The Single-tier State Pension: Part 1 of the draft Pensions Bill - Work and Pensions Committee Contents


Conclusion

169. Effective scrutiny by this Committee of the major reform of State Pensions set out in the draft Pensions Bill has been hampered; first by the extremely tight timetable the Government imposed upon us and then by the Government's last-minute decision to change the implementation date, from April 2017 to April 2016. This was announced after we had concluded the evidence-taking for the inquiry and only a week before the Government had asked us to produce our findings. It is not acceptable for governments to adopt such a cavalier attitude to the scrutiny role of select committees. However, our recommendations remain valid and we believe they will assist effective parliamentary scrutiny of the final legislative proposals when the Bill is introduced in May 2013.

170. We welcome the improvements in retirement income that the Single-tier Pension will bring. It will mean more State Pension for many people, particularly low-earners, in the short to medium term. It will also be a much simpler system for people to understand and will give them greater certainty about the value of saving into a private pension scheme. In this way it will complement automatic enrolment into workplace pensions in boosting the amount that most people will have to live on in retirement.

171. It is clear to us that the key to the success of this reform is the way in which it is communicated to the public. There are already a number of misconceptions about what the STP will mean for individuals, including who stands to gain, who might lose, and how individual entitlement will be calculated. People closest to retirement understandably have the most immediate concerns.

172. We appreciate that it is not possible for the Government to spend money on a communications strategy for a policy that has not yet been approved by Parliament. However, we believe that it is vital that DWP is in a position to indicate what its overall communications approach will be, how the internet will be used, and what individualised information it plans to make available, by the time the Bill is before Parliament. This is particularly important now that the implementation date has been brought forward by a year.

173. The evidence we took from the pensions industry and employers initially satisfied us that DWP had been effective in liaising with these stakeholders on the reform proposals and that they were broadly satisfied with the proposed arrangements for ending contracting-out. The Government's decision to bring forward the implementation date at such a late stage means that it will need to engage urgently with representatives of employers and pension schemes to ensure that their concerns about the accelerated timetable for reform are taken fully into account in the final legislation and draft Regulations.

174. We have a number of concerns about the potential impact of some aspects of the proposals and the transition process on particular groups of individuals. The change in the implementation date has created further uncertainty about which groups will be affected by the changes and in what ways. It will only be possible for Parliament to make a proper assessment of the effects of the proposals if the Government makes accurate and up to date information available. Most importantly, DWP needs to publish a revised Impact Assessment, which takes full account of the implications of the earlier implementation date, when the Bill is introduced. We have also identified some specific areas where DWP needs to carry out further analysis and costings, to enable Parliament to judge whether remedial action or modification of the proposals is required.





 
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