If I were Steve Webb..

holy frailIt was good to see so much interest in my blog about bankers . I hope this wasn’t just from “banker bashers” and that there is some interest in creating better pension structures.

One person who read it commented

DA does not sensibly stand for defined ambition whatever that means. Indeed the essence of it seems to be that it is Undefined. And perhaps Unambitious as well. But most of the ideas swirling around do seem to be rather suitably – Deferred Annuities, in one disguise or another and with investment return etc sharing.

Whilst we cannot admit to  looking back nostalgically at the world of with profit deferred annuities, perhaps we should look at how they could be made to work in a mass market compulsory” system

Another wrote to me

I don’t think auto enrolment should be derailed.  But I have woken up to the fact that (a) it is an excessive imposition on small employers, who are very different from big employers, and not just a lot smaller (b) as Steve Webb always says and I understand Andy Seed said last week, the fact that big employers have managed to get most of their staff not already in their scheme to join it is a different kettle of fish from asking the other 1.2 million small employers to auto enrol their staff into saving.

Why not get them to do more, manage their workers diets, or having health checks? (which again larger employers or those with high earning staff can cope with arranging).

These comments come together in my thinking because tomorrow I must pretend to be Steve Webb and speak to an NAPF group on what I’d do if I were him.

If I were Steve Webb  I would be proud of my achievement getting a unified state pension to the starting blocks and pleased that I had held a broad cross-party consensus on both the management of the DB run-off and the introduction of auto-enrolment.

But I would be fearful of 2015 and beyond, not just for my job but for the legacy that I might leave behind.

Cynics might argue that Webb is busy laying land-mines (pot follows member etc) for his successor. I did not say that – further criticism would see me on Tower Hill with my neck on the block, so no more on thst…*waves to Scottish Lifeco execs at traitor’s gate*

The big worry for me (as Steve Webb) would be that for all the fuss and bother I am putting the 1.2m employers who are yet to stage AE to-  they’ll remember be and shout

IT WASN’T WORTH IT!

The hassle of AE can never be justified on any grounds other than the improvement in the pension outcomes for the 10.5m Britains yet to be enrolled.

Which means that we need to spend more time on improving the workplace pensions than we currently are today. We need more DA and less rubbish DC , we need higher contributions and more employer engagement. We want employers and their staff to be proud of pensions.

Yesterday, I spent all day working on a machine that will allow SMEs and micros to make good choices about their workplace pensions at a maximum cost of £500.

Our little group were constantly discouraged by the difficulties of assessing workers, choosing contribution structure, managing on boarding and setting up compliance systems to ensure smooth running of auto-enrolment, none of which has much to do with improving pension outcomes.

It was as much as I could  do to convince them that auto-enrolment was a pensions thing.

This “wood for trees” mentality is only to easy to adopt. My inbox is full of offers from advisers keen to offer compliance services and empty with ideas about better pensions.

However, being Steve Webb, I will rise above such petty considerations and in my visionary state, proclaim that all that is needed for auto-enrolment to be a success, are proper workplace pensions to auto-enrol people into.

Well I did yesterday, though not with quite Webb’s pizzazz.

And my team looked at me with a world weary look and said

Yes Minister.

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to If I were Steve Webb..

  1. George Morley says:

    So what is your take on the subject of frozen pensions ? You know, the ex-pats who retire to most of the Commonwealth countries and from the day that they leave or become eligible for the sate pension they receive no increases ever due to a government regulation and nothing else. Meanwhile the pensioners in the UK are OK of course but so are those in the EU and also the USA and the Philippines and the US Virgin Islands and others. All of these pensioners wherever they are in the world have paid their mandatory contributions along with their employers and come the retirement day – decisions, especially if your family has previously emigrated to say Canada. You can’t join them or if you do then you are faced with a decreasing pension effectively.
    There is no logic and even Steve Webb when in opposition raised an EDM and described it as discriminative and irrational but now he has the opportunity to do something about it he does nothing but make excuses.

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