New pension rules and a higher minimum age for taking benefits

A new set of pension legislation has received Royal Assent to become an Act of Parliament. The Pensions Act 2020 is designed to bolster support for savers and further the government’s green agenda, by supporting progress towards a net zero economy.

Part of the Act designed to strengthen consumer protection extends the powers of the Pensions Regulation. The Act introduces a new power allowing the Pensions Regulator to issue civil penalties of up to £1 million, along with three new criminal offences.

Bosses who run pension schemes into the ground or steal from their company pension scheme face a maximum prison sentence of seven years. This penalty is designed to deter employers from making reckless decisions with their defined benefit pension schemes, as well as strengthening the power s of the regulator to take efficient and timely action to protect pension savings.

Another part of the Act formally introduces pensions dashboards, which will create a single platform for all pension savings. Once introduced, the pensions dashboard will allow savers to see, in one location, how much they can expect to receive in retirement income, as well as learning how
to improve their retirement prospects.

On the build back better agenda, the Act introduces climate risk reporting for pension schemes, as well as changes to the requirements for pension scheme funding to improve financial sustainability. There is also the creation of a new style of pension scheme within the Act; known as the Collective Defined Contributions (CDCs) scheme.

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