The King's Speech, which outlines the government’s legislative agenda, did not include a pensions bill, contrary to speculation. The industry now looks to the Autumn Statement for updates.

 

Held on Tuesday, the speech by King Charles III set out the government’s legislative agenda for the parliamentary session. 

This year it focussed on oil and gas licensing, alongside promises to attract “record levels” of investment in renewable energy. Other items included a new school leaver qualification, proposals to get more young people to choose apprenticeships over university degrees, legislation to create a “smoke free generation”, a bill to promote trade, support for creative industries, and increased powers for police to prevent certain crimes, among others. 

 

Following July’s ambitious proposals around pensions and productive finance, dubbed the Mansion House reforms, the absence of pensions from the legislative agenda comes as a disappointment to some. 

 

“We are aware that there is likely to be little time to enact new legislation before the next election, but there are a number of issues that remain unresolved, and the absence of a pensions bill means that there is no prospect of addressing these issues soon,” said the president of the Pensions Management Institute, Robert Wakefield, singling out small pots consolidation as the most pressing of these issues.  

 

The Pensions and Lifetime Savings Association noted that some, but not all, of the proposed pension reforms require primary legislation. 

 

The absence of a pensions bill in the King’s Speech means there will be no statutory basis for initiatives such as support for savers at retirement, DB superfunds and small pots, but the PLSA still expects that the government and regulators will put out guidance and set standards, said Nigel Peaple, director policy and advocacy. He added that recent speeches by the chief executive of the Pensions Regulator, Nausicaa Delfas, on DB consolidation and value for money have made that clear. 

 

He said the PLSA also expects that pensions minister Laura Trott will “shortly propose secondary legislation to increase automatic enrolment contributions”, after the government supported a private members bill to remove the lower earnings threshold and reduce the eligible age to 18. 

 

The PLSA now thinks pensions will be included in the Autumn Statement, said Peaple.

Iain McLellan, a director at consultancy Isio, agreed the absence of a pensions bill means several of the government’s pensions policy threads may be stalled for a while, particularly those in the DC market.

While superfunds regulation and the broadening out of collective DC to multi-employer schemes would require legislation they could "still see some element of progress being made", he argued. 

At the chancellor's Autumn Statement, he expects the lifetime allowance to be fully removed, and announcements around productive finance.
 
"And maybe, just maybe, we’ll see the tax charge applied when surpluses are returned from DB schemes to their sponsors reduced," he added, following a consultation on easier access to surplus.
 

In addition to the Mansion House proposals and productive finance agenda, McLellan noted that finalised DB funding regulations are still outstanding and could soon be published.

 

"While it may be disappointing to see no pensions bill among His Majesty’s announcements today, that doesn’t mean that pensions reform will grind to a halt," he said.

   

Aegon’s pensions director Steven Cameron also believes various items could appear in the chancellor’s Autumn Statement, due on 22 November. Cameron highlighted the value for money framework for defined contribution pensions, which aims to force some schemes into consolidation. 

 

Other items that have been discussed previously are extending collective DC pensions to schemes for non-associated employers, proposals for dealing with the proliferation of small deferred pension pots, and a wider range of ‘at retirement’ choices for members of trust-based schemes, he suggested. 

  

“While there’s no pensions bill to take these forward, we believe they remain government priorities and await clarity on next steps. We encourage the government to prioritise those initiatives with the greatest potential to boost retirement outcomes of individual members,” said Cameron. 

 

Actuaries are also unhappy, as the King’s Speech equally omitted to introduce an audit bill and timetable for the reform of actuarial regulation, five years after a review of the Financial Reporting Council by Sir John Kingman. 

 

“This means reforms to the FRC and actuarial regulation are now well underway without any statutory underpinning, requiring us to work in a grey area of oversight for an unspecified period, which we do not believe is in the public interest,” said Kalpana Shah, president of the Institute and Faculty of Actuaries. 

 

She said the work of actuaries was essential, ensuring that people receive the pensions they are entitled to, insurance products are priced accurately for customers and that companies hold sufficient capital to pay claims to their customers.  

 

“The ongoing lack of regulatory clarity undermines our profession and our members’ ability to protect the financial interests of the public,” she said.