UK Parliament / Open data

Pension Schemes Bill [HL]

I thank my noble friend for his response. I welcomed, very much, the commitment in the manifesto to look at this issue. However, I hope he will forgive me if I suggest that this is not necessarily a matter just for the Treasury. Tax relief is, of course, a matter for the Treasury but the duties of schemes, trustees, IGCs and employers is a matter for the Pensions Regulator. Also, auto-enrolment falls under the Department for Work and Pensions. Might it therefore be possible—I humbly request this of my noble friend—to go back to the department to consider whether this issue of suitability could go broader than just tax relief? It could include all sorts of other areas: for example, an employer might choose a scheme that the majority of the workforce might not like to be in, but there is no mechanism for them not to be put into it.

If that is considered too difficult, I certainly take the point on low earners. This is a probing amendment and I would, for example, be happy to specify those earning below the personal tax threshold—that is really what we are talking about and it could be addressed. I understand and recognise that there is guidance for employers on the Pensions Regulator’s website but the requirements for master trust authorisation, or the requirements put on IGCs and trustees of these pension schemes, do not include taking any concern for the extra costs imposed on those earning below the personal tax threshold. One wonders how value for money could be confirmed by those running pension schemes if many people in those schemes pay 25% more than they would if they were in an alternative scheme. There is a requirement for a value-for-money assessment but it does not seem to take account of these low-earning women.

I would be delighted to help the Government fulfil their aim of addressing this issue. Notwithstanding that, I would be grateful if my noble friend might consider whether there should be some extra duty. If it is not just on employers—I take that point and I mentioned it in moving the amendment—at the very least the trustees, the IGCs and the regulator know what is going on, even if in most cases the small employer does not. I have seen the wording on the Pensions Regulator’s website; it is not really clear, if you are someone who does not know what this is all about, that actually it means that because of the scheme you have chosen, your low earners will pay 25% more than they otherwise would.

Whether or not we can address this in the Bill—I hope that maybe we can—I am grateful to noble Lords who have supported the amendment. I am also grateful to my noble friends the Ministers, and the department, for having taken the time to continue to discuss the issue. I beg leave to withdraw the amendment.

About this proceeding contribution

Reference

802 c345GC 

Session

2019-21

Chamber / Committee

House of Lords Grand Committee
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