revising accounting recognition rules and providing alternative disclosure methods, the new clauses aim to balance the protection of pension members’ interests with support for business investment and growth. I am sure that at the very least when we press new clause 33 to a vote, there will be enthusiasm to support it from the hon. Member for Hendon, because it absolutely responds to the point he made on Tuesday.

[Torsten Bell]

I am grateful to the hon. Member for Wyre Forest for tabling the new clauses, and for his impressive consistency; he has spoken to this issue many times not only in this Committee, but elsewhere, and I have heard him. I agree on some of the wider issues he is raising, particularly his reflections on some of the impacts of decisions taken in the late 1990s. Before I come to the more technical responses to the new clauses, the hon. Member’s objective is to see different investment approaches taken by defined-benefit schemes. Many issues that were historically the case have been removed by the passing of time, because they are now closed schemes whose investments are now changing for other reasons, not because of the questions of regulatory pressure in the 1990s and so on. I leave that as an aside.

To give the hon. Member a bit more optimism, based on the Bill, I already have schemes saying to me that they may take different approaches on investments because of the option of a surplus release. That gives a different incentive structure for employers about what they wish to see their pension schemes doing, and for trustees, if there is a sharing of the benefits of upside risk that comes with that. I have had several large employer’s pension schemes raising that issue with me in the recent past. That is to give him some case for optimism to set against the long-term pessimism.

I will turn to the details of the new clauses. New clause 33 would require the Government to produce and lay a report before both Houses of Parliament, with an assessment of the investment strategies of defined-benefit pension schemes and their impact on productivity.

There is already a requirement for defined-benefit schemes to produce much of that information in their triennial valuation and to submit key documents to the Pensions Regulator, including information on investments and changes in asset allocations over time, so the regulator has much of the information already. In addition, multiple reports are already produced annually on defined-benefit schemes and their investments. The purple book is the most obvious example; it is produced by the Pension Protection Fund. I know that everybody here will be an avid reader of it; I promise people that it is reasonably widely read, including in the City.

New clause 34 seeks to change the arrangements for reporting defined-benefit pension scheme liabilities in the employer’s accounts. I am impressed by the wish of the hon. Member for Wyre Forest for us to engage in a Brexit from international financial reporting standards, but he will be unsurprised to learn that the Government are not about to do that. These are globally recognised financial reporting frameworks that allow comparability, and we are not in the business of changing them.

New clause 35 would require the Secretary of State to introduce an alternative basis to disclose schemes’ funding deficits. The Pensions Act 2004 put in place the current regime for valuations. Our view is that that approach has taken some time to implement but it is now well understood and well established, so leaving it in place is by far the best thing that we can do, while also considering in more detail the consequences of other things that drive the choices of pension schemes. On that basis, I encourage the hon. Member for Wyre Forest to withdraw the new clause, and I certainly do not expect to see my hon. Friend the Member for Hendon support it.

[Mark Garnier]

I am partially reassured by the Minister’s comments, but it really comes down to the kindness of my heart—I would not want the hon. Member for Hendon to be pulled off the Committee and put in an awkward situation. It would be unfortunate to force him to fall out with the Whips so early in his parliamentary career, so I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 37

Review of impact of this Act

“(1) Within five years of the passing of this Act, the Secretary of State must carry out a review of the impact of the provisions of this Act on actual and projected retirement incomes.

(2) The review must consider—

(a) the impact of the provisions of this Act on actual and projected retirement incomes, and

(b) whether further measures are needed to ensure that pension scheme members receive an adequate income in retirement.

(3) The Secretary of State must prepare a report of the review and lay a copy of that report before Parliament.”—(Mark Garnier.)

This new clause would require the Secretary of State to prepare a report on the impact of this Act within 5 years of its passing.

Brought up, and read the First time.

