Pensions Bulletin 2023/06
Our viewpoint
16 February 2023
- Still no sign of the Audit Reform Bill
- The Government’s Brexit Bill runs into trouble
- Pensions Regulator review announced
- Pensions Regulator to lead on Pensions Act 2021 prosecutions
- More pensions dashboard videos appear
Still no sign of the Audit Reform Bill
Despite recent probing by Parliamentarians, there is no news from the Government as to when it may introduce the Bill necessary to create the Audit, Reporting and Governance Authority (ARGA) – the successor to the Financial Reporting Council.
It is now nearly five years since the Government called for a “root and branch” review of the FRC, and nearly four years since it largely accepted the recommendations of Sir John Kingman’s review, promising to “move swiftly” to replace the FRC. It is also coming up to a year since the intention to introduce a draft Bill was signalled in the Queen’s Speech, following which the Government published its response to a White Paper (see Pensions Bulletin 2022/21).
On 7 February 2023 the sponsoring Government department was completely re-organised by the Prime Minister, with it seems the new Department for Business and Trade now taking responsibility for the Bill.
On 8 February, in response to a parliamentary question from Green party peer Baroness Bennett, Lord Callanan could only say that “The Government is committed to legislating when Parliamentary time allows”.
On 9 February the FRC announced that its Chief Executive, Sir Jon Thompson, who had been appointed by the Government in 2019 with a specific remit to transform the FRC into ARGA, is to stand down following his being appointed as Chair of HS2.
Comment
If the Government is to introduce this Bill it would seem to make sense to flag it at the 15 March 2023 Budget and publish it shortly afterwards. If there remains no sign of it by the time of the King’s Speech this Autumn the Government will have run out of road.
For the FRC this is all very difficult. Their efforts to turn themselves into ARGA are completely reliant on the passage of a Bill that has yet to be seen.
The Government’s Brexit Bill runs into trouble
As expected, the Government Bill that seeks to bring to an end the special status of retained EU law in the UK statute book ran into widespread opposition in the House of Lords at Second Reading on 6 February 2023, with many peers from all parties, including Conservative peers, speaking against it. The Retained EU Law (Revocation and Reform) Bill now awaits Committee stage, scheduled to start on 23 February 2023, where it will be dissected line by line by a Committee of the Whole House.
Numerous amendments have been moved, many on a cross-party basis, one of which has the effect of removing the much-feared 31 December 2023 automatic sunset for any regulation falling within scope, whether or not it has been identified by then. Instead, as a result of the proposed amendment, retained EU law would remain on the statute book, rather than disappearing, and only legislation identified for and approved by Parliament would be revoked.
During the Second Reading debate, one opposition peer singled out the EU-originated TUPE legislation (which includes some pension protections), asking what the Government intended to do with it. There was a stock response that, as with other retained EU law, the Government would later determine whether or not to save it from the sunset.
Comment
The Lords seem determined to ensure that Parliament ‘takes back control’ of the job of reviewing and dispensing with unnecessary EU-originated law. There is every possibility of a tussle between the Houses. Until we see the final shape of the Bill it is not possible to work through what the consequences might be for EU-originated pensions legislation.
Pensions Regulator review announced
The DWP has announced the appointment of Mary Starks to lead a review of the Pensions Regulator. The review will examine how the Regulator is performing its role and where it can improve, providing greater efficiency and value to taxpayers.
The review is in line with the expectation that public bodies are reviewed each Parliament. Mary Starks has been asked to deliver the report by May 2023.
Pensions Regulator to lead on Pensions Act 2021 prosecutions
A new Memorandum of Understanding between the Department for Work and Pensions and the Pensions Regulator has been published by the Regulator in relation to the criminal offences introduced by the Pension Schemes Act 2021.
The MOU confirms that, whilst both the Secretary of State and the Pensions Regulator are designated prosecutors for these offences in England and Wales, in the normal course of events, the Pensions Regulator will take the lead. The MOU also deals with some ancillary issues.
More pensions dashboard videos appear
The Pensions Dashboards Programme is creating a series of explainer videos to dispel myths around pensions dashboards. The series has been launched with two videos – the first dispelling the notion that there will only be one pensions dashboard and the second that you have to pay to use dashboards. More are promised in the coming weeks.