The House of Lords has rejected the Government’s latest amendment to the Pension Scheme Bill by 234 votes to 152, despite Government attempts to water down the Bill.
The change was made by the Government after there was concern about the original wording, which could have allowed ministers to force pension funds to invest in risky assets, according to critics.
However, despite the watering down of the Bill, The House of Lords has rejected the amendment to its proposed mandate as not going far enough.
The Bill allows vital reforms that stand to reduce the cost of administering pensions, remove complexity for savers and help ensure schemes are maximising the value they provide.
Steve Webb, former pensions minister and partner at consultancy LCP, has called on the Government to start listening to the Lords concerns or risk the Bill not being able to pass though Parliament in this session.
He said: “Ministers should recognise that there is a reason for the continued and cross-party opposition to their plans, which is that mandation is a fundamentally flawed policy. When schemes have voluntarily entered into a commitment via the Mansion House Accord process, the decision by the government to try to enforce this pledge through legislation is not acting in good faith.
“Mansion House signatories are clear that they will strive for these targets provided that they think doing so is in members’ interests, and trustees and providers will rightly resist any attempt to over-ride that judgment.
“There is so much that is good in the Pension Schemes Bill, it would be wholly unacceptable if the government’s stubbornness - on a power that they say they don’t even plan to use – put the whole Bill at risk. It is time that Ministers stepped back from the brink and instead started listening to the legitimate concerns that are being raised”.