The UK’s Pension Schemes Bill has received royal assent today (29 April) after a lengthy period of ‘ping pong’ between the Commons and the House of Lords, with peers pushing back on the scope of the government’s proposed mandation powers.
The powers would have allowed the government to enforce that pension schemes meet specified investment targets in line with the Mansion House Accord, a voluntary agreement to invest 10 per cent of default defined contribution assets in private markets, with five per cent allocated to the UK.
The Bill has been passed back and forth as peers battled to get the mandation clause removed, eventually leading to a watered down version that is narrower in scope than the original text.
The final text said the government would have to publish a report identifying barriers to UK and private markets investment and set out steps it has taken to address these barriers.
While the mandation clause has been a key focus of the Bill, the legislation aims to generally improve the retirement outcomes for millions of people in the UK, including by encouraging schemes to invest in more productive assets.
Lisa Picardo, chief business officer at PensionBee, said: “After months of parliamentary deadlock, the government’s late concession is a welcome watering down of the controversial mandation clause.
“The compromise offers some important guardrails and restrictions that have been agreed since the original clause appeared – caps aligned with the voluntary Mansion House Accord, limiting it to auto-enrolment defaults as opposed to entire schemes, a single-use restriction, an earlier 2032 sunset and a full repeal in 2035.”
