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Pensions Bill

I am surprised at the reaction to these modest provisions. The noble Baroness asked what would encourage employers to make changes under their schemes to comply with the auto-enrolment and quality requirements of the Bill. It is fairly obvious: they would want to have, as they do now, good quality provision for their employees. They see the competitive advantage in many cases of good scheme provision and they do not want unwittingly to fall foul of the rules relating to qualifying earnings. Qualifying earnings underlie the amendments and other matters that we will discuss. The Government’s aim is to maximise the number of new savers and savings and to support existing pensions arrangements. We do not want to disrupt arrangements that offer good pension outcomes for savers. As noble Lords know, a number of stakeholders raised concerns about the practical arrangements for dealing with scheme qualification in relation to qualifying earnings. We discussed some of these when we debated amendments to Clauses 12 and 19. Since then, the Minister of State for Pensions Reform and I have been talking to stakeholders about how we can make the test as simple as possible while still preserving the new minimum level of pensions savings. We focused on a suggestion by a group of four stakeholders—the ABI, NAPF, ICAEW and SPC—the essence of which is annual reconciliation, which we have also been thinking about for a while. A key objective for the Government is to avoid disruption for existing schemes so that good arrangements may continue to function beyond 2012 without unnecessary changes or additional administrative processes. More detailed discussions with key stakeholders are already planned, and I fully expect to be able to be clear about our approach on Report. I hope that that has reassured the noble Baroness and indeed the noble Lord, Lord Oakeshott.