The diverse agenda of the DWP Select Committee might be considered madness. I am not going to write that their is method in this madness as it’s clear to me that we cannot properly consider freedoms, without looking at CDC for those with pots but no pensions.
I also want to get on the right side of this Committee as I am due to give oral evidence to them in a few days time. I have only once been done a genuine favour by a Minister and that was by Frank Field who gave me a lift back to the Oxford Park and Ride after a lecture in town. Frank Field is regularly thought mad twenty years have passed since that lecture and I still see a kind and generous soul who understands the financial behaviour of ordinary people better than most.
So to have the chance to answer questions about what Al and I saw in Port Talbot and the interactions we’ve had on the Facebook pages will be an honour and a pleasure.
We’ve called a special session looking at the advice and information being given to members of the British Steel Pension Scheme about their #pensions and transfer options https://t.co/S8otwM8qD0
— Work & Pensions Ctte (@CommonsWorkPen) November 30, 2017
The special session is informing the inquiry into the operation of pension freedoms.
The Committee is due to produce the first report of this inquiry in the next weeks: this evidence session is intended to inform a second report that will propose regulatory and other measures to prevent similar situations.
It is not for me to propose those measures but I notice that on the list of inquiries currently being carried out by Field and his team is one on collective defined contribution schemes.
Chive – a good interim solution
I hope that the link between the current madness in Port Talbot and other steel towns needs not be repeated.
Al Rush has embared on Chive, yesterday he was doing work with steelworkers who are flocking to him and his team of unpaid IFAs, unravelling the misconceptions of BSPS members. I understand that the BBC will be reporting on this on the 6 and 10 o’clock news.
If you are a member and you are reading this, then you can book yourself a session in one of the many locations Chive is operating in – using this link.
Some IFAs have been rather less than generous to Al and this charming note – captured by Dave Trenner – explains why Chive – as applied to the emergency at BSPS, is not a measure to “prevent similar situations”.
But Chive, relying as it does on a self-moderating group of highly qualified Pension Transfer Specialists, is a resource that other employers and schemes will be able to call upon when other groups come to their “Time to Choose”.
Chive will need to operate on a commercial basis in future but for now , I’m sure all but the hardest hearted will agree with these sentiments.
From @RAF_IFA and @henryhtapper going to Port Talbot to meet BSPS members to @JosephineCumbo getting stuck in for the FT and local IFAs now volunteering their time, this saga has exposed the good that still exists in financial services https://t.co/7T0XQxzmvJ
— Tom Selby (@thomasselby) December 4, 2017
More radical long-term solutions needed.
To my mind , there is no obvious solution arising from the FCA’s retirement outcomes review. The retail sector has failed to come up with a mass market solution to give ordinary people , faced with pension freedom , a guided pathway.
Although it will take two years to create the regulatory framework, CDC could still deliver, by the beginning of the next decade, a default solution for those -like Al and others are speaking with – who are looking for a wage in later life without the backing of a sponsor.
In the short-term, the demand for such a service will be as much from those with money emerging from DB as from money accumulated in DC. The wall of pension wealth moving inexorably towards later-life , demands the Select Committee’s attention and I’m very glad it is getting it.
Method in its madness.
So the seeming madness of running concurrently an enquiry into pension freedoms and an enquiry into CDC makes sense to me. One is the solution to the other, CDC will be born out of frustration with pension freedoms but CDC is also the expression of pension freedoms for those who want a wage for life but do not want to be tied to the tyranny of annuity rates.
Which is why you will see a lot more articles like that from Con Keating this morning – on this blog. And why I am confident that the remedial work Al is doing in the steel towns needs the publicity it will get from the DWP Select Committee’s ongoing scrutiny.
I am not supposing that achieving a short-term fix to the problems created by the decline of DB will be easy, CDC is no silver bullet; nor am I suggesting that the proper organisation of advisory report is a long term fix for retirement outcomes, it is only a sticking plaster. But I do think that the DWP select committee hold the keys and that with the stewardship of Frank Field, will be able to take matters forward.
That is my hope. It is probably pension’s best hope – right now.
