Pensions Bill

moved Amendment No. 16: 16: After Clause 72, insert the following new Clause— ““Review (1) The Secretary of State must appoint a person to review in relation to a scheme established under section 66— (a) the effect of provision made under section 69 (maximum amount of contributions), (b) the effect of any restrictions on rights to transfer into the scheme or transfer out to another pension scheme, and (c) such other matters as the Secretary of State may direct. (2) The appointment under subsection (1) must be made on or after the later of— (a) 1 January 2017; (b) the end of five years beginning with the first day on which contributions are paid to the scheme by or in respect of members. (3) The person appointed under subsection (1) must— (a) prepare a report of the review, and (b) send a copy of the report to the Secretary of State. (4) The Secretary of State must lay before Parliament a copy of the report. (5) The Secretary of State may pay to the person appointed under subsection (1) such remuneration and expenses as the Secretary of State may determine.”” The noble Lord said: My Lords, as noble Lords will be aware, we are committed to a review of all aspects of the personal account scheme in 2017. When we debated this issue on Report, my noble friend agreed to consider putting that commitment in the Bill. Following this consideration, the amendment puts into the Bill a requirement for the Secretary of State to commission an independent review of the features of the personal accounts scheme that are designed to focus it on the target market; specifically, the annual contribution limit and the prohibition of pension fund transfers to and from the scheme. As my noble friend explained, the 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 or to its members. We also debated whether the scope of the 2017 review should be extended to include other issues. My noble friend Lady Hollis, for example, suggested that it should consider voluntary contributions on earnings below the contributions bands. We agree that it might be right to include other issues in the review. We have therefore included in the amendment scope for a future Government to decide the exact remit of the review. This is not something that we can or should decide so far in advance. Other issues may arise between now and 2017 that are more appropriate to include in the review. It will be up to the Government at the time to consider what, if anything, in addition to the contribution limit and the transfers ban the review should cover. We have always been clear that it is our aim to have a review in 2017; that is, five years after the scheme became operational. We see no reason why the scheme would not become operational as planned, but the amendment, in line with the spirit of the amendment tabled by the noble Lord, Lord Skelmersdale, and the noble Baroness, Lady Noakes, on day one of Report allows us to ensure that there will be a gap of five years between the scheme becoming operational and the date of the review. On Report, the noble Lord, Lord Skelmersdale, expressed interest in how we would define ““operational””. The amendment makes it clear that it means the first day on which contributions are paid to the scheme by or for members. This ensures that the timing of the review is tied to when the scheme starts to act in its capacity to accept contributions and invest them for its members. Our approach, on both the scope and the timing of the review, is to make clear our intentions but to allow for all eventualities. We believe that this is the right approach when developing pensions policy for the long term without the benefit of hindsight. I beg to move.