Bill to strengthen existing schemes so master trusts meet higher operating criteria to keep pensioners savings from risk.
This includes protection for consumers on a range of issues such as creating a new approval regime for master trusts, and giving new powers to The Pensions Regulator.
In addition the Bill intends to introduce a cap to prevent early exit charges from creating a barrier for members of occupational pension schemes wanting to access their pension savings.
Minister for pensions, Richard Harrington, said: "We are helping to create a culture of saving across the country and have delivered much needed change to our pension system to make saving easier, fairer and safer for all.
"We want to make sure that people saving into master trusts enjoy the same protection as everyone else, which is why we are levelling-up that protection, to give these savers more confidence in their pension schemes."
Master trusts will be required to demonstrate that they meet five key criteria:
Persons involved in the scheme are fit and proper.
That the scheme is financially sustainable.
That the scheme funder meets certain requirements in order to provide assurance about their financial situation.
Systems and processes requirements, relating to the governance and administration of the scheme are sufficient.
That the scheme has an adequate continuity strategy.
According to the Pension and Lifetime Savings Association (PLSA), savers currently face two main risks:
It is too easy to set up a master trust and there is insufficient control over the quality and sustainability of schemes.
Savers may lose money if a master trust fails as their funds could potentially be used to pay for the wind-up of the scheme.
PLSA board member, Jamie Fiveash, said: "This is an important Bill that will provide the appropriate safeguards for the millions of people now saving for their retirement through master trusts.
"Like any piece of government legislation it will need detailed scrutiny to ensure it works as intended, but we expect the Bill to raise standards and be a driving force in making sure savers are in better value pensions."
