The UK’s Pension Scheme Bill was granted royal assent and became law last week on Thursday the 11th of February 2020, with the government describing it as ‘’the biggest shake-up of UK pensions for decades.’’
The Act will bring in some major changes to pension schemes, including boosting the powers of The Pensions Regulator (TPR) with new criminal and civil penalties and providing for the creation of Collective Defined Contribution (CDC) schemes.
The new act will strengthen protections for pension savers by extending the powers of the Pensions Regulators and introducing the ability to issue civil penalties. Civil penalties can be issued up to £1 million and three new criminal offences were also introduced.
A tough new sentence will be aimed at employers making reckless decisions by running pension schemes into the ground or plunder pots to line their own pockets. The maximum penalty can be seven years in prison.
The minister for pensions, Guy Opperman, said: ‘’ This Act makes our pensions safer, better and greener, as we look to build back better from the pandemic. Its passage will reassure savers that they can, and will, have a retirement they deserve.’’
Pension dashboards will be introduced, with one single platform for easy access. Savers will be able to access and review pension pots, calculate their monthly retirement income and learn how to improve their retirement prospects on the platform.
The Act will also ensure pensions contribute to the transition to a net-zero future through climate risk reporting, and to changes to requirements around pension scheme funding to enhance financial sustainability.
Furthermore, the Act legislates for the creation of a new style of pension scheme, Collective Defined Contributions (CDCs). This style of pension scheme will be developed in cooperation with trade unions. CDCs will have the potential to increase returns for millions while being more sustainable for both workers and employers.
The Act will slowly come into force in the up-and-coming months with more details and guidelines.
For more information, please visit the government’s website here.
We offer a comprehensive range of services and informed advice for the elderly. If you’d like to find out more about your rights when it comes to your pension or if you think the above laws might affect you, please contact us today.