Clause 21 - Consequences of freezing order
Pensions Bill
10:15 am
Mr Chris Pond (Parliamentary Under-Secretary, Department for Work and Pensions; Gravesham, Labour)
I am happy to give a quick clarification—I am sure that the Committee will be pleased if it is quick.
The clause sets out the consequences of a freezing order on a scheme. The power to freeze a scheme will be a new situation for schemes, so we want to set out the consequences clearly in the Bill. Trustees need to be certain about the effect of freezing orders on consequential matters such as accrual of increases, and whether they can comply with a pension sharing order.
It is necessary to make any action in contravention of the freezing order automatically void, to ensure that it has sufficient effect, but the regulator has discretion to validate actions because we must also ensure that we have a flexible and responsive regulator. The clause determines that any action in contravention of a freezing order will be void unless the regulator chooses to validate it, as permitted by clause 23, and it gives the regulator the power to impose a penalty on the trustees or managers of a scheme if they fail to take all reasonable steps to comply with a freezing order.