Pensions Act 2004
The Pensions Act 2004, which enables a number of the policies outlined in this section, received Royal Assent on 18 November 2004, following publication of the Pensions Bill, the Government's Green Paper 'Simplicity, security and choice: Working and saving for retirement' in December 2002 and 'Simplicity, security and choice: Action on occupational pensions' in June 2003.
- Read the Pensions Act 2004 on the HMSO website
- Read Simplicity,
security and choice: Working and saving for retirement (1MB)
- Read Working and saving for retirement: Action on occupational pensions (234KB)
- Find a copy of the Pensions Bill (12 May 2004) on the UK Parliament website
- For developments since 2004, see the National Pensions Debate
Background
1995 Act and Goode Report
The last major Pensions Act in Great Britain was that of 1995, which was in large part inspired by the Goode Report. Entitled Pension Law Reform – The Report of the Pension Law Review Committee – this was published in September 1993, and was the result of the establishment of an independent committee, which the Government asked to review the framework of law and regulation within which occupational pension schemes operated. It took into account the interests of: members, pensioners and employers.
1997-2000
The main provisions of the 1995 Act took effect in 1997, just before the General Election of that year. The immediate challenge for the incoming Government was pensioner poverty. It therefore introduced the Minimum Income Guarantee, the Pension Credit and above-inflation increases in the basic State Pension.
A further challenge was to help tomorrow’s pensioners provide for their retirement. At the time of the 1998 Green Paper A new contract for welfare: partnership in pensions, the incomes of better-off pensioners had been rising dramatically due to the maturing of the State Earnings-Related Pension Scheme (SERPS) and the growth of occupational pensions. But it was also clear that some people were not saving enough or working long enough, particularly in light of rising longevity.
So, to complement the Government’s reforms to tackle pensioner poverty, the 1998 Green Paper also set out reforms, implemented through the Welfare Reform and Pensions Act 1999 and Child Support, Pensions and Social Security Act 2000 such as replacing SERPS with the new State Second Pension to provide more generous pensions for those on low and moderate incomes, many carers and people with disabilities, and introducing stakeholder pensions to provide a secure, simple and flexible vehicle for saving in retirement.
Myners Report
In March 2001 following the publication of Sir Paul Myners' report 'Institutional Investment in the United Kingdom: a review' the Government announced proposals to replace the minimum funding requirement with a scheme specific approach (requiring primary legislation); and ruling out (at that stage) a discontinuance fund and insolvency insurance.
- Find out more about the Myners Report on the HM Treasury website.
Simplicity, security and choice: Working and saving for retirement
In Spring 2002 the then Secretary of State for Social Security asked Alan Pickering to look at how the administration of occupational pension schemes could be simplified. Ron Sandler was jointly commissioned by the Chancellor of the Exchequer and the Secretary of State to review retail savings in the same period. A Quinquennial review of the Occupational Pensions Regulatory Authority (Opra) and an NAO Value for Money study into how Opra worked took place during 2002. The outcomes of all these separate reviews showed that major themes for pension reform were emerging.
- Read the Pickering report (224KB) in our Publications section.
- Find out more about the Sandler review on the HM Treasury website.
- Read the Quinquennial review of Opra (May 2002) (64KB) in our Consultations section.
- In December 2002 the Government published a Green Paper entitled 'Simplicity, security and choice: Working and saving for retirement' [Cm 5677], and its proposals for simplification of the tax treatment of occupational and personal pensions.
- Read Simplicity,
security and choice: Working and saving for retirement (1MB) in
our Consultations section.
Working and saving for retirement: Action on occupational pensions
In response to the ensuing consultation, in June 2003 the Secretary of State for Work and Pensions published 'Working and saving for retirement: Action on occupational pensions' [Cm 5835], which focussed increasingly on the need for member protection to rank alongside the other themes. It presaged primary legislation across the areas consulted, including a Pension Protection Fund to compensate members of defined benefit and hybrid schemes whose employers become insolvent leaving the pensions scheme unable to meet its liabilities. The European Directive on the Activities and Supervision of Institutions for Occupational Retirement Provision was adopted in September 2003 for implementation by September 2005.
Simplicity, security and choice: Informed choices for working and saving
In February 2004 the Secretary of State for Work and Pensions carried broader policy on financial retirement planning forward in 'Simplicity, security and choice: Informed choices for working and saving' [Cm 6111].
- Read Simplicity, security and choice: Informed choices for working and saving in our Publications section.
These various strands of development have come together in this Pensions Bill.
- To find out more about the Pensions Bill (a Public Bill), or indeed other Bills before Parliament (including transcripts of debates and explanatory notes), visit the Parliament website; and follow the appropriate link to the required document.
- Find out more about the Government's pension reform plans.