Pensions Bill

My Lords, this amendment would allow the Secretary of State to vary the transitional phasing period for different employers. This power already exists in the Bill. While Clause 28 sets out specific arrangements for phasing, moving from 1 per cent to 3 per cent employer contributions over two transitional periods of at least a year, we have retained the flexibility to set the length of the periods in regulations. We believe that our proposed arrangements for phasing will help all employers adjust to the reforms. However, phasing will be of most benefit to the smallest employers who do not currently make workplace pension contributions for their workers. Only 23 per cent of firms with fewer than five employees offer pension provision with an employer contribution, compared to over 60 per cent of firms that have more than 50 employees. We will consult employers and employer groups to develop the detailed regulations that will establish exactly how long phasing will last. As part of this consultation, we will, of course, consider any views about whether our proposed arrangement is right for all types of employer. We also intend to carry out research into the ability of small employers to absorb and adjust to increases in costs. These findings will inform our draft regulations on the phasing periods. If it became clear that a longer phasing period was required by small employers, we could legislate for different phasing periods for larger and small employers under Clause 28, by exercising it in conjunction with Clause 138. In that sense, the amendment moved today would not be necessary. Looking beyond the phasing policy, we expect that many small employers, who will be engaging with pensions for the first time, will elect to offer the personal accounts scheme to discharge their duty. With that in mind, Clause 78(2)(b) requires the Personal Accounts Delivery Authority in carrying out its functions to have regard to minimising burdens on employers when designing the personal accounts scheme. An employer panel has been established to advise on the design of the scheme. We believe that these measures will help to minimise the impact of the reforms on employers of all types. We will continue to work closely with employers to develop the secondary legislation for phasing and for all the employer duty and compliance measures. I hope that this provides some reassurance, in particular that what the noble Baroness seeks to achieve in her amendment is already made possible by two separate clauses in the Bill.