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Pensions Bill

moved Amendment No. 91B: 91B: Clause 34, page 16, line 3, after ““of”” insert ““a contravention of section 2(1) or”” The noble Lord said: I shall speak also to the other amendments in the group. It is essential that a worker’s decision on whether to join a qualifying pension scheme is taken freely and without influence from the employer. We know that the vast majority of employers will not put pressure on their workers around this decision but there is a risk that a minority might, and we have recognised from the start that that risk must be properly managed. We have listened to the repeated concerns of the Opposition in the other place that existing measures in the Bill did not go far enough in this regard and several stakeholders, including the Equality and Human Rights Commission and the TUC, have also expressed concern. We now propose to introduce an amendment that I hope will satisfy those calls for a stronger approach by sending out the clearest possible message to employers that trying to encourage or force workers to opt out from, or cease, pension scheme membership is unacceptable. Government Amendment No. 106A will introduce a prohibition on such behaviour. The prohibition will be enforceable by the Pensions Regulator alongside its new role of maximising compliance with the employer duties in Chapter 1 and the prohibited recruitment conduct clause, Clause 49, in Chapter 3. The regulator will have available to it the full suite of enforcement powers appropriate to this role. This group of amendments contains proposed consequential amendments to several of the Chapter 2 compliance clauses. These changes will enable the regulator, where it believes that an employer has contravened the prohibition, to be able to investigate matters and, if appropriate, issue a compliance notice setting out what action is needed to remedy the contravention. If that notice is not complied with, the regulator will be able to issue penalty and escalating-penalty notices, just as it can in relation to failures to comply with Chapter 1 employer duties. However, the aim of compliance activity in this area is not simply to punish non-compliant employers in order to deter them and others from such behaviour in the future. We want to ensure that individuals are, so far as possible, put back into the position they would have been in if the inducement had not happened. Employers could therefore be required by a compliance notice to enrol workers back into qualifying scheme membership where appropriate and to make back payments of employer contributions owed from the time the inducement occurred. We are aware that going back in time like this where an opt-out is found to have been induced could create a risk of uncertainty for all parties involved. To manage that risk, we feel it is important that there are time limits within which complaints can be made or investigations launched. These limits should also discourage the possibility of vexatious claims from some individuals. We understand that there are widely differing views among stakeholders on how long that period of time should be. We wish to consult on that to ensure that the views of all interested parties are considered before determining the issue in regulations. I shall briefly explain the other amendments in this group, which are consequential upon the new clause. Amendment No. 91B amends Clause 34 in order to allow for the calculation and payment of contributions that have been unpaid as a result of the induced opt-out or cessation of membership. It does so by extending Clause 34 to contraventions of Clause 2(1), and subsection (2) of the new inducement clause provides that Clause 34 applies to a contravention of the inducements clause as it applies in relation to a contravention of Clause 2(1). Amendments Nos. 98B and 99ZA ensure that the regulator’s powers to require information and enter premises are available to it in the context of its role in maximising compliance with the two Chapter 3 prohibitions on inducements and certain forms of recruitment conduct. Government Amendment No. 99ZA also ensures that these powers are available in respect of any corresponding provision in Northern Ireland. I hope that these amendments will find favour, and I beg to move.