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This paper has been prepared for Second Reading of the Pension Schemes Bill on 2 September 2014. The Bill (which extends to England, Wales and Scotland) would establish a new legislative framework for private pensions, defining them on the basis of the promise they offer for members about their retirement benefits during the accumulation phase. The promise will either refer to all the benefits (defined benefits), some of the benefits (shared risk), or there will be no promise (defined contributions). It would also enable the provision of collective benefits (provided on the basis of allowing the scheme's assets to be used in a way that pools risks across membership).

The Bill would also give force to measures announced in Budget 2014 to give people aged 55 and over more flexibility about how to access their defined contribution pension savings from April 2015. It would enable a prohibition on transfers out of unfunded public service pension schemes, except to other defined benefit schemes. Measures to introduce a 'guidance guarantee' are not in the current Bill but are to be the subject of Government amendments in the autumn.

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