The Pensions Bill 2013 was published on 13 May along with the Government's response to the Work and Pensions Select Committee's report on single-tier state pension reform. A number of amendments have been made to the Bill since the first draft. The key aspects of the Bill are as follows:
- a new single tier state pension to be implemented from 6 April 2016;
- DB contracting-out is to be abolished on the same date, although employers will be able to reflect increases in their National Insurance Contributions and amend their schemes;
- the increase to state pension age from 66 to 67 is to be brought forward by eight years and will now take place between 2026 and 2028;
- following previous Government announcements as to a pot-follows-member approach when a member changes employment, a system of automatic transfers will be introduced, initially in respect of DC pots of up to £10,000;
- the ability to pay a refund of contributions to members of DC schemes will be removed; and a new statutory objective for the Regulator is to be introduced, in relation to the exercise of its scheme funding functions "to minimise any adverse impact on the sustainable growth of an employer".
The Regulator's powers would also be widened by the Bill. A regulation-making power to ban employers incentivising members to transfer their pension rights to a non-pension arrangement is to be introduced. Changes in relation to auto enrolment include a power to create exceptions from the requirement to automatically enrol a worker.
The new statutary objective should be good news to those who feel that employers' interests have been overlooked in the past. Industry response to this has so far been positive. The NAPF published a response to the proposed new statutory objective (first raised in the 2013 Budget), calling it an "appropriate response to the challenging economic conditions faced by pension schemes and their sponsoring employers".
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