--- Later in debate ---

[Mark Garnier]

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

Under new clause 37, the review of the impact of the Act would focus on pensions adequacy. The current Government plan to delay the comprehensive consideration of pensions adequacy to future phases of the pensions review. Any resulting reforms from those future evaluations are projected to take several years to develop and implement, and there is widespread concern that without a mandated regular review process, inadequate pension outcomes will persist. Millions of people in the UK therefore risk having insufficient retirement income, particularly lower earners, ethnic minorities, the self-employed and those with interrupted careers.

Automatic enrolment has expanded workplace pension participation and now covers over 88% of eligible employees, but significant savings shortfalls remain. Recent forecasts and analysis warn of a retirement crisis, with many future pensioners expected to have less income than today’s retirees unless action is taken. The Government’s renewed Pensions Commission is due to report in 2027, focusing on the adequacy, fairness and sustainability of the retirement framework, but that report will only come in 2027.

The new clause would create a statutory obligation for the Secretary of State to conduct a full review within five years of the Bill’s passage, focusing on its impact on actual and projected retirement incomes. It would require an assessment of whether current policies and contribution levels are sufficient to ensure adequate retirement incomes. The Secretary of State would have to report the findings to Parliament, increasing accountability and transparency. That would formalise an ongoing review cycle to monitor pension adequacy regularly, preventing the consideration of the issue being indefinitely postponed.

As we all know, pension adequacy is vital to preventing poverty in later life and to ensuring quality of life for retirees. Despite expanded coverage through auto-enrolment, however, many people are still on track to fail to meet retirement income targets. Financial resilience frameworks show disparities in adequacy among lower earners, women and other vulnerable groups, and current retirement income depends on a number of variables, including contribution, sufficiency, investment returns, longevity and state pension level.

The new clause would ensure that the Government take responsibility to monitor and report regularly on pension adequacy outcomes. It would mandate a formal review mechanism, enhancing policy responsiveness and parliamentary oversight. Ultimately, it aims to safeguard millions of future retirees from inadequate incomes, and support a sustainable and fair retirement system.

[Torsten Bell]

We have now had a few discussions about the case for monitoring and evaluating the Bill and what is going on in the pension landscape more generally. I do not want to repeat everything I have said previously, so I will just address whether this is the right approach or whether it should be done through the Pensions Commission that is under way and looking at most of these issues. My view is that the Pensions Commission is focused on the headline issues that the hon. Member for Wyre Forest has just mentioned. I do not want to confuse that work by having another process consider the same issues at the same time. It is also valuable to have the independence of the commission when doing that.

My main message is that we do not have to wait long, because the Pensions Commission will report in 2027, which is earlier than the five years that we would have to wait for the Secretary of State’s inevitably excellent report as a result of this new clause. We should have faith in Baroness Drake, Ian Cheshire and Nick Pearce to deliver that.

[Kirsty Blackman]

I am not as au fait with the terms of reference of the review as the Minister. Is it possible that it will say, “We recommend that another review is undertaken in five, 10 or 15 years?” Will it look at whether the review is all we need at this point in time or whether we will need another review in future?

[Torsten Bell]

I do not want to speak for the commissioners because that would be to prejudge their work. I can tell the hon. Lady what the terms of reference require and they definitely rule out long-grassing in that they require actual recommendations for change to deliver a fair, adequate and sustainable pension system. It would certainly be open to them to say, “Do these things, and we also think that monitoring should be x and y.” That would be for them to say, and as it is an independent commission, I do not want to prejudge that. It definitely cannot be just that; it would have to include recommendations for change.

[Mark Garnier]

We tabled new clause 37 partly to try to get some reassurance from the Minister. Two years is still quite a long time, as is five, but it is incredibly important that we are on top of what is going on in the pension industry, not least because we do not want any of our constituents to end up with miserable retirements. However, I am marginally reassured by the Minister’s comments. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 38

Guidance on the roles of the Financial Conduct Authority and the Pensions Regulator

“(1) The Secretary of State must establish a joint protocol outlining the roles and responsibilities of the Financial Conduct Authority and the Pensions Regulator regarding their regulatory responsibility of the pension industry.

