After 6 months of not saying anything at all, the Pension Minister, yesterday broke wind and knocked two of Steve Webb’s pipe-dreams on the head.
In the latter days of Webb’s reign as pension minister, he had retired to his bunker in Whitehall and produced a number of initiatives which had got as far as the statute books. Somewhere in pension regulation , there is the legislative capacity to allow pot to follow member, somewhere (well in the Pension Schemes Act) there is the primary legislation for collective DC schemes. Both ideas now look as productive as a Redcar steelworks.
The chance of seeing something done to minimise pot proliferation or create a more efficient means of delivering pensions without guarantees, is as problematic as British Steel (Nigel’s plans somewhat dashed). As they say in sport “it’s no longer in our hands”.
It’s not her fault that no-one wanted CDC or PFM!
I don’t blame Ros Altmann, she inherited a rag tag and bobtail of ideas from the previous Government and it was clear from an early stage that not all were going to survive. I made a couple of attempts to probe for support for CDC from the Minister and I got a very severe look from the Chief Economic Secretary when I broached the subject at a recent Prospect Fringe meeting.
As for Pot Follows Member, the idea is either 20 years after its time or 2 years before it. The time we should have done something to create an aggregated DC environment was when we introduced Stakeholder Pensions, I remember we debated the single pot idea in 1997 and everyone thought it a good idea except the providers, who argued for choice. We got proliferation to satisfy the IFA.
Now that the IFA is not interested in choice proliferation , we have TISA arguing for consolidation, this is not how we should conduct public affairs. Virtual aggregation is here- if you don’t believe me, download the MoneyHub app and aggregate your financial affairs using the Yodel platform.
Pension Dashboards trump pot follows member and the Financial Advice Market Review will see to that PLSA.
So the demise of CDC and pot follows member is “not news”. The other bit of “not news’ is the rebranding of the NAPF to the PLSA.
Here’s CEO Jo Seagers
The Pensions and Lifetime Savings Association’s will, by 2020, speak for “all of the (retirement) sector — from the biggest DB scheme to the smallest and newest auto-enrollment (Sic) employer; from every part of the employer and every corner of the U.K. That means we want to talk beyond pensions, to lifetime savings,. The association’s clear purpose is “to help everyone achieve a better income in retirement,”
This is good, the NAPF spoke for a pension elite and I said so.
My comments weren’t necessarily welcome – but clearly they were percipient!
For the PLSA to achieve this goal in the next five years, it is going to have to reach out to the worlds of payroll and accounting, to IFAs and to those technologists who are interested in new ways of delivering pension income.
The NAPF has also got to stop spending so much of other people’s money. We live in an age of austerity where many “hard-working” people are retiring or preparing to retire on small amounts of money.
These are the photos appearing on social media last night of their annual gala dinner. Perhaps the ostentation is a little conspicuous.