16 May 2016

MPs request overhaul of pension regulation

Major concerns have been highlighted by MPs on the work and pensions select committee, regarding governing auto-enrolment master trusts where such schemes are investing their members’ funds, calling for an overhaul of the regulation.

In a report released on the 15th May, the committee requested a pension’s bill to be included in the Queens Speech on the 18th May to address the ‘risk from weaknesses in pension regulation’.

The report raised concerns about multi-employer occupational schemes where each employer has its own division within the arrangement, otherwise known as master trusts.

It stated that gaps in the current rules have allowed ‘potentially unstable’ master trusts onto the market with employers putting their scheme members at risk of losing savings for their retirement.

The Pension’s Select Committee also expressed their concerns of the incoming Lifetime Isa stating it could ‘distract from the auto-enrolment, with employees potentially opting out of their workplace scheme to put savings in a lifetime Isa’.

Frank Field MP, committee chairman, has put governance and investment oversight at the top of the list of regulatory priorities.

“Auto-enrolment has been a tremendous success that will ultimately see approximately nine million people newly saving, or saving more, in a pension” he said.

“Crucially now we must do much more to ensure people’s savings are put in the best possible place, and are secure. To this end, we greatly look forward to seeing a Pension

Bill in the Queen’s Speech this week. This is what we and others have been calling for.”

The committee have recommended that the government improve its communication with businesses trying to put pension schemes in place.

By Samantha Atherton