A full frontal retreat on charges

full frontal


As flagged by Jo Cumbo and the FT , Steve Webb has duly climbed put the tanks into reverse. The full frontal assault is now an embarrassing retreat with no certainty that April 2015 will provide anything at all.

“We have consistently encouraged firms to start getting ready for automatic-enrolment 12 months ahead of the time the new employer duties apply to them” said Steve in a written statement to the House

“Therefore, to give those employers at least 12 months notice of  the rules that will apply to them, I can confirm that any cap on charges will not be introduced before April 2015”.

I’d like to remind Steve Webb of the blogs I wrote and he read in 2012 and early 2013 requesting the Government introduced quality standards then. In our visits to the Pension Regulator and DWP in early 2013 I made the same request personally.

If the Government is to expect timely behaviour from employers, can’t the employers expect timely behaviour from the Government? And can we expect any action on governance when the Pensions Bill for 2014 will only focus on the management of the DB legacy and pot follows member?

And where does this leave us? On the face of it , members joining workplace pension schemes post April 2015 may get some extra protection but what of the 2m who have already joined, regular readers of this blog will remember my tirades at a soon to float department store for setting its AE scheme up on a commission basis, with AMDs and a charge-busting fee for the 30% of the workforce turned over each year – what of them?

What too of the Independent Governance Committees, already delayed and showing no sign of emergence (the ABI waiting on the DWP). If the rules surrounding “what makes for good” are still to written, what will the 30,000 schemes due to be used for staging between now and April 2015, do to make sure they comply?

This smacks of the darkest hours of RU64 in the days before the introduction of stakeholder.

Even this morning, one of my colleagues received another request for us to help them understand hidden charges. We don’t like the blind leading the blind and want to help but how is it that on January 24th 2014, the DWP are still getting to grips with how funds work.

This is no time for the self-validation that the pension minister indulged in yesterday. No one doubts auto-enrolment has worked in getting millions of non-savers saving but into what?

If the DWP are still asking people like me how charges work, then doubt has to be cast over the entire governance procedure.

So before we go any further on this “retreat from Moscow”, let’s ask if we can’t dig in and hold our position. The ABI agreed to apply proper DC governance to protect members from the worst excesses of DC malpractice, they agreed an audit of existing workplace schemes to root out rotten apples and they have separately made noises to take action to improve the lot of those at retirement and trying to aggregate little pots into big pots.

Let’s make sure that amidst all the celebrations, we don’t let these promises be shunted off into a post election siding. If we are to restore public confidence in pensions, we need action not more procrastination.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to A full frontal retreat on charges

  1. George Kirrin says:

    Intrigued by the picture of an army in retreat, Henry, and initially thought it was American Civil War, But I see it turns out to be WW1 Serbian army in retreat towards Albania. So there.

    yours aye, George (Kirrin, not Meade)

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