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Pensions Bill

moved Amendment No. 10: 10: Clause 3, page 2, line 28, leave out subsection (5) and insert— ““(5A) For the purposes of arrangements under subsection (2) regulations may require information to be provided to any person by the employer or— (a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme; (b) where the arrangements relate to a personal pension scheme, the provider of the scheme. (5B) For the purposes of arrangements made under subsection (2) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 7) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.”” The noble Lord said: I shall also speak to the other amendments in the group. Workplace personal pensions are an important and growing part of the pensions market. Membership of workplace personal pensions is around 47 per cent of current private sector pension membership, which represents about 3.3 million employees, involving total contributions of £6.7 billion a year. There are 2.1 million members of WPPs with an employer contribution of 3 per cent or more. We have always intended to include workplace personal pensions within the scope of this legislation but we were concerned that these schemes could fall under the scope of the directives on distance marketing and unfair commercial practices. We are now content that, under the specific provisions of the employer duty, automatic enrolment into workplace personal pensions is not within the scope of these directives. The European Commission has confirmed that it shares our view. This group of amendments reflects that positive outcome. Amendment No. 10 to Clause 3 will permit qualifying workplace personal pensions to be used for automatic enrolment. That is achieved by enabling the deeming of an agreement for scheme membership between the jobholder and the provider. This agreement will be based on the provision of information to the jobholder as to the terms and conditions of the scheme that they are joining. The details of the information to be provided will be laid out in regulations. The amendment also takes a new power to ensure that, to support the automatic enrolment process, information relating to the scheme that a jobholder is being enrolled into is provided to any relevant persons. Of course, we no longer need the power to exempt workplace personal pensions from the requirement to automatically enrol. Amendment No. 10, therefore, also removes the power for an exemption. Amendment No. 12 to Clause 4 is a consequential amendment, removing a further reference to the power for an exemption. Together with stakeholders, we have worked hard over the past 12 months to consider how workplace personal pensions are treated under these reforms. This decision ensures both that the integrity of the reforms is maintained and that the insurance industry can continue to operate on a level playing field. Amendments Nos. 18 and 23 to Clauses 5 and 6 respectively mirror the new provision in Clause 3 for the cases of automatic re-enrolment and the jobholder’s right to opt in. Alongside these changes, Amendment No. 54 is a crucial amendment that extends the remit of Clause 16 to allow qualifying workplace personal pensions to be used as automatic enrolment schemes. Amendment No. 55 to Clause 16 is a minor technical amendment to tidy up the drafting of the Bill. The remaining amendments in this group are all concerned with ensuring that the Bill accurately reflects our new position regarding WPPs and automatic enrolment. I shall explain each briefly. Amendment No. 37 to Clause 8 makes a cosmetic adjustment to the Bill so that there is no longer a distinction between occupational and personal pension schemes for workers without qualifying earnings. Amendment No. 86 extends the remit of the power in Clause 29 to personal pension schemes, to enable employers to deduct pension contributions from the pay of an individual who has been automatically enrolled into a personal pension. Amendment No. 87 makes it clear that this power is not necessary for workers without qualifying earnings who request to be enrolled into a personal pension scheme, as direct payment arrangements for this situation are covered under Section 111A of the Pension Schemes Act 1993, as described in Clause 8(7)(c). Clause 29 also contains the consequential Amendment No. 88, which makes it explicit that, following on from Amendment No. 86, contributions can be paid to the provider of a personal pension scheme as well as the trustees or manager of an occupational pension scheme. Finally, Amendment No. 105 removes from Clause 49 further references to the power to regulate for an exemption from automatic enrolment for personal pensions. This clause will therefore apply to employers equally, irrespective of whether the qualifying scheme that they provide for their workers is an occupational or personal pension scheme. I beg to move.