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Pensions Bill [HL]

My Lords, I thank the noble Baroness, Lady Drake, for pinpointing her concerns around this. Let me try to address those issues. It is important that we try to disentangle the concerns surrounding the previous amendment from this amendment, which represents a fairly technical and, I will argue, wholly benign approach. Clearly this must be done by trustees who have a duty to pensioners and future pensioners. They can change the rules only to facilitate automatic enrolment or to raise the contribution rate to comply with relevant scheme quality requirements, and those changes can be made only with the consent of the employer. So it is an upwards-only adjustment in practice under this amendment—I am not talking about the issues that we discussed under the previous amendment. The trustees must consider the interests of existing members in that decision. On whether employers will be able to manipulate the certification requirements by transferring workers from one tier of the test to another, which is behind the noble Baroness’s concern, we want to encourage employers wherever possible to retain their existing schemes, which in many cases will have been structured to suit the profile of their workforce and their business model. That flexibility is important to employers. We are therefore making it easier for them, in liaison with their trustees, to meet the automatic enrolment requirements by means such as the self-certification test for money purchase schemes and hybrids. If a large employer wanted to take advantage of the greater flexibility of the first tier of the test—the 9 per cent contribution tier—it would have to consult the workers if the scheme on offer was an occupational pension and doing so meant a rise in contribution for workers. Any change resulting in a reduction in the amount of employer contribution in respect of a money purchase occupational scheme would require larger employers to consult their affected workers. Employers using contract-based schemes to discharge their enrolment duties would have to alter the individual contracts. Let me briefly recap the Government’s case for making the amendments. The amendment relating to Section 32 of the Pensions Act 2008 will make it easier for employers and trustees to make improvements to their schemes so that they meet the requirements of the self-certification test. The amendment to Section 30 of the Pensions Act 2008 will give employers greater flexibility where the transitional arrangements for defined benefit and hybrid schemes cease to apply. In such cases, the amendment will allow employers to use personal pension schemes, as well as money purchase, defined benefit and hybrid schemes, as replacement schemes. These two minor and technical amendments will provide employers with greater flexibility. Amendment 44 agreed. Clause 10, as amended, agreed. Clause 11 agreed. Amendment 45 Moved by