Pension Schemes Bill 2014-15 – House of Lords stages

The Pensions Schemes Bill 2014-15 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; and 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); and

• Give force to measures connected with the announcement in Budget 2014 that people aged 55 and over would have more flexibility about how to access their defined contribution pension savings from April 2015. The changes to pension tax legislation necessary to implement these changes are in the Taxation of Pensions Act 2014.

The Bill went through its Commons stages between 26 June and 25 November 2014. HL Bill 63 had its First Reading in the House of Lords on 26 November and its Second Reading on Tuesday 16 December. It then had two sessions in Committee on 7 January and 12 January 2015, Report Stage on 27 January and Third Reading on 5 February. The Commons is scheduled to consider the Lords’ amendments on 24 February.

The Government made amendments to the Bill during the Lords’ stages, for which has it produced Explanatory Notes. A significant developments during the course of the debates was the announcement by the Financial Conduct Authority of its plans to introduce additional protections for consumers. The Government also said it would produce clear guidance explaining the interaction of pension freedoms with means-tested benefits and social care.

Issues raised by the Opposition included proposals for: an annuity brokerage service, governance arrangements, a charge cap in drawdown funds and arrangements for monitoring the impact of the pension freedoms. It did not push any of its amendments to a vote.

For the background see Library Note SN 7030 Pension Schemes Bill 2014-15 – House of Commons stages (December 2014) and RP 14/44 Pension Schemes Bill (August 2014).