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Pensions Bill

moved Amendment No. 84: 84: Clause 28, page 13, line 21, after first ““scheme”” insert ““— (a) ”” The noble Lord said: I shall speak also to government Amendment No. 85. Clause 28 enables trustees, with the employer’s consent, to make changes to an occupational scheme so that it can be used for automatic enrolment under the employer duty. We want to do as much as possible to encourage employers to retain their existing generous pension provision, so we have tabled Amendments Nos. 84 and 85 to extend the modification power. The amendments enable trustees, with the employer’s consent, to change the rules of a scheme to increase the contribution rate and the basis of its calculation in order to satisfy the quality requirements for both occupational money purchase and certain hybrid schemes. As we have already discussed, money purchase schemes must require contributions of at least 8 per cent of qualifying earnings of which a minimum of 3 per cent must be paid by the employer. We recognise that many schemes provide for higher contributions than the minimum default required under the reforms, and that such schemes will satisfy the quality requirement without needing to make adjustments. However, other schemes will not, so the trustees and the employer may want to make changes to the rules to meet the required standard. These amendments to Clause 28 will facilitate such changes. This may be particularly helpful to employers offering schemes with restrictive rules that might otherwise prevent such changes being made. Where the power under Clause 28 is used, employers will not be required to consult scheme members on such modifications. However, we have ensured that the necessary safeguards are in place to protect members’ interests. Changes made under the proposed amended Clause 28 must increase contributions. Any other changes can be made using provisions elsewhere in pensions legislation and will be subject to the normal rules on consultation with scheme members. This is to discourage levelling-down and retain the existing protection for scheme members through the consultation requirements. I hope noble Lords will support the amendments. I beg to move.