(2) A protocol established under subsection (1) must include—

(a) an overview of the coordination mechanisms between the two bodies;

(b) a published framework for oversight of hybrid or work-based personal pension schemes;

(c) a requirement for regular joint communications from both bodies to clarify regulatory boundaries for industry stakeholders.”—(Mark Garnier.)

Brought up, and read the First time.

--- Later in debate ---

[Kirsty Blackman]

I asked questions earlier about the consultation processes that DWP and the FCA are undertaking and about ensuring consistency in that consultation. This is a similar issue. I like the way that the new clause has been written to ensure that there are protocols so that everybody knows what side of the line they fall on. That can be a particular issue for organisations that have responsibility for both trust-based and contract-based pensions. They may be trying to scale or make efficiencies through investing or having similar default products, even though we are talking about two different types of scheme.

It would be helpful if the Government would commit to ensuring that, where those issues arise, and people are having conversations with the FCA and the Pensions Regulator about what side of the divide they fall on, the Government are keeping a watching brief. If there is regular confusion, the Government should ensure that they clarify the guidance so that people know which side they fall on. Those schemes that are either hybrid or have some sort of umbrella that encapsulates both trust-based and contract-based regulation will then know which side they fall on. They will be able to comply with both regulators, if that is the requirement, or with one of them.

As we said earlier, it is incredibly important that scheme members—current pensioners and prospective pensioners—get an excellent level of service. The vast majority of people do not know, and do not care, whether they are in a trust-based or contract-based pension scheme; all they want is to get as good a pension as possible when they hit retirement. Anything that the Minister can do to ensure that companies have a huge amount of clarity about where they fall, and that scheme members get the best outcomes when they hit retirement, would be helpful.

[Torsten Bell]

We all agree that we want providers and, most importantly, consumers to operate in this landscape as easily as possible. Particularly in the case of consumers, we do not want them to know the difference between the two. I have been very clear with both regulators that that is the objective, and I have been very clear with both Departments that oversee them that that is what we are doing.

Delivering that in practice requires thinking about how we legislate, and that is what we have done with the Bill to make sure that we are providing exactly the same outcomes through both markets. It is about Government providing clarity to regulators—we are absolutely providing that—and then about how the regulators themselves behave.

I am very alive to the issue that is being raised. There is some good news about the existing arrangements, which need to continue, because they are examples of effective co-ordination between the FCA and TPR. I have seen that through joint working groups, consultations, shared strategies and guidance, and regular joint engagement with stakeholders. The value for money measures in the Bill are probably the most high-profile recent experience of entirely joint working between the FCA, TPR and DWP.

The wider collaboration is underpinned by what is called the joint regulatory strategy and a formal memorandum of understanding that sets out how the two regulators should co-operate, share information and manage areas of overlap. I think that that basically achieves the objectives that the hon. Member for Wyre Forest set out, even if it is provided not by the Secretary of State but by a memorandum of understanding between the two organisations. I can absolutely reassure him and the hon. Member for Aberdeen North that I am very focused on this issue.

[Mark Garnier]

I am highly reassured by the Minister’s words. The important point is to ensure that if the bodies are to work together and do this, we need to keep them held to account on it. The Financial Conduct Authority was set up as an independent regulator and reports back to such things as the Treasury Committee. Presumably, TPR reports back to the Work and Pensions Committee. Already we can see a potential problem there, because separate Select Committees are doing the investigation. That is an important point, but I am confident that the Minister and his civil servants are aware of the problem and will be resolutely super sharp-focused on this issue to ensure that we have regulatory clarity. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 39

Section 38: commencement

“(1) The provisions in section 38 shall not come into force except in accordance with regulations made by the Secretary of State.

(2) A statutory instrument containing regulations under subsection (1) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”—(John Milne.)

This new clause would require that the provisions in clause 38 could only be enacted once agreed through secondary legislation.

Brought up, and read the First time.

[John Milne]

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

Overall, this Bill has wide cross-party support, as evidenced by the fact that we have been rattling through it at such a pace. However, the power of mandation is undoubtedly the most controversial aspect. To be briefly Shakespearean: to mandate or not to mandate, that is the question.

