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Pensions Bill

moved Amendment No. 35: 35: After Clause 7, insert the following new Clause— ““Jobholder’s further rights to opt out (1) This section applies to a jobholder to whom arrangements under section 3(2), 5(2) or 6(3) apply (arrangements for the jobholder to become an active member of an automatic enrolment scheme). (2) If a jobholder gives notice in accordance with this section, he is to be treated as ceasing membership of the scheme from the date specified in the notice which must be at least one month after the date the notice is given. (3) With effect from the date specified in the notice, contributions will be payable neither by the jobholder nor by the employer. (4) The Secretary of State may by regulations make provision about the form and content of a notice under this section. (5) Regulations must provide for the notice— (a) to include information about the effect in relation to jobholders of giving notice under this section, and (b) to be signed by the jobholder.”” The noble Baroness said: This amendment would insert a new clause after Clause 7. Clause 7 allows opting out of auto-enrolment during a period after joining that is yet to be specified, as we have just been debating. My new clause would allow an employee to opt out at any time, but only from a future date; that is, it would not involve going back and refunding contributions, as an early opt-out under Clause 7 provides. Obviously people’s circumstances change; they may not be able to afford to continue their contributions or they may analyse that they will not receive enough back from future contributions, due to means-tested benefits or otherwise. The Explanatory Notes for Clause 7 say that active members of a scheme are free to cancel membership at any time, but there is nothing in the Bill to allow that. It may well be an intrinsic legal right within an occupational pension scheme, but in the context of the Bill it would be better to provide specifically for later opting-out. That would include the ability of the Secretary of State to prescribe the content of a notice and would deal with all the other matters that Clause 7 deals with in respect of early opt-outs. For example, it must surely be important that an individual is informed of the effect of his or her decision, in the same way as an early opt-out under Clause 7 will be. Presumably, it will be important to inform the individual of their rights to opt back in and the effect of automatic re-enrolment. The burden of my amendment is therefore to say to the Government that they should explicitly deal with opting out after the initial opt-out period, and that, even if that is not necessary as a matter of law, it would be better to control the circumstances and information flows in those cases. I should say that I drafted it on the basis of Clause 7 as it appears in the Bill and not as amended a few moments ago, so the amendment itself is not on all fours with Clause 7 as it will appear in the Bill. Still, if the Minister looked kindly on my amendment, that would not be an insuperable obstacle between now and Report. I beg to move.