My Lords, this group makes several small pensions amendments, which I shall highlight briefly.
The first amendment is technical in nature and closes an unintended gap in guidance provision, ensuring that people in the Pension Protection Fund—the PPF—are able to access Pension Wise guidance. At present, Pension Wise is able to provide guidance only to a member, or the survivor of a member, of a pension scheme. As the PPF is a compensation fund, not a pension scheme, individuals whose schemes have transferred into the PPF are not able to obtain guidance from Pension Wise.
Where a defined benefit scheme transfers to the PPF, usually following the sponsoring employer becoming insolvent, it is possible that any money purchase benefits which a scheme member has built up, most likely as a top-up to their defined benefit scheme, could also transfer in. The amendment will allow these members to receive guidance on options around what to do with their money purchase benefits. Pension Wise should be available to all who wish, and are able, to take advantage of the pension freedom reforms, and it is right that we are taking action now to ensure that all are treated consistently.
Next is a series of amendments that make changes to Clauses 27, 30 and 32. These ensure that powers currently given to the Treasury will be given instead to the Secretary of State. This is so that when oversight of Pension Wise moves to the Department for Work and Pensions, my right honourable friend the Secretary of State for Work and Pensions will be able to exercise this power.
I turn finally to the amendment creating a new clause. This amendment is technical in nature and allows appointed representatives of authorised financial advisers to advise on the conversion and transfer of safeguarded benefits, which are the special valuable features of certain pensions, such as defined benefit
pensions and pensions with guaranteed annuity rates, for the purposes of the advice safeguard established in Sections 48 and 51 of the Pension Schemes Act 2015.
These amendments to Sections 48 and 51 of the Pension Schemes Act 2015 will amend the definition of “authorised independent adviser” to include appointed representatives. As a result, they will be able to give appropriate independent advice to satisfy the advice safeguard. They will also amend the Financial Services and Markets Act 2000 (Appointed Representatives) Regulations 2001 to the same end. Around two-thirds of financial advisers are appointed representatives who have a special contract to provide services on behalf of their principal, who will be an authorised financial adviser regulated by the FCA. This measure puts the eligibility of appointed representatives to advise on these transactions beyond doubt.
The amendment extends eligibility to advise on these transactions only to the appointed representatives of financial advisers. What this will not do is reduce consumer protections or weaken the accountability of financial advisers, or their appointed representatives. Where an appointed representative advises on these transactions, the directly authorised firm, as the principal, takes full responsibility for the quality of the advice and compliance with FCA rules.
The pension freedoms which came into effect in April have given people real freedom and choice in how they access and spend their income at retirement. This amendment will help to ensure that they operate as intended for customers with safeguarded benefits. I beg to move.