The new clause would require that the provisions in clause 38—the mandation powers—be enacted only through secondary legislation. It is an attempt to square the circle between two competing views. The Liberal Democrats have concerns about the implications of mandation, frankly, as has much of the pensions industry. For example, Pensions UK, which is a signatory of the Mansion House accords, has stated:

“We believe that the best way of ensuring good returns for members is for investments to be undertaken on a voluntary, not a mandatory basis. We also note powers being taken to specify required investment capability for schemes, and to direct LGPS funds to merge with specific pools. All of these powers will require careful scrutiny.”

Similarly, the Society of Pension Professionals has said:

“The SPP does not support the reserve power to mandate investment in private market assets and recommends its removal from the legislation. The mandation power creates significant uncertainty, including questions about legal accountability for investment underperformance and how eligible assets will be defined. The threat of mandation risks distorting market pricing and could reduce public trust in pensions, as savers may fear that financial returns are no longer the top priority.”

The Minister has stated on a number of occasions that mandation should not be necessary, that he does not expect to have to use it and that the Mansion House accord demonstrates the industry’s willingness to act voluntarily. The obvious response is that if that really is the case, and that UK private markets truly offer the best option for pension savers while meeting the fiduciary duties, the industry should not need any prodding and mandation will not be required. The Minister’s response on previous occasions, and no doubt today, has been to observe the history and point out that thus far, the industry has been slow to make that change.

We recognise that the Minister is wholly committed to the path of giving himself mandation powers, whatever we or anyone else says. Indeed, he sees it as core to the legislation. For that reason, we have proposed the new clause as a halfway house. The power would be put on the books, but it would require secondary legislation to be enacted. It would give the Minister the ability to have access to mandation powers at short notice if he deemed it necessary, without needing primary legislation, but in the meantime, it does not hang over the industry like a sword of Damocles. It may seem just a psychological difference, but psychology matters, and there are other advantages.

Somewhat counterintuitively, sometimes having too much of a stick can be a problem in itself. The Minister would be under pressure to use the stick for the sake of consistency in every case where any company went slightly over the limit or was under the limit, even when he might prefer to take a softer, more conciliatory approach. We therefore see this new clause as a way to help the Minister exercise the powers he needs, but without stepping too heavily on industry’s toes. As he has said, he does not believe that he will ever need to exercise the power, so let us keep it at arm’s length.

[Torsten Bell]

I will resist the temptation to relitigate the entire argument about clause 38, which we discussed at some length on Tuesday. I entirely agree with the thrust of the new clause, which is that there should be scrutiny of the use of any such powers—that includes the scale measures, not just asset allocation.

I can offer the hon. Member for Horsham some reassurance, because the Bill already provides that all significant regulations made under clause 38, including the ones he is referring to, are always subject to the affirmative parliamentary procedure. That is the effect of the changes made to section 143 of the Pensions Act 2008 by clause 38(15). That should give him a lot of reassurance. It is true that the new clause could put a further vote in the system, but the effect is the same. I have bad news about Governments with majorities: whether they are asked to vote once or twice, the outcome will look quite similar.

For the sake of transparency, I should flag that there are some much less significant measures in clause 38 that are subject to the negative resolution procedure. I will spell them out: regulations made that require regulatory authorities to report information relating to asset allocation to the Secretary of State, regulations made in respect of new information provisions, and regulations made in respect of the regulator’s power to issue a risk notice. The negative procedure is never used for the major aspects of clause 38, which, as the hon. Gentleman set out, is a central part of the Bill. I hope that reassures him that Parliament would have to support any measures to bring in the regulations that will underpin clause 38. As I have said ad nauseam, we intend to bring into effect the scale parts of clause 38, but do not anticipate the need to use the reserve power elements.

[John Milne]

I thank the Minister for his clarification. I emphasise that the new clause is as much for industry’s comfort as Parliament’s; nevertheless, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 44

Administration levy

“(1) The Pensions Act 2004 is amended as follows.

