Way back in 2002, having been encouraged by Ministers "to think radically", Alan Pickering proposed in his report A simpler way to better pensions "a new Pensions Act which should repeal or consolidate all existing Department for Work and Pensions (DWP) private pensions legislation". Sadly, any lingering hope that this year's Pensions Bill might realise his goal (dream?) was derailed by the gathering storm which necessitated the Pension Protection Fund and later still the Financial Assistance Scheme. Nevertheless, amid all the alligators the Government has apparently not completely forgotten the idea of draining the swamp. In the House of Lords Grand Committee ("the Committee") on 15 July, the Minister, Baroness Hollis, expressed a hope that we would get a consolidation Act some time within the next decade.

Although as we discuss later in this article, the Bill is still subject to change, it fails almost completely to address surely the greatest prize of true simplification, namely abolition of contracting-out. Sadly, the Bill will not even include some specific targets the Government has previously set, such as actuarial conversion of GMPs, abolition of safeguarded rights, or a revised reference scheme test. All we shall get on this subject is the present Clause 272, enabling fewer restrictions on commutation of GMPs and protected rights pensions, and removing restrictions on the age at which a protected rights pension may be received.

Our previous report concerned the Government's announced intention about LPI, and the main changes made to the Pensions Bill in the House of Commons at the Report stage. This article reports on what has happened since.

The Bill is now at the Committee Stage in the House of Lords. In the five days it spent before Parliament rose for the summer recess, the Committee got as far as Clause 125; which is to say it completed its review of Part 1 (The Pensions Regulator) and began to look at Part 2 (The Board of the Pension Protection Fund [PPF]). As the Bill at the moment (HL Bill 73) contains 310 Clauses and 13 Schedules in all, clearly there is still much work to be done when Parliament resumes on 7 September.

Although Lady Hollis asserted to the Committee that "85 to 90 per cent of this Bill has been worked on for three years or even longer", the Government is continuing to table amendments. From the Opposition benches, Lord Higgins expressed concern about this, saying that increasingly, the House of Lords is getting substantial drafting changes after Bills are supposed to have been scrutinised in the Commons. While the Lords is supposed to be a revising Chamber, it is becoming almost the opposite in having to deal with Bills in toto, he complained. The Minister defended the Government, saying it could have deferred the Bill for another year to get a fully polished result, but people were seeing their pensions put at risk so urgent action was needed*. Also, unusually for the DWP (she said), extensive consultation had seemed right. Finally, things had been "coming out of the woodwork", such as the issue of 'pensions liberation', which she did not think "12 months ago any of us would have recognised the need to address" (notwithstanding the fact that Opra warned against just this as long ago as 3 May 2002).

* The Government is currently minded to make eligible for the financial assistance scheme only members of schemes which started to wind up from 6 April 1997, when the 1995 Act came into force; but it might be willing to stretch a little, to cover schemes which entered wind-up shortly before that date.

The PPF is likely to begin operating on 6 April 2005, only issuing a transfer notice (ie taking over the assets and liabilities) where a scheme goes into wind up after that date, and where in addition the employer is insolvent and the scheme is funded to a level below the PPF benefits (= for formerly active and deferred members, 90% of entitlement under scheme rules; for existing pensioners, 100%; subject to a cap to be specified by order under Sch 7 para 25 (7) - the Government's expressed intention is to set it initially at £25,000). The Minister described the PPF as "a compensation scheme, but it obviously has features of both pensions and insurance in it."

Leaving aside purely technical amendments, the ten main subjects of Government amendments to the Bill introduced so far in the Lords are:

1. 'pension liberation' (four new Clauses inserted after Clause 18);
2. insolvency practitioners (eg Clauses 114 - 117, plus two new clauses);
3. pensions on divorce and the PPF ("extremely complex, wet towel stuff", the Minister admitted, but to which she clearly attached much importance; eg a new enabling Clause at the end of Part 2 and new section 25E inserted in the Matrimonial Causes Act 1973 via Sch 12 );
4. the distinction between "scheme rules" (which may also involve overriding legislation) and the rules of the particular scheme; eg when a scheme enters the PPF, the former and not the latter must apply;
5. periods of short service in the PPF, transfer rights and deferred pensions (eg Clause 130 and Sch 7 new paras 19A and 30A);
6. survivors' benefits in the PPF (eg Sch 7 para 22);
7. technical amendments to the PPF for clarification (eg on 'withdrawal notices' issued by the Board where it must refuse to assume responsibility for a scheme or the Board ceases to be involved: Clauses 138 - 141, plus one new Clause);
8. member-nominated trustees and pensioner representatives (Clauses 230 - 231);
9. the legislation on winding-up priority orders (re 10 June 2003) (eg substantial new Clause in Part 5, inserted after Clause 258, plus extensive amendments to Clause 259); and
10. LPI increases: removal of the obligation to provide LPI from money purchase pensions vesting after commencement day (Clauses 266 - 268).