The Pension Schemes Bill from the Department of Working Pensions includes provisions to strengthen legislation on exit charges.
Regulations for people on master trust schemes, requiring them to meet higher operating criteria to avoid risks of their savings are also contained in the newly published bill.
The bill introduces a cap on early exit charges for people in occupational pension schemes wanting to access their savings.
Master trust schemes will need to meet the following standards:
- Persons involved in the scheme are fit and proper
- The scheme is financially sustainable
- The scheme meets requirements to provide assurance on financial situation
- The systems and process requirements of the scheme are sufficient for governance
- The scheme has an adequate continuity strategy.
Richard Harrington, minister for pensions, said:
“We want to make sure that people saving into master trusts enjoy the same protection as everyone else, which is why we are levelling-up that protection, to give these savers more confidence in their pension schemes.”
Andrew Warwick Thompson, executive director for regulatory policy at The Pensions Regulator, said:
“There are currently tens of thousands of DC schemes, many of which are struggling to meet adequate standards of governance and administration, and are unlikely to be able to provide value for money for their members.
“The consolidation of such schemes in to authorised master trusts is likely to be in the best long-term interests of both their members and sponsors.”