(2) In section 116 (grants), leave out from ‘expenses’ to end of section.

(3) Omit section 117 (administration levy).

(4) In section 173(3) (Pension Protection Fund), before subsection (3)(a) insert—

‘(aa) any sums required to meet expenses incurred by the Board in connection with the operation or discontinuance of the Pension Protection Fund,’

(5) In section 188(3) (Fraud Compensation Fund), before subsection (3)(a) insert—

‘(aa) sums required to meet expenses incurred by the Board in connection with the operation or discontinuance of the Fraud Compensation Fund,’.” —(John Milne.)

This new clause abolishes the administration levy and provides for the expenses of the PPF and the FCF to be met out of their general funds. It would enable FCF expenses to be covered by the FCF levy.

Brought up, and read the First time.

--- Later in debate ---

[Torsten Bell]

I am grateful to the hon. Member for the new clause. I acknowledge the concerns surrounding the abolition of the Pension Protection Fund admin levy. This is not a new issue; it has obviously been raised significantly by parts of the industry. I broadly support the intent of the new clause. It provides for the expenses of the PPF board and the Fraud Compensation Fund to be met by the PPF levy and the Fraud Compensation Fund levy, instead of the PPF administrative levy. The amendment to section 116 of the Pensions Act 2004 is unworkable as it is currently drafted, but more importantly, I give the hon. Member our assurance that we intend to lay amendments at a later stage that will achieve the same aim. On that basis, I hope that the hon. Member will withdraw the new clause.

--- Later in debate ---

[Torsten Bell]

I am grateful for this new clause, which was tabled by one of my neighbours in south Wales, the hon. Member for Caerfyrddin (Ann Davies). It is obviously an important issue for many ex-mineworkers and for families across Great Britain. It is basically straightforward: I want to reassure the Committee that the Government have been discussing the transfer with the scheme trustees for many months. Those discussions are actively under way. We expect to be able to make an announcement about the way forward in reasonably short order.

I am glad that the new clause will not be pushed to a vote—because if anything, it would risk slowing down the implementation of an agreed outcome—and I totally appreciate the point that the hon. Member for Aberdeen North has made. Any proposal for change will need to be consulted on with the scheme’s trustees on behalf of their members, but that will be coming forward. I hope that provides the Committee with the reassurance it is looking for.

[Kirsty Blackman]

I appreciate the reassurances that the Minister has given me. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 46

Trustees: independence

“(1) The Pensions Act 1995 is amended as follows.

(2) In section 29 (Persons disqualified for being trustees), after subsection (d) insert—

‘(da) he has a personal or financial interest in the pension scheme, except for member nominated trustees.’”—(John Milne.)

This new clause makes pension scheme trustees truly independent of the sponsoring companies so that they can protect scheme members’ interests without any conflict of interest.

Brought up, and read the First time.

[John Milne]

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

The new clause would have the effect of making pension scheme trustees truly independent of the sponsoring companies so that they can protect scheme members’ interests without any conflict of interest. Trustees should act solely in the best interests of their members, not those of the sponsoring employer.

Currently, conflicts of interest can arise where company-appointed trustees also have personal or financial ties to the scheme sponsor. The new clause seeks to strengthen independence, excluding conflicting trustees while still allowing member-nominated trustees. Members deserve trustees who are free to challenge employers and prioritise pensions over corporate interests. Having strong, independent trustees means stronger protection for savers’ retirement security.

[Torsten Bell]

I will remark briefly on the new clause. To state the obvious, the quality and independence of trustees is an integral part of our trust-based pensions system. It is very important, and it is right for the hon. Member to highlight it. Within those schemes, there are a range of trustee models. I would not want to put a blanket regime in place within the currently varied landscape. I want to give the hon. Member some different reassurance on this point. We are committed to strengthening scheme governance, including for some of the issues that he has raised. I have already announced my intention to consult later this autumn on measures to improve the governance of trust-based schemes. That work will consider again some of the exact issues that he raises. That is the right way forward, because there are lots of strengths to our current system. The quality of our trustees, their independence and everything they bring to their role are all valuable, but it is important that we maintain that as the best it can possibly be. I hope that the hon. Member will enjoy the consultation later this year.

