Measures to encourage savers to seek pension guidance rejected by MPs 18 November 2020
The final reading of the Pension Schemes Bill, on 16 November 2020, saw MPs reject an amendment which would have meant that it would be mandatory for the Government to contact savers five years before the date that they can access their pension pot, to offer them an appointment with Pension Wise. Stephen Timms, the chairman of the work and pensions committee, put forward the amendment, even though a comparable amendment was withdrawn in the previous reading of the Bill. Mr. Timms stated that encouraging people to attend a guidance appointment would help to ensure that they do not get scammed. He commented:
“A significantly higher number of Pension Wise users than non-users say that they are very or fairly confident about avoiding pension scams, having had an interview with Pension Wise.
The default ought to be that people are given an appointment.”
The Bill also includes rules relating to pension dashboards, collective defined contribution schemes and additional powers that will be granted to The Pensions Regulator. It was reintroduced to the House of Lords on 7 January 2020 after the late general election in December delayed its discussion in parliament. It was delayed further because the Government has had to focus its attention on legislation designed to fight the outbreak of coronavirus.
Pensions Minister, Guy Opperman said:
“I am afraid the reality is that Labour’s proposals would direct investment, breach fiduciary duties and lead to divestment and negative outcomes.
We want the transformation of the United Kingdom economy and the retrofitting of the country to happen in a partnership with business, legislators, pension schemes and citizens, but I am afraid the amendment would negatively affect that. It would be entirely the wrong way forward.”
The Bill will now be returned to the House of Lords for the consideration of amendments, and this will be the last stage that needs to be completed prior to the Bill receiving Royal Assent and becoming law.
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The Pensions Regulator launches new campaign 19 November 2020
The Pensions Regulator (TPR) has launched a new campaign that aims to combat pension scams. Pension providers, trustees and administrators are being encouraged to assist in protecting savers who are considering cashing in their pensions by notifying them of the risks, educating them on the topic of current and emerging scam tactics, and by carrying out relevant diligence. It is no secret that pension scams ruin lives, and on average, victims of those scams lose between £1,000 and £500,000 from their saving pots. Businesses are being urged to support the TPR’s latest campaign and trustees, providers and administrators are being asked to take the pledge to combat pension scams and to commit to follow the principles in order to ensure that they protect scheme members.
Anyone agreeing to make the pledge will agree to meet six pledge steps:
• Frequently advising members of the risks of scams • Encouraging those who request cash drawdowns to contact The Pensions Advisory Service to receive free, impartial guidance • Learning the warning signs of scams and best practice for transfers • Taking appropriate due diligence measures and documenting transfer processes • Communicating concerns to members where high-risk transfers are being made • Reporting concerns related to suspected scams to the member and authorities
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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