Pensions - Articles - Government face headache over multiple Pensions Bill defeats


The Government faces difficult decisions on how to respond after being defeated no fewer than four times in the House of Lords last night in votes on the Pension Schemes Bill.

 Two of the defeats were on the provisions for a pensions dashboard, one was on the new style ‘collective’ defined contribution (CDC) pensions, and one was on the framework for regulating the remaining open Defined Benefit schemes.

 Peers voted:
 - That pension dashboards should not be ‘transactional’ – that is, it should not be possible to transfer or consolidate funds via the dashboard;
 - That commercial dashboards could not be up and running until a publicly provided / not-for-profit dashboard had been running for a year;
 - That trustees of CDC schemes would have to report on the ‘fairness’ of the scheme to all members;
 - That a separate regulatory approach be taken to ‘open’ DB schemes, including not acting in a way that would accelerate their closure

 When the House of Lords completes its consideration of the Bill it will then be sent to MPs in the House of Commons who will consider the Bill line-by-line. For each defeat, the Government will have three options:

 - To accept the amendments in full (which would be unusual)
 - To offer an alternative amendment which would seek to address some of the issues of concern
 - To reject the amendments and send the Bill back to the Lords unamended

 Because the government has a majority of 80 in the House of Commons, it can be confident of winning most votes in the Commons, especially on relatively technical matters, so it may be tempted to reject all amendments at this stage. Peers would then have to decide whether to vote against the government a second time, or to give some ground on some of the issues.

 Commenting, Steve Webb said: “It is unusual for the government to be defeated so many times on what has until now been seen largely as a non-controversial piece of legislation. This suggested that they have misjudged the mood on some of these issues and have failed to listen. The government now needs to address the concerns raised by members of the House of Lords so that this important legislation can progress. In particular, it needs to make sure that the new funding regime proposed for open Defined Benefit schemes does not have the effect of driving them to close. It also needs to make sure that the Pension Dashboard is set up in a way that protects the interests of consumers and makes sure they are not at risk of scams”.
   

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