[John Milne]

I thank the Minister for his encouragement. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 47

Report on Pension Scheme Eligibility and Access

“(1) The Secretary of State shall, within 12 months of the passing of this Act, lay before Parliament a report into the operation of occupational pension schemes where certain categories of employees have been excluded on the basis of job classification or employment start date.

(2) The report must examine the case of employees and former employees of Fife Joinery Manufacturing (a subsidiary of Velux), including—

(a) whether affected workers were provided with opportunity to join existing pension schemes,

(b) the adequacy of record-keeping and employer accountability, and

(c) potential remedies to ensure equal access to workplace pensions.”—(John Milne.)

This new clause would require the Secretary of State to report on the Velux Pensions case.

Brought up, and read the First time.

[John Milne]

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

The new clause would require the Secretary of State to report on the Velux pensions case. It would require him to report within 12 months on how occupational pension schemes exclude certain employees based on job classification or their start date. The report would specifically

“examine…employees and former employees of Fife Joinery Manufacturing (a subsidiary of Velux)”.

It would review whether affected workers were genuinely offered the chance to join the pension scheme. The report would assess

“the adequacy of record-keeping and employer accountability”

and explore possible

“remedies to ensure equal access to workplace pensions.”

The measure addresses concerns from shop-floor employees who joined before 1998 and were denied pension access despite repeatedly asking for it. The workers dispute claims that they declined pension membership and say they were told that they were not eligible. Attempts to engage Fife Joinery Manufacturing management have been unsuccessful. Workers have been advised to consider approaching the ombudsman, although none has done so yet. The new clause would hold the Government accountable to investigate and push for fairness and transparency. It is supported by my hon. Friend the Member for North East Fife and my Liberal Democrat colleagues.

To summarise, the new clause is a key step to ensure fairness and equality in workplace pension access and to prevent similar exclusions in the future.

[Torsten Bell]

I am grateful to the hon. Member, as always, for raising those specific issues in this debate. It has been a good opportunity to raise such cases, as he regularly does.

The hon. Member will be totally unsurprised that the Government cannot support the new clause, because it is the Pensions Regulator’s role to regulate occupational pension schemes and, as he mentioned, it is the Pensions Ombudsman’s job to investigate individual complaints from members. We do not want the Government to step over the top of those organisations. I encourage those who think that they have a case to approach the ombudsman, if they have not already—given the hon. Member’s remarks, it sounds like they have not done so. I should add that I am not aware of the details of that individual case.

To be clear, if individuals have concerns about their workplace pension scheme that relate to their employer and the running of the scheme, they should take the issue to the Pensions Regulator, which will investigate. Individuals who think that they should have been a member of a pension scheme can also go to the Pensions Ombudsman, if that makes sense. Depending on the nature of an individual’s complaint, two routes are available. I ask the hon. Member to withdraw his new clause.

[John Milne]

I thank the Minister for his words. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Clause 98

Regulations: general

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 99 stand part.

Government amendment 241.

Clause 100 stand part.

[Torsten Bell]

Clause 98 is a standard provision setting out how regulation-making powers in the Bill may be used. It confirms that all regulations will be made by statutory instrument and allows them to be tailored to different situations and scheme types. The clause ensures that the Bill can work effectively in practice.

Clause 99 sets out how regulations under the Bill will be scrutinised by Parliament, using either the affirmative or negative procedures—we were discussing a particular case relating to clause 38 just now. The clause also allows that regulations that would otherwise be subject to the negative procedure can be made as part of a joint package of regulations under the affirmative procedure.

Government amendment 241 is a technical amendment. The new provisions in chapter 1 of part 4 about changes to Northern Ireland salary-related, contracted-out pension schemes apply specifically to schemes in Northern Ireland. The rest of the provisions in chapter 1 apply to schemes in England, Wales and Scotland. Clause 100 is a standard legislative provision confirming the territorial extent of the measures in the Bill.

