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Pensions Bill

I am sure that we all agree that employers should be prevented from screening out job applicants according to whether or not they may opt out of pension scheme membership. The aim of Clause 49, which was introduced by a government amendment in another place, is to prohibit certain forms of employer behaviour designed to give the indication that the job on offer is conditional on the applicant agreeing to opt out of pension scheme membership. We do not expect the majority of employers to behave in this way, but it would be naive not to anticipate that some may and we cannot allow them to gain an unfair commercial advantage by avoiding their responsibilities in this way. We are determined that employers should not be allowed to sift out applicants who wish to remain in pension schemes. The noble Lord’s amendment would limit the scope of that prohibition by covering only questions from the employer and not statements, resulting in individuals being offered less protection. It would mean that employers could not make a statement, for example, in an advertisement indicating that non-membership of a pension scheme was required and that a job was therefore conditional on an individual’s opt-out decision. Those statements would not be caught, whereas under the prohibition as it currently stands they would. There is also a risk that some employers would exploit that loophole and deliberately frame questions and statements that would otherwise meet the test in Clause 49(1). The clause as drafted will provide an effective deterrent for the small number of employers who might be tempted to try to avoid their employer duties in this way. The noble Lords ask how such compliance will be enforced. At the end of the day, whether the prohibition had been breached would be a question of fact and individual circumstances. That might come to the attention of the regulator in a variety of ways; for example, communication from an individual employee who has been subjected to this treatment. The arrangements within the Bill for the Pensions Regulator to seek facts and get information are the way that it would proceed. It is difficult to be specific, but I am sure the noble Lord will recognise that whether the prohibition was breached would depend on the facts of each situation.