Peers in the House of Lords have criticised the Pension Schemes Bill for failing to mention plans to lower the auto-enrolment starting age and a lack of detail on the pension dashboards.
The first debate in the House of Lords on the Pension Schemes Bill took place last night with peers pointing to a number of issues including the failure to implement the department for Work and Pensions’ own automatic enrolment review proposal to lower the starting age from 22 to 18.
During the debate, which lasted for over four hours, peers raised concerns about the lack of detail on pension dashboards and criticised the lack of progress on the project and the potentially limited scope of information that would be featured on it.
There were also differences of opinion on whether multiple dashboards were preferable to a single publicly run dashboard. Currently the bill allows for multiple dashboards to be run by providers and one by Maps.
Another major concern was the lack of detail of how collective defined contribution schemes would operate, with some saying rules governing these schemes were left to subsequent regulations.
CDC schemes differ from DB pensions in the sense they do not guarantee certain incomes in retirement. Instead, CDC have a target amount they will pay out, based on a long-term, mixed-risk investment plan.
These schemes also differ from the traditional defined contribution (DC) plans in that they do not produce individual pension pots. Instead they invest savings in a larger collective pot, which provides an income to individuals during their retirement.
Steve Webb, director of policy at Royal London said: “The general thrust of this bill is widely welcomed, but there are still serious concerns about both what is in the bill and what is left out.
“The bill fails to implement important changes to the pension landscape such as bringing more people into automatic enrolment and legislating for the vehicles for consolidating smaller pension schemes.
“Whilst the DWP can ultimately use its majority in the Commons to ‘ram through’ pretty much any legislation, the pension system would be better if it listened carefully to the concerns raised by peers and amended its own bill’.”
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