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Pensions Bill

moved Amendment No. 56: 56: Clause 16, page 8, line 11, at end insert ““, and (c) it satisfies any further conditions prescribed.”” The noble Lord said: I shall speak also to the amendments grouped with Amendment No. 56. Qualifying schemes used for automatic enrolment will need to meet minimum standards beyond those set by the existing regulatory framework. This is the case for both workplace personal schemes and occupational schemes. The Bill already provides for certain minimum standards for schemes used under the employer duty; for example, the minimum contributions required for money purchase schemes at Clauses 19 and 25. It also contains powers in Clause 15 to prevent qualifying schemes requiring excessive charges or contributions from active members. We recognise, however, that it may be appropriate to introduce further safeguards specifically for automatically enrolled members. The market will undoubtedly develop up to 2012 and beyond. We therefore need to future-proof our policy, and may need to introduce additional qualifying criteria for schemes used for automatic enrolment. Amendment No. 56 will give the Secretary of State the flexibility to allow additional qualifying criteria for schemes used for automatic enrolment to be specified in secondary legislation if necessary. This power will be subject to the affirmative procedure to allow both Houses an opportunity to scrutinise any such requirements. Amendment No. 57 is a technical amendment to clarify the language in Clause 16 following Amendment No. 56. The noble Lord, Lord Oakeshott, and the noble Baronesses, Lady Thomas and Lady Greengross, are concerned about the level of charges in qualifying schemes. Our current evidence suggests that most occupational schemes have charges that enable individuals to accrue meaningful savings. The Pensions Commission found that charges in DC occupational schemes tend to be under 0.6 per cent, depending on the size of the employer. Similarly, we do not presently have reason to believe that charges to active members in workplace personal pensions are currently excessive. Although there is no comprehensive data, our understanding is that most large WPPs have charges of around 0.4 to 0.8 per cent annual management charge. Charges in group stakeholder pensions are capped at 1.5 per cent annual management charge for the first 10 years, and 1 per cent thereafter. We are commissioning research to help us understand more fully some aspects of the overall pensions market, the products within it and practices. As part of this we are exploring current practices in the WPP market, such as charging and the investment options provided. This research will inform our considerations on the need for additional qualifying criteria and our planned consultation with stakeholders. We will, of course, be seeking both the views of the industry around best practice in areas such as charging and approaches to default investments, and those of consumer representatives about what further safeguards, if any, are needed to ensure that individuals have the right level of protection in these schemes. Given these assurances I ask the noble Lord and the noble Baronesses not to press their amendments. I beg to move.