Question put and agreed to.

Clause 98 accordingly ordered to stand part of the Bill.

Clause 99 ordered to stand part of the Bill.

Clause 100

Extent

Amendment made: 241, in clause 100, page 98, leave out line 10 and insert—

“( ) Subject as follows, this Act extends to England and Wales and Scotland only.

(1A) Sections (Validity of certain alterations to NI salary-related contracted-out pension schemes: subsisting schemes) to (Powers to amend Chapter 1 etc : Northern Ireland) extend to Northern Ireland only.”—(Torsten Bell.)

This amendment secures that the new clauses inserted by NC28 to NC30 extend to Northern Ireland only. Northern Ireland has its own pensions legislation, but in view of the retrospective provisions in those new Clauses it is considered appropriate to include material in the Bill for Northern Ireland corresponding to the new clauses inserted by NC23 to NC26.

Clause 100, as amended, ordered to stand part of the Bill.

Clause 101

Commencement

[Mark Garnier]

I beg to move amendment 255, in clause 101, page 98, line 22, leave out “Chapters 1 and 2” and insert “Chapter 1”.

--- Later in debate ---

[John Milne]

I feel I ought also to thank everyone, and the Minister especially for a superb performance. I think we can all agree that this is a very good Bill, with lots of really good things in it. I am particularly interested in the investment side of it, with the greater resources to invest in UK plc, which we certainly do need.

Sadly, I expect the Bill will not receive the publicity that many do—it has not been in the headlines so far—and that is a pity. Much more trivial and ephemeral stuff, frankly, gets all the headlines, while something that is interesting and dynamic, like the measures in this Bill, will probably be displaced by the latest resignation.

[Torsten Bell]

I thank all Opposition Members for those reflections. I will come to my own after I have dealt with the remaining clauses and amendments—we must finish the job.

On the Opposition amendments, I am grateful to the hon. Member for Wyre Forest for his words. I am firmly committed to writing to both him and my hon. Friend the Member for Tamworth, which I shall do before Report. I am glad that the hon. Member will not press his amendments on that basis.

Amendments 225, 227 and 228 address the timing of the implementation of the provisions introduced by clause 38. Amendments 225 and 227 make it clear that the relevant master trusts and GPPs will not have to comply with the scale requirement until 2030. That is a point of clarification. In response to industry concerns, elements of the provision, such as the transition pathway, can be commenced and become operable prior to the scale requirement itself being active. We are responding to those concerns, and the amendment achieves exactly that. Amendment 228 provides clarification on the asset allocation elements of clause 38 by making it clear that those requirements will fall away if not brought into force by the end of 2035. Amendment 226 provides for the commencement of new chapter 3A, which will be inserted by new clauses 12 to 17.

On amendment 263, we have just discussed the PPF admin levy question. Given what we have just discussed about new clause 44, I ask the hon. Member for Torbay not to press the amendment.

Government amendment 242 introduces a commencement provision for the new chapter 1 of part 4 of the Bill on the validity of certain alterations to salary-related contracted-out pension schemes for both Great Britain and Northern Ireland. This measure means that two months after the Bill receives Royal Assent, effective pension schemes will be able to use a confirmation from their actuary obtained under this part of the Bill to validate a previous change to benefits—this is the Virgin Media discussion we had earlier today. Two months after the Bill becomes law, a previous change to benefits under an effective pension scheme will be considered valid if the scheme actually confirms that it met the legal requirements at the time of the change. This measure means that this part of the Bill will come into force two months after the Act receives Royal Assent and is a necessary accompaniment to new clauses 23 to 30.

Turning to the clauses, clause 101 is a standard commencement provision that details the timetable for bringing the Bill’s measures into operation and allowing transitional and saving provisions to ensure orderly implementation. Clause 102 is crucial, because it gives the Bill its short title. I commend those clauses to the Committee.

