The Pensions Bill 2011 has completed Report Stage and Third Reading in the House of Commons. The next stage, provisionally scheduled for 31 October, is consideration by the Lords of the amendments proposed by the Commons. As both Houses must agree on the exact wording of the Bill, it may go back and forth between each House until agreement is reached – hence ‘Ping Pong’, the nickname of this stage. Although it is the last stage before Royal Assent, it can continue for some time. The latest Commons amendments which the Lords must now consider include:
- state pension age: delaying by six months the increase in state pension age to 66, i.e. by October, instead of April, 2020 (no change to equalisation at 65 by November 2018);
- automatic enrolment: enabling charges to be capped for deferred, as well as active, members of qualifying schemes;
definition of ‘money purchase’: because Bridge v Yates (see Pensions Update, July 2011) found that statute does not require the assets of money purchase schemes always to equal the liabilities, clarifying this definition retrospectively from 1 January 1997:
- to restrict money purchase benefits to mean benefits where “the rate or amount is calculated solely by reference to assets which must necessarily suffice”; and
- to specify that DC schemes which annuitise internally will no longer be money purchase schemes.
Despite press reports that the introduction of automatic enrolment is to be delayed, Pensions Minister Steve Webb has not unambiguously denied this but did say said during debate on the Bill: “We do not believe that this important programme should be delayed”.