New Clause 5 - Duty to act in the best interests of members

Part of Pension Schemes Bill – in a Public Bill Committee at 2:00 pm on 4th November 2014.

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‘(1) Regulations may impose a duty on the managers of a relevant non-trust based scheme to act in the best interests of members when taking decisions of a specified description.

(2) In this section “relevant non-trust based scheme” means a non-trust based scheme that is—

(a) a shared risk scheme, or

(b) a defined contributions scheme under which any of the benefits that may be provided are collective benefits.

(3) Regulations under this section—

(a) may provide for the duty to act in the best interests of members to override obligations that are inconsistent with that duty (including obligations imposed by any instrument, enactment or rule of law), but

(b) do not otherwise affect any duty that might arise apart from this section.

(4) Regulations under this section may provide for the consequences of a manager breaching (or threatening to breach) the duty to act in the best interests of members to be the same as the consequences of breaching (or threatening to breach) a fiduciary duty owed by the manager to the members and, accordingly, for the duty to be enforceable in the same way as a fiduciary duty.

(5) In this section—

“collective benefit” has the meaning given by section19;

“defined contributions scheme” has the meaning given by section4;

“non-trust based scheme” means a scheme that is not established under a trust;

“shared risk scheme” has the meaning given by section3.” —(Steve Webb.)