Individuals’ retirement savings are set to be better protected under the new Pensions Bill.
Some had expressed concerns that those paying into auto-enrolment pensions could potentially lose their funds in the event of their scheme collapsing.
The Bill, which was recently announced in the Queen’s Speech, will provide extra supervision for ‘master trusts’. These trusts supply employers with occupational pension schemes.
Pension industry experts have previously warned that nearly a quarter of a million people were at risk of potentially losing their retirement savings, after a BBC investigation discovered that many master trusts were not large enough to survive.
Under the Bill, The Pensions Regulator (TPR) will be granted greater powers to authorise any schemes and take action where appropriate.
Master trusts will also need to demonstrate that they comply with strict new criteria before they can enter the market.
Lesley Titcomb, TPR’s chief executive, stated: ‘We have voiced concerns for some time about the need for stronger legislative standards for master trusts and have worked with government and other regulators to improve levels of protection for members’.
Furthermore, a new guidance body will also be established, amalgamating the Pensions Advisory Service, Pension Wise and the Money Advice Service. This body aims to help those retiring and individuals in debt.