The Pensions Bill 2013 was presented to the House of Commons on 9 May and was published on 10 May 2013, following a period of pre-legislative scrutiny of the draft version of the bill since 18 January 2013. An explanatory note and a Ministerial Statement by Steve Webb were also released.
The bill covers three main areas:
- the introduction of the single-tier state pension from April 2016, which area is central to the Bill. A single-tier system replaces the basic state pension and the state second pension and will constitute a flat-rate payment set above the basic level of means-tested support.
- the abolition of salary-related pension schemes being able to contract out of the state second pension from April 2016. Provisions have been included to protect members’ accrued contracted-out rights. Moreover, the bill introduces a new statutory overriding power allowing employers of contracted-out schemes to amend their scheme’s rules to mitigate against the loss of the contracted-out rebate.
several changes to private pension schemes:
- a new framework for the automatic transfer of small DC pension pots (less than £10,000);
- provisions abolishing short-service refunds from occupational DC schemes;
- a new statutory objective of tPR ‘to minimise any adverse impact on the sustainable growth of an employer’ in relation to scheme funding;
- a regulation-making power allowing ministers to ban exercises designed to incentivise a member to transfer his pension rights from a salary-related occupational pension scheme to alternative schemes; and
- measures relating to auto-enrolment, including the power to make general exceptions from the requirement to automatically enrol workers.
The Bill received its Second Reading in the House of Commons on 1 June 2013, has progressed to the Commons Committee stage on 25 and 27 June and will be committed to a Public Bill Committee on 2 and 4 July. This Committee will be open to receive written evidence on the Bill until 11 July. To assist with the scrutiny of the bill, the Pensions Bill 2013-14 Keeling versions were published on 26 June demonstrating the changes that the bill would bring about to existing pensions legislation.