The Pension Schemes Bill has been approved by the House of Lords and should gain royal assent shortly.
The completion of its final stage in the parliamentary process comes just over a year after being introduced. The Bill includes legislation relating to the long-awaited pensions dashboard project set for launch in 2023.
Quilter pension expert Ian Browne explained there had been “sticking points” between the House of Commons and the Lords relating to pensions dashboards.
“The first was around whether pension dashboards should allow users to engage in ‘financial transactions’, including the consolidation of pots and transfers between providers.
“Opposition peers had concerns that allowing transactions to take place on a commercial dashboard could present an increased risk of fraud, and could lead individuals to make rash decisions with what is most likely to be their most important financial asset.
“However, the government’s preference is for dashboards to initially be limited to providing a simple ‘find-and-view’ service before evolving to allow ‘transactions’ at a later date, and today the government had its way.”
Browne said exactly what transactions will be permitted will be decided by statutory instruments – detailed additions to the legal framework laid out in an Act – and technical regulations from the Department for Work and Pensions and Financial Conduct Authority at a later date.
It is expected to cover the consolidation of pension pots, transfers between providers, and potentially the raising or lowering of contributions to an individual’s pension.
Parliamentarians also clashed about when commercial dashboards could start to operate. “Peers initially favoured an amendment to delay the operation of commercial dashboards for at least a year after the publicly-run dashboard had been working, but the government felt that this may stunt innovation and leave consumers ultimately poorly-served,” explained Browne.
“Opposition Lords backed down on this amendment, so it has been settled that as a starting point, both the Money and Pensions Service dashboard and commercial dashboards will offer a simple ‘find and view’ service from 2023.”
Association of British Insurers director of policy, long-term savings Yvonne Braun said: “The Pension Schemes Act lays the foundations for critical developments in the pensions landscape: setting out the framework for pensions dashboards, reuniting savers with their lost pension pots, clamping down on pension scams, and mandating climate-related disclosures.
“We look forward to working with government and stakeholders as the detail of these measures is set out in secondary legislation.”
She added: “However, important elements of pensions policy still require swift legislative attention – a robust and permanent regulatory regime for Superfunds, extending the coverage of automatic enrolment to bring more lower earners into pension saving, and measures to tackle the proliferation of online pension scams and investment fraud.
“The ABI and our members stand ready to work with government on these important issues which will help to make the pension system fit for the future.”