The Play Pen sat down for the 26th time at the Counting House on Monday 9th Jan 2012-the first working Monday of the month.
It concluded that their was life in auto-enrolment though enthusiasm for the project and for NEST had severely diminished since previous discussions.
We’d last discussed the value of Auto Enrolment and the money spent on it and NEST in August 2010 and previously late 2009. There has been a clear shift in sentiment towards the view that this Regulation imposed on us rather than an opportunity we should grasp with both hands.
The specific issue under discussion was the impact of the delays announced late last year by the DWP in the timetable for the implementation of auto-enrolment for small schemes. Mark Scantlebury , owner of Quietroom and Simon Kew of Jackal Advisory, both of whom fall into that category of firm, spoke eloquently on the subject. For Mark, the immediate priority was now a bonus scheme. For both, the feeling was that the signal sent out was that small firms had more important considerations than pensions. Consultants present, confirmed that the enthusiasm among small firms for improving coverage of their pension arrangements had diminished from dim to indiscernable.
David Taylor put our despondency into perspective by pointing to the timeframes Hutton had established to measure the success of these regulations. If we are to think in terms of decades rather than years, he argued, then it was the cultural impact of auto-enrolment rather than the short-term issues with implementation that mattered most. James Smith argued strongly that the concept of auto-enrolment was sufficiently simple to eventually catch on and that looked at in macro terms, it was undoubtedly a “good thing”.
A parallel discussion was introduced by Janet Hennessey who eloquently described the problems large firms were experiencing with he complexity of the auto-enrolment legislation. She mapped out a picture of large schemes having to enrol employees who were ill equipped to manage their pensions and unlikely to greatly benefit from the large amounts spent upon them. Her complaints wer to a degree echoed by Clair Caroll.
Simon Little and David Parks added a third perspective to the discussion, arguing that we should be looking at the “at retirement ” picture in terms of people’s holistic wealth. Both were gloomy about the level of financial capability among those the Government were targeting through auto-enrolment. There was a degree of endorsement of Janet’s plea for more certain (defined) outcomes from pension saving and concern that NEST had done nothing to improve the process of annuitisation. There were calls for NEST to provide its own annuities.
In conclusion a vote was taken. The motion that “If I were Steve Webb I’d scrap auto-enrolment and NEST” was defeated by 4 votes to 5.
Note to those not in the Play Pen– the Pension Play Pen is a Linkedin Group; it is open to anyone interested in pensions whether in the UK or abroad. Its aim is to bring people together online and through terrestial events such as lunches, conferences and outings. If you are on linkedin , you should look us up and invite yourself to join.