Pensions Bill

My Lords, as noble Lords will be aware, we have committed to having a review in 2017 of two of the measures that will focus the personal accounts scheme on its target market. We have stated on a number of occasions that the review will focus on the annual contribution limit and the transfer ban and I willingly restate our commitment to such a review. The noble Lord, Lord Oakeshott, asked about the transfer ban. The purpose of that component of the review is to address whether the proposed restriction on transfers in and out should be lifted, ameliorated in any way or retained. This review will consider these policies and gauge whether they have been effective in focusing the scheme on its target market, without detriment either to the scheme and/or its members. The amendment tabled by the noble Lord, Lord Skelmersdale, would require the Secretary of State to lay a report on these two measures before Parliament five years after the scheme is established. We, of course, agree with the spirit of the amendment, as we have committed to undertake such a review. However, we would like to consider the wording in more detail. For example, the amendment may commit the Secretary of State to a review before 2017, as it links the review to the establishment of the scheme rather than to when it starts to operate. In practice, the scheme will have to be formally established before it becomes fully operational. Various tasks will need to be undertaken by the trustee before the scheme can operate as a scheme for accepting pension contributions and investing them. As I have said, we have sympathy with the aim of the amendment and I am happy to commit to returning to it—we will have a busy Third Reading—once we have had an opportunity to ensure that the amendment fully meets the intent. I hope that that will satisfy the noble Lord. My noble friend Lady Hollis presses a further issue. She asks for the review to deal with the ability of people who have qualifying earnings to be auto-enrolled into a scheme or voluntarily pay contributions from ““pound zero””. That will bring in an employer contribution. She outlined her discussions with the EEF and others on this matter. We have always envisaged that the 2017 review would specifically deal with the features of the scheme that are intended to protect the market, the contributions limit and transfers. It will be an independent review that is carried out separately from the Government’s ongoing assessment of the reforms. Nevertheless, as we are taking this amendment away anyway, we will reflect on what my noble friend said.