Pensions Bill

The Pensions Commission proposed the establishment of a low-cost, simple pension scheme for low to moderate earners currently without access to a pension. The creation of the personal accounts scheme will enable all employers to fulfil their new pension duties. Lords amendment No. 139 is an Opposition amendment that we have accepted. It establishes a duty on the Secretary of State to set up the pension scheme, rather than a power to do so. Associated minor and technical amendments Nos. 140 to 145 will ensure that the legislation works correctly and clearly. The delivery authority will establish the personal accounts scheme—a task of considerable complexity. Amendments Nos. 151 and 282 will allow the delivery authority to appoint as executive members individuals on secondment or loan from other organisations. That will enable the authority to recruit the best people—strong leaders with expertise and specialist skills in a variety of areas. Amendment No. 281 ensures that appropriate changes in relation to the personal accounts delivery authority are made to the Pensions Act 2007 once this Bill is enacted. The trustee corporation will be a sole corporate trustee, with initial appointments made by the Secretary of State in line with guidance on public appointments issued by the Office of the Commissioner for Public Appointments. Amendment No. 236 requires the Secretary of State to consult the chair of the trustee corporation prior to making any appointments to the corporation in the initial period. This was always the intention, but we listened to the Opposition's points, which is why we have introduced the amendment. Members of the trustee corporation will be public servants, and therefore subject to the time limits on tenure of office provided in the OCPA guidance. To that end, amendment No. 237 increases the maximum term of appointment from four to five years to align it with the guidance. Amendment No. 238 allows the corporation to delegate a function, within the scope of the order and rules, to any member of staff. This amendment ensures that the trustee corporation has flexibility within its remit in terms of staffing. Amendments Nos. 149 and 150 and 239 and 240 clarify that any loans provided by the Secretary of State to either the authority or the trustee corporation should at least cover the cost of Government borrowing. That firmly establishes in the Bill our intention that the funding for setting up and operating the scheme should be delivered at nil cost to taxpayers. The amendments will also ensure that any financial assistance that the Secretary of State might provide will be consistent with the general rules on Government lending. The hon. Member for Eastbourne (Mr. Waterson) has tabled an amendment to amendment No. 150 that would require loans to the delivery authority to be paid at commercial rates. We have been clear that we have no intention of unfairly subsidising the authority or the scheme. However, the scheme will be in the unique position of performing a public service obligation to accept all eligible employees irrespective of the cost of doing so. That will be essential in ensuring that everyone has a scheme into which they can be automatically enrolled. In the long term, the scheme's scale will enable it to act in that way while offering low charges to members, but in the short term it could add to the burdens of establishing the scheme. We will understand the issue more once the procurement process reveals the actual cost of establishing the scheme. However, before then we cannot accept an amendment that locks the scheme into a fixed period of repayment or to commercial loan rates without knowing whether that would undermine our aim of delivering a low-cost scheme available to all. We are committed to a review of some aspects of the personal account scheme in 2017, and amendment No. 147 places that requirement in the Bill. This will be an independent review of those features of the personal accounts scheme that are designed to focus it on the target market of moderate to low earners, specifically the annual contribution limit and the prohibition of pension fund transfers. Again, the Opposition made that proposal, and we have accepted it following debate. The majority of these amendments are minor, while others strengthen the Government's commitment to ensuring that more people are able to save for their retirement. With the exception of the Opposition amendment, which I think was tabled yesterday, I commend the amendments to the House.