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Pensions Bill

moved Amendment No. 83: 83: Before Clause 28, insert the following new Clause— ““Effect of freezing order or assessment period (1) Where a jobholder is an active member of a qualifying scheme and a freezing event occurs in relation to the scheme, the jobholder does not, for the purposes of this Chapter, cease to be an active member of the scheme, and the scheme does not, for those purposes, cease to be a qualifying scheme, by virtue of any relevant provision. (2) Where a worker is an active member of a scheme that satisfies the requirements of section 8 and a freezing event occurs in relation to the scheme, the worker does not, for the purposes of section 8(1)(c), cease to be an active member of the scheme by virtue of any relevant provision. (3) In this section— ““freezing event”” in relation to a scheme means— (a) the making of a freezing order under section 23 of the Pensions Act 2004 (c. 35) in relation to the scheme, or (b) the beginning of an assessment period within the meaning of section 132 of that Act in relation to the scheme; ““relevant provision”” means— (a) in relation to a freezing order, provision contained in the order, or the provision made with respect to the order by section 23 of the Pensions Act 2004 (c. 35); (b) in relation to an assessment period, the provision made with respect to the period by section 133 of that Act.”” The noble Lord said: Clause 2 establishes the right of a jobholder to remain an active participant in workplace pension saving by requiring employers to maintain active qualifying scheme membership. This government amendment enables a scheme to retain its qualifying status under the employer duty when the pension protection fund or the pensions regulator has become involved and the benefit accrual is frozen. A freeze in a scheme is a way of effectively pressing a pause button on the scheme activity so that an assessment can be made about the risk to security of members’ benefits and to the PPF. Amendment No. 83 makes clear that in such cases the jobholders continue to be active members and that the scheme does not cease to qualify. Therefore the employer continues to meet the employer duty in respect of jobholders in that frozen scheme. Without this protection, the employer would have to designate alternative qualifying provision at least for the duration of the period that the accruals were frozen. This is likely to be a relatively short period and doing so would disrupt scheme membership, increase the administrative costs for the employers who may be already financially vulnerable or, more likely, encourage employers to level down. Once the freezing order is lifted or the PPF assessment ends, the employer duties continue as normal in respect of jobholders who must be enrolled into qualifying pension provision. I beg to move.