tweeps- just dive in! It’s all here!
I’m not sure a blog has ever been written around one person’s tweets of an event, but Jo Cumbo’s online reporting of the Public Accounts Committee’s session on auto-enrolment is so excellent that I thought to hand over to her twitter feed!
It was an important session, following the recent report of the National Audit. There were no questions (it would seem) about pressing the panic button , as widely reported in the Telegraph and more recently in Corporate Adviser. The issues dealt with were proper issues, those discussed in this blog and those of national interest. Top of the list was the accountability of NEST and the need for it to be clear on how it clears its debt.
There has to be an urgent and cogent discussion on NEST pricing if we are not to have pricing distortions that could lead to major market disruption next year.
Over to Jo…
Jo’s summary statement
Key themes from the evidence session: Officials came under pressure to explain when taxpayer loan to Nest loan would be repaid.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Who gave evidence (from the public sector)
Witnesses: Robert Devereux, Permanent Secretary, and Charlotte Clark, Auto-Enrolement Senior Responsible Officer, DWP >
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Witneses cont: Charles Counsell, Executive Director for Automatic Enrolment, The Pensions Regulator, and Helen Dean, CEO, Nest.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Questions on “Workie”
Devereaux says since Workie campaign was launched hits to the Pension Regulator's website have quadrupled.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Deveraux: "We consciously went for a 'disruptive' campaign to get people who wouldn't think about it, to think about it."
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Question now on Workie.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Charles Counsell on choice and workplace pension investment
Counsell says that tPR would be open to prompting employers to think whether their chosen pension scheme is still most suitable.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Counsell says “we need to keep an eye on” where providers are investing pension savers' money.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Helen Dean on NEST investment
Dean questioned on where Nest investing its £623m. Dean says investments are in target date funds aligned to different years people retire.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Questions on small pots following members
Devereaux pressed to say when government will set out the scope of the 2017 automatic review. He replies: "When we get close to it".
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Committee suggests that automatic enrolment isn't a market – because of asymmetry in information between provider and customer.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Committee presses on whether small pot solution kicked into long grass but Deveraux says a it's "definitely" still on the agenda.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Clark says "waiting at least another year to see what the market looks like is probably the right approach"
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Question on small pots – the elephant in the room – now directed at witnesses.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Charlotte Clark on costs and charges in “Workie”
Clark says "we want to make sure we are consistent with Europe" on transaction costs.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Clark 'we are on a bit of a journey with transaction costs'
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Clark tested on why charge cap is limited to member borne charges and transaction costs, for example, not included.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Clark says internationally 0.75% is a 'pretty good charge'. Committee member responds:
"Depending on what’s in it". Clark: “Absolutely”— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Charlotte Clark of DWP charges have come down since the beginning of AE in 2012.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Questions on savings levels
Devereux replies "2017 would be a good time to check exactly what has happened in the world of savings."
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Devereux of the DWP asked when we will know if people are saving enough.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Charles Counsell on supporting SMEs
Counsell says tPR has completely changed its web offering for SMEs after poor feedback.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Counsell says providers have "come on" in the last 6 or 9 months in terms of wider offering of online services for automatic enrolment.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Counsell pressed on whether tPR has enough resources to do compliance checks: "We think we have got the resources we need and it builds up."
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Counsell is working on RTI data from HMRC in the summer. Doesn't have now.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Counsell says tPR will look at patterns in data. "We'll look at employers with high opt out rates. We would look into that."
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Counsell asked if tPR adequately resourced: "Yes we think so".
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Charles Counsell, Executive Director for Automatic Enrolment, The Pensions Regulator answering questions.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Questions on the capacity of NEST to repay its public debt
Devereux says Govt treating Nest as 'going concern'.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Devereux: "I am not entirely sure when we'll get the money back. Is it still a loan? I think it is."
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Devereux of the DWP says no-one is exactly sure when Nest will repay its state loan.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Helen Dean pressed by Committee to update on how Nest is performing against targets.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Dean says its "too early" to give a precise date when Nest will achieve £20bn target for funds under management.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Dean of Nest says there’s a lot of uncertainty around when they would be able to reach £20bn target.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Dean says Nest would need £20bn of funds under managements to meet its costs. It has £600m AUM now.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Helen Dean, NEST chief exec, says NEST has £623m of AUM.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Questions on opt outs and cost to Treasury of low opt-out rates
Committee members ask if Govt could consider keeping contribution rates low for lower earners, so they not prompted to opt out.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Committee continue to press DWP on its forecast for 28% opt outs. Why isn't it doing more to ensure this estimate not reached.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Committee suggests that for 700,000 people it "might not have been worth it".
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Committee challenging Deveraux on DWP assumption that opt outs will rise to 28% once AE rolls out to SMEs. "Are we too casual to let me go"
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Committee notes that AE costing HMT more than expected in tax relief. Devereux says "Treasury wants people saving more than anything else".
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Committee asks Devereux whether the DWP was not too cautious in estimating opt-outs which have been far lower than anticipated.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Questions about the roll-out of staging (the timetable)
Devereux says rolling out automatic enrolment is 'not rocket science' if it's done in manageable chunks.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Devereux: “We have very changed rolled out once or twice to reflect things we are learning.”
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
Robert Devereux, Permanent Secretary, DWP says he's "pleased" with rollout of AE so far.
— Josephine Cumbo (@JosephineCumbo) November 23, 2015
(TBC) I will publish the private sector session in a separate blog.
Thanks to Jo for excellent reporting, if I have misrepresented her reportage, I am sure she will be in touch!
Any comments on whether this format for a blog is helpful – most welcome!