I will finish by adding my support to the comments made by all hon. Members about the proceedings of this Committee. I thank all hon. Members from all parties for their support—broadly—and also for their scrutiny, which is an important part of everything we do in this place. The Bill is important, but the debate around it is also important, both so that the legislation can be improved and in its own right. Such debate makes sure that issues are brought to the attention of the House and are on the record. I also thank this Chair, as well as several others, including those who have stood in at short notice at various phases of the Bill’s consideration. I am particularly grateful to one individual, and I am also grateful to the Clerks for all their work.

Most of all, I put on record my thanks to all the civil servants in the Department for Work and Pensions, His Majesty’s Treasury, the Financial Conduct Authority and the Pensions Regulator. Many of them have been working on the content of this Bill for many years, far longer than I have been Pensions Minister and, as many hon. Members have kindly reminded me, far longer than I may end up being the Pensions Minister, given the high attrition rate over the past 15 years in modern British politics. I thank them for the warning, and will take it in the way it was hopefully intended.

To be slightly worthy at the end of my speech, it is probably true that pensions legislation does not get the attention it deserves, but looking back over the 20th century, nothing was more important to the progress that this country and others made in delivering leisure in retirement. That very big win was delivered not only by productivity growth, but by Government decisions and collective decisions made by unions and their employers. The Bill goes further in that regard and, on that basis, it deserves all the coverage it gets.

[Mark Garnier]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 225, in clause 101, page 98, line 24, leave out “after 31 December 2029”.

This amendment, together with Amendment 227, means that relevant Master Trusts and group personal pensions will not have to comply with the scale requirement until after 2030, but that Chapter 3 of Part 2 (including provision relating to the scale requirement, such as the application can otherwise be brought into force at any time in accordance with regulations.

Amendment 226, in clause 101, page 98, line 25, at end insert—

“(ba) Chapter 3A comes into force on such day as the Secretary of State and the Treasury jointly may by regulations appoint;”.

This amendment provides for commencement by regulations of the new Chapter referred to in the explanatory statement to NC15.

Amendment 227, in clause 101, page 98, line 30, leave out subsection (5) and insert—

“(5) Regulations under subsection (4)(b) may not provide for the following to come into force before 1 January 2030—

(a) section 38(4), in respect of the insertion of Condition 1 in section 20(1A) of the Pensions Act 2008 (Master Trusts to be subject to scale requirement);

(b) section 38(8), in respect of the insertion of section 26(7A) of that Act (group personal pension schemes to be subject to scale requirement)

(but nothing in this subsection prevents section 38 from being brought into force before that date in respect of the insertion in that Act of other provision related to that mentioned in paragraph (a) or (b)).”

This amendment ensures that schemes will not be legally subject to the scale requirement before 1 January 2030. It allows, however, for provision relating to that requirement (e.g., provision around applications for approval) to be commenced before that date in anticipation of the requirement itself taking effect.

Amendment 228, in clause 101, page 98, line 34, at end insert—

“(5A) If section 38 has not been brought into force before the end of 2035 in respect of the insertion of—

(a) Condition 2 in section 20(1A) of the Pensions Act 2008 (asset allocation requirement: Master Trusts), and

(b) subsection (7B) in section 26 of the Pensions Act 2008 (asset allocation requirement: group personal pension schemes),

section 38 is repealed at the end of that year in respect of the insertion of those provisions.”

This amendment transposes and clarifies the provision currently in clause 38(16). It provides for the key provisions imposing the asset allocation requirement to fall away if they are not brought into force before the end of 2035.

Amendment 242, in clause 101, page 98, line 37, at beginning insert—

“( ) Chapter 1 of Part 4 comes into force at the end of the period of two months beginning with the day on which this Act is passed.

( ) Chapter 2 of”.

This amendment provides for the commencement of the new Chapter relating to the consequences of the Virgin Media case .

Amendment 243, in clause 101, page 99, line 5, after “section 96” insert

“and (Information to be given to pension schemes by employers)”.—(Torsten Bell.)

This amendment provides for the commencement of NC20.

Clause 101, as amended, ordered to stand part of the Bill.

Clause 102 ordered to stand part of the Bill.