Pensions Bill 2013-14 – House of Lords stages

The Pensions Bill 2013/14 was introduced in the House of Commons on 10 May 2013. Its main elements are to:

– Provide for the introduction of a single-tier state pension for future pensioners from April 2016;

– Bring forward the increase in the State Pension age (SPA) to 67 to between April 2026 and 2028 and to provide for a periodic review of the SPA;

– Reform benefits for bereavement by introducing a new Bereavement Support Payment, with support focused on the period immediately following bereavement;

– Provide for a system of automatic transfers so that a small pension pot will follow an individual to their new pension scheme when they change jobs;

– Make amendments to Pensions Act 2008 in relation to automatic enrolment in to workplace pension schemes, which started to be introduced from October 2012; and

– Make other amendments related to private pensions, including the abolition of “short service refunds”, a new objective for the Pensions Regulator; and provision for regulations to prohibit the offer of incentives to transfer certain pension rights.

The Bill was published in the House of Lords on 30 October 2013, having completed its Commons’ stages the previous day. It had its Second Reading in the Lords on 3 December 2013. This was followed by six sittings of the Grand Committee, Report Stage on 24 and 26 February 2014 and Third Reading on 12 March.

The Government made a number of amendments to the Bill in the Lords. They included amendments to:

– Provide for the new class of Voluntary National Insurance contributions (class 3A) that had been announced in the Autumn Statement;

– Increase access to NI credits for spouses and civil partners accompanying service personnel abroad;

– Exclude schemes with ‘protected persons’ regulations from the application of the ‘statutory over-ride’;

– Ensure that the power to create general exceptions to the auto-enrolment duties could not be used to exclude classes of employers on the basis of their size;

– Require regulations to be made requiring greater transparency around transaction costs by pension schemes.

One backbench amendment, opposed by the Government, was made to the Bill at Report Stage. In the name of Labour Peer, Baroness Hollis of Heigham, its purpose was to provide for regulations to be made that would enable a person to effectively combine earnings from multiple jobs to obtain a ‘qualifying year’ for the purpose of entitlement to the new State Pension.

Three amendments in the names of the Opposition spokespersons were defeated on division at Report Stage. Their purpose was to: retain the option of using an “aggregator model” as an alternative to “pot follows member” for transfers of pension pots when a person moves jobs; require regulations to be made introducing a charge cap by 30 April 2015; and to require the introduction of an independent annuity brokerage service. A further amendment in Baroness Hollis’ name – to enable bereaved parents to be exempted from Universal Credit conditionality for a period twelve months – was also defeated on division.

The House of Commons considered the Lords’ amendments on 17 March 2014. Baroness Hollis’ amendment was rejected on division. Pensions Minister, Steve Webb thanked her for raising the issue but thought a stronger evidence base was needed before deciding how to proceed. He explained how the Government intended to take this work forward (HC Deb 17 March 2014 c566).The amendments the Government had made to the Bill in the Lords were accepted.

This note aims to provide an overview of the debates on the Bill in the House of Lords. The background to the Bill is discussed in Library Research Paper RP 13/37 Pensions Bill. The debates in the Commons are discussed in SN 6634 Pensions Bill 2013-14 – House of Commons stages