Hot on the heels of the Queen’s Speech, the DWP has published the Pensions Bill 2008, which had its first reading in the House of Commons on 5 December. The Bill largely relates to the proposed personal accounts system which the government is introducing with effect from 2012, and it extends the functions of the Personal Accounts Delivery Authority which was established by the Pensions Act 2007. The Bill contains requirements for employers automatically to enrol workers in the personal accounts scheme (subject to a right of opt-out) unless the worker is already a member of a qualifying occupational or personal pension scheme. Amendments are proposed to the stakeholder scheme legislation, for example to remove the statutory duty on employers to have a designated stakeholder pension scheme.
The Bill also contains measures to simplify and amend existing private and state pension legislation. Amongst other things, it proposes to abolish the concept of safeguarded rights (i.e. the contracted-out part of any rights which are subject to a pension sharing order on divorce or dissolution of a civil partnership). It will amend the revaluation requirement for deferred benefits in a final salary scheme so that, with effect from the commencement date, such benefits should be revalued by RPI subject to a cap of 2.5%.
A copy of the Bill is available at www.publications.parliament.uk/pa/cm200708/cmbills/025/2008025.pdf.
Explanatory notes to the Bill have been published separately and are available at www.publications.parliament.uk/pa/cm200708/cmbills/025/en/2008025en.pdf.