Aon Hewitt have one us a favour by uncovering a flaw in the DWP auto-enrolment regulations that works counter to the Government’s “big“ intention to make sure everyone has access to a a proper pension.
If you are fortunate enough to be a member of the “mallowstreet” pension community you can read about it there. I hope that my friends at Aon will , after I have credited them for perspicacity , will forgive me for paraphrasing their argument.
Because the DWP want to make sure that no employer finds a way round auto-enroling the people the DWP want to be in a decent pension, they have made life so complicated for caring employers that those employers will probably stop providing pensions to all their staff and concentrate on complying with regulations.
In other words, the good employers are being forced to dumb down as much as the bad employers are being forced to raise their game and we will be left with a world where employers can no longer distinguish themselves by being better at pensions than others.
You might think that it would have been better if Goverment had “left alone” or just got on with the job of distributing general taxes back to those in older years via the state pensions and I bet there are a lot of people in the DWP and their local police force the Pension Regulator who think just that.
We have however embarked on an ambitious plan to make sure that all employers however big or however small, give proper pensions for their staff and while we have stopped short of obliging people to pay into them, we have made it pretty hard for them not to. The decision to do this was taken by a Labour Government and being implemented by a Liberal/Conservative coalition. The reforms have the general consent of the Trade Unions and while many employer forums are ruminating against the extra red-tape, there is a general feeling that the new day for pensions is about to dawn.
Why then is there so little excitement among those in the pension industry? It’s easy to moan, as Aon Hewitt are doing, at the problems but the fact is that the new regime is good news for consultancies like theirs who will be responsible for ensuring the regulatory compliance and its good news for the insurers and fund managers who will benefit from the inflows of savings that the reforms will create.
My point is that the pensions industry has a once off opportunity to get it right, this is our London Olympics and while we need to have our heads down making sure the infrastructure to make this work is in place, we should take a little time out to celebrate the fact that this “new day” is but a year away (M &S will be auto-enroling this time next year).
So perhaps I can tip my hat to Julie Parker-Welch of the said retailer with whom I had a meeting last Friday. People like Julie are the blue-bloods of our industry, people who make things happen without making a fuss and make the world a little better. Which is not to have a go at Aon Hewitt or any other consultants (I am one).
But to have done instead of not doing
This is not vanity
To have, with decency, knocked
That a Blunt should open
To have gathered from the air a live tradition
or from a fine old eye the unconquered flame
this is not vanity.
Here error is all in the not done,
all in the diffidence that faltered . . .
- There are better ways to de-risk than ETVs (henrytapper.com)
- What to do with pension trustees (henrytapper.com)
- The importance of saving into a pension early (justsave.co.uk)
- Scheme Pensions aren’t the magic bullet -yet (henrytapper.com)
- The case for doing nothing (henrytapper.com)
- Should employers be bothered about their pensioners? (henrytapper.com)
- The point of work’s to dream of doing nothing (henrytapper.com)
- DC Trustees still valued but they need to raise their game (via Henrytapper’s Blog) (henrytapper.com)
- Buy now while IFAs last? (henrytapper.com)
- Accounts and accountability-who pays for NESTCorp? (henrytapper.com)
- New govt pension scheme could be risky for savers (confused.com)
- DC investors -are we panicking? (henrytapper.com)
- Money makeover: Almost 30 and no pension (confused.com)
- David Prosser: The ethics of pension fund investments (independent.co.uk)