Contrary to all the rumours – Guy Opperman and Amber Rudd are still in position and Britain has some unexpected continuity in its pension policy making. I was asked last week to comment to a group of civil servants on whether I was happy with the leadership we were getting and I replied I was. I am not sure that was the answer that the group were expecting but it is genuine.
Opperman and Rudd can at least claim they have not done too much wrong. This is a rather weak statement , but Opperman has at least avoided the banana-skins.
Delighted to continue as Minister for Pensions + #FinancialInclusion. We have achieved so much
– #AutoEnrollment at 8% for 10 million +📈
– championing #PensionsDashboard💻
– introducing #ESG to tackle the #ClimateEmergency🍃
More to do, now let’s keep moving forward ➡
— Guy Opperman (@GuyOpperman) July 26, 2019
A qualified welcome
I say this in a qualified way. Guy Opperman cannot be thought of as creative, the policies he has adopted have been winners (auto-enrolment) and he has stayed clear of taking on challenges (net pay anomaly, Pensions credit). He has supported the dashboard , but getting on for 9 months after its relaunch we have yet to see tangible evidence of progress.
The much trumpeted amalgamation of TPAS and MAS into MAPS (formerly SFGB) has run aground with the unexplained departure of its CEO, still tweeting about local issues (other than pensions). No new CEO has been announced and its chair Hector Saintz seems to be ruling that particular roost. It’s hard to get excited by an organisation in “listening mode” with such internal disruption.
When it comes to giving the public better pensions information, we are told that 3% of state pension forecasts delivered digitally are materially wrong. The problem seems to relate to years of underpayment of NI for those in contracted out occupational pensions. Most of these people are close enough to retirement for this to be a material issue.
A Treasury branch line?
It’s hard not to feel that the price for continuity has been paid by a dilution of the DWP’s ministerial influence. Opperman took his post as an “under-secretary” of State, a downgraded role. Now we hear Amber Rudd’s role includes being minister for equality. As if sorting out work and pensions wasn’t enough.
Because work and pensions isn’t a complex and varied brief on its own 🤦🏻♀️ https://t.co/gNXDFgzVA2
— Maria Espadinha (@Maria_Espadinha) July 24, 2019
We heard last week from Amber Rudd , relying to Nigel Mills on issues arising from Standard Life’s £31m fine for stitching up savers with small DC pots
It seems that the DWP have cottoned on to the problem that the Treasury’s FCA has been failing to solve for the past fiver years . The FAMR has not found ways to help those with small DC pots to get advice – what makes us think the DWP will be any different?
Last week, Lloyds Banking Group’s main union Accord, accused LBG of selling advice to its customers but denying it to its own staff. Demands on employers to do more to solve the consumer issues arising from Pension Freedoms are growing. Has the DWP got a credible policy (beyond “encouraging Mid-Life MOT’s”, to tackle the growing problem of people retiring without access to substantive help with their pension options?
The DWP must be collective and creative
The fact is that the scope of DWP’s regulator – TPR – is limited to fining employers over auto-enrolment breaches and the trustees of occupational pensions for breaches of institutional rules. There is simply no D2C element in DWP’s control. At best the DWP is an advisor to the Treasury, at worst – it is a branch-line where unwanted engines and rolling stock are sent to work out their days.
If Rudd and Opperman are to prove themselves in the pensions space, they have got to prove themselves as more than the Treasury’s poodles and the champions of legacy pension policies.
That means coming up with meaningful mass market solutions. By meaningful, I mean CDC and not a sexy but frivolous extension to Pensions Wise that is branded “mid-life MOT”.
Time to return to the dashboard?
The only opportunities that DWP have to make a real contribution to the UX of pensions are in the provision of mass market spending plans (CDC) and the means to see and manage multiple pension pots and rights on a digital dashboard.
The problems that beset the pensions dashboard are well known. The Government wants to have a 21st century product but are frightened of the consequences of adopting open pensions. They are – they say – laying the foundations of a strong and stable dashboard by appointing their own to manage the project within MAPS.
Last week the dashboard issued requests from the wider industry to person the pension dashboard steering group. Why this has taken so long I don’t know, what we can be pretty sure of is that it will be a consensual group that will deliver more strong governance and lots of prescription around what the dashboard cannot do.
This will have the impact of centralising the dashboard around the ABI’s agenda , ensuring that the dashboard serves as a consolidator for what we have – rather than as a means to what we could have.
There are plenty of people outside the usual suspects who could put themselves forward to create a dashboard that really worked, but whether they have the appetite to risk once again being ignored in favour of a conservative consensus. Without wider Governmental support the dashboard project remains for me – a pipe dream. It has much more the look of Universal Credit than Auto-enrolment.
So why am I happy?
I am happy in a resigned way. Losing Amber Rudd and Guy Opperman would have lost us our Pension Bill and with it, the chance of developing collective DC pensions which I see as the way out of the problems pension freedoms are bringing us.
It would also mean starting again with the Pensions Dashboard which undoubtedly would be subject to yet another review from an incoming ministerial team.
As for the third plank of the Pensions Bill, legislation to help DB pensions consolidate, I am not so concerned. If it has to be sacrificed in return for legislation on CDC and the Dashboard, so be it.
The Pensions Bill remains the one tangible outcome of Guy Opperman’s tenure so far. If you take the time to go through the claims in the DWP’s video, it is hard to see beyond the Dashboard and CDC as areas where Government can make a genuine difference
Other matters , such as the requirement for Trustees to make statements about their policy on ESG are little more than inclusion of pensions in a societal shift. Meaningful work is being done in the DWP regarding pension disclosures , but I sense these will need the FCA’s adoption to move the dial on how we see “Value for Money”
The dashboard and CDC are the big-ticket items and without Opperman and Rudd at the helm, both would have been subject to further delays.