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The Opposition recognise and support the need to ensure that there is adequate regulation for master trusts as they have developed since the introduction of auto-enrolment, but the point made about the missed opportunity was right.
As the Secretary of State set out, the Bill focuses on defined contribution occupational pension schemes alone, defining regulation of master trust schemes which provide centralised workplace pension funds for several companies at the same time and have largely emerged as a result of the development of auto-enrolment in pensions. It gives the Pensions Regulator responsibility to authorise those schemes that meet certain criteria. It also provides for a funder of last resort in cases where a master trust fails. Sadly, this is something we hear too much about with too many other pension schemes. Finally, the Bill gives the Pensions Regulator the ability to withdraw authorisation from a master trust and sets out the criteria for triggering such events should a master trust face difficulty.
As I said, the measures in the Bill are slightly overdue. In April 2014, it was estimated that master trusts accounted for two-thirds of people who had been auto-enrolled. Master trusts operate on a scale that is unprecedented in occupational pensions and most are run on a profit basis. Currently, however, they are not subject to the same regulation as contract-based workplace pensions. There is no requirement for a licence to operate and limited barriers to entry. There is also little guidance on who can become a trustee and no infrastructure in place to support the wind-up of a failed trust.
Given that the savings and pensions of millions of employees and their employer contributions are at risk, we cannot allow this to continue. We support the Bill, which is vital to putting the auto-enrolment system on the strongest possible footing, but we will look to strengthen it where we can, for example by building on our amendment on the funder of last resort. By protecting members from suffering financial detriment, while promoting good governance and a level playing field for those in the sector, the Bill should ensure that the system is a secure and trusted means of saving in the future.
Before I come on to specific elements of the Bill, I would like to expand on how disappointed I am, and how millions of others will be, with how limited the Bill is. Perhaps the Secretary of State will surprise us, but I think this is likely to be the only pensions Bill in this Parliament. Significant issues are already arising relating to both state and occupational pension provision. It is therefore disappointing, if we are to see no other Bill, that those issues are not being addressed.
One key issue is that of the WASPI women: the Women Against State Pension Inequality Campaign. These women, and some men, have been left behind by the Government’s poorly managed accelerated equalisation of the state pension age. Over 2.5 million women born in the 1950s made their plans for retirement only to find that their retirement age had been quietly pushed back by the coalition Government.