This is what the Pension Regulator wants to do in the next twelve month three years.
- Successfully implement automatic enrolment
- Protect consumers from poorly governed master trusts
- Effectively regulate defined benefit schemes
- Effectively regulate public service pension schemes
- Maintain confidence in pensions
- Improve the quality of scheme governance
- Extend our regulatory influence
- Increase member engagement with pensions
- Develop our people
- Be an effective and efficient regulator
I’ve put 1,2,5,6 and 8 together because they are mutually dependent. You cannot realise any one of these without realising the others!
Perhaps I’ll cavil at 5. I would like the ambition to be to improve confidence in pensions as I suspect maintaining confidence at current levels isn’t good enough. But otherwise I’m totally in agreement with the masterplan.
This is why the Masterplan is radical
- Many people in occupational pension management think that the primary purpose of the Pensions Regulator is to regulate defined benefit schemes (including public service schemes). While this is clearly important, it is no longer top of the list
- Many people in occupational pension management think that auto-enrolment is almost over. In fact for 90% of employers it has yet to begin.
- Many people think that the Pensions Regulator is about enforcement, points 5,6 and 8 are about engagement, education and empowerment of ordinary people to choose undertstand and use occupational pensions better.
To quote the Pensions Minister, pensions are about people and this masterplan is focussed on the outcomes of these pensions as they effect ordinary people. This is a radically different approach to the “Risk-Based Regulation” of the past. The cheese has been moved and instead of pensions being managed as a threat, they are being promoted as a way for people to feel confident about their financial futures.
This is absolutely as it should be. It is a radical return to the roots of pension management and I give this approach my unequivocal support.
This is why the Masterplan will work
Ultimately, a mission for pensions based de-risking liabilities will achieve nothing for pension provision. It may free up resources in business and the wider economy and create more jobs, better productivity and some prosperity in the short-term, but it will not solve this nation’s retirement problems.
Our retirement problems all stem from our not putting enough by for the future. Without an earnings related state pension, private pensions are the only meaningful way for people to plan for retirement (pace Michael Johnson- the LISA and the workplace ISA will help but they do not focus the mind on retirement).
We don’t save for our long-term future for a whole load of reasons but they are summed up in the masterplan. We don’t have the confidence in our pensions because we don’t believe they are properly governed (managed) , because we don’t have the means to properly engage with them and because more than 5m of us have still no access to a workplace pension (via auto-enrolment).
The masterplan will work because the person in charge of the Pensions Regulator properly understands this and has refocussed the Pensions Regulator on what really matters. Without Lesley Titcombe this plan would have little chance, with her, I am confident it will work. Of course Lesley needs lieutenants and in Charles Counsell and Andrew Warwick-Thompson she has strong deputies, but the Pensions Regulator is Lesley Titcombe and she is good.
This is why this matters
Pensions are long-term financial plans which need vision, consistent policy and firm management. Other parts of Government have treated and will continue to kick pensions about like a football.
The Pensions Regulator is not and should not be a political organisation, it is the ballast that keeps the ship upright when harsh winds blow the ship about.
Without the stability we get from the Pensions Regulator, the public would lose confidence in pensions, auto-enrolment would become destitute, people would not engage with retirement saving and some of our master trusts would go bust.
This masterplan is very important, very good and it deserves more publicity than I expect it gets. On this blog it will get as much publicity as your attention merits!