The Pensions and Lifetime Savings Association (PLSA) said it supports the introduction of the Pension Schemes Bill.

The mammoth new bill was laid before Parliament last week.

Zoe Alexander, director of policy and advocacy at the PLSA, said: “The introduction of the Pension Schemes Bill is a significant milestone, bringing forward necessary legislation to enact important reforms that have the full backing of the pensions industry.

“This includes small pots consolidation, the Value for Money regime, decumulation options and changes to give DB funds more options for securing member benefits over the long-term.

“Once fully implemented, these measures should reduce the cost of administering pensions, remove complexity for savers and help ensure schemes are maximising the value they provide members.”

A default method to consolidate small DC pots will help savers manage their retirement savings more easily and reduce costs, the PLSA said. The Value for Money framework will help employers and schemes focus on overall value, rather than just cost.

Additionally, it said the Association supports the Government’s decision to legislate requiring schemes to offer default retirement income solutions, and that they have acknowledged the importance of communications and guidance to help members navigate their options.

The PLSA said: “This means savers will no longer face a lottery on whether their scheme offers good value access options, and will provide more regulatory certainty to schemes themselves.”

Ms Alexander said: “The Bill also includes a broad reserve power to enable Government to direct how savers’ money is invested. We believe that the best way of ensuring good returns for members is for investments to be undertaken on a voluntary, not a mandatory basis.

“We also note powers being taken to specify required investment capability for schemes, and to direct LGPS funds to merge with specific pools. All of these powers will require careful scrutiny.”

The PLSA said the timeline for delivering and implementing the LGPS changes is “overly ambitious, especially in the context of wider local government reforms, and recent elections.”

It also welcomed changes to the rules governing the Pension Protection Fund (PPF) levy that remove the barrier that has so far prevented it from being lowered to zero. “This levy represents a significant cost for pension schemes and their sponsors, and we welcome this change.”

Ms Alexander added: “The PLSA looks forward to working with the Government to make sure this Bill delivers on its full potential to improve outcomes for savers over the next decade and beyond.”