The Minister on his high horse
How far we’ve come from ministers reading out statements at pension conferences with no questions flanked at entry and exit by flunkies. Yesterday we had an open- shirted Pensions Minister delivering , seemingly without notes and within the intimacy of a Zoom call.
To a large degree, this is down to the social confidence of Guy Opperman, a man who has been living life to the full. As the Minister recalled the crashing fall that ended his career as a national hunt jockey, I was thinking of the events of the summer, of the losses he and his wife Flora suffered and of the determination of the man to get off the floor and come back fighting.
As the PLSA’s Nigel Peaple pointed out, Opperman is now pushing Steve Webb in post longevity and if he gets his time to the end of this parliamentary term, he may get not one but two pension acts to his name. Certainly , his talk of a second pensions bill in 2021 grabbed the headlines when he spoke to the PLSA conference yesterday (March 14th).
The Bill of today -safer, better, greener
Data
The Minister’s emphasis was on the pension dashboard and on the delivery of data to ordinary people in digital format. He pointedly mentioned parallels to open banking, focused on putting pensions on the devices we use everyday and stayed clear of questions about what the dashboard would allow people to do.
But he gave us a sideways view of what he hopes the dashboard can display by calling the new simpler statements, the paper version of the dashboard. If this is the case then we await with interest the consultation response due any moment , on what will go on these statements. What goes on the statements – by implication – is what should be going on the dashboard.
Small pot problems
Opperman quoted NOW pensions telling statistics that small pots are likely to rise in number from 8 to 27m over the next 15 years. The estimable Mr Boulding (who appeared later in the day) has stirred up the Minister’s interest in international comparators (Australia) and I wouldn’t be at all surprised to see some legislation on the way in the Pension Schemes Bill II, when that appears.
Big scheme solutions
It was no surprise to hear the Minister state that he was unashamedly on the side of making big schemes bigger and making small schemes sing for their survival (if you can sing a VFM assessment).
The TCFD proposals, the introduction of “less liquids” and the VFM improvements from economies of scale are all loaded on big schemes. AgeWage research suggests that he is right to consider “big” > £100m, we find Value for Money can be found in smaller schemes but that the likelihood of getting it is a lot higher with bigger schemes (our measure of VfM is +50 on our scoring system)
CDC – more to come
Despite fighting hard for its inclusion in the Bill, the Minister is not quite on the CDC agenda, he struggled to remember the bit about master trusts (section 47 Minister) and he repeated the usual platitudes about employers lining up to follow the Royal Mail.
CDC is an unexploded time-bomb that could change DB and DC in ways that no-one in Government really wants to talk about. The Pension Schemes Bill is lighting the touch paper but who knows whether the fuse will fizzle out or the CDC time-bomb will blow old certainties to pieces.
Pension scams – awareness not lockdown.
With Stephen Timms hard at it in the WPSC and an all party committee formed by the TTF, there is plenty of parliamentary action on scams. The emphasis was on helping savers “spot and avoid” and not on putting pensions in lockdown. Yes Minister.
Super superfunds
Opperman is clearly proud of himself for getting Superfunds in play. Whatever the deal he did with the Treasury (and I suspect that a lot of this campaigning for illiquids was part of it), he has pulled off a coup with his temporary legislation.
For the first and only time on the Zoom, the Minister read a pre-prepared statement on superfunds and it was only here that he reverted to the kind of banal platitudes and civil service jargon that we have had to endure from time immemorial.
Climate change – the defining issue of our time and for pensions
Having to do a little commercial break for superfunds was not going to stop the Minister who launched into hyperbole on Britain’s pre-eminence in terms of financial disclosures.
He brought to our attention the correspondence between him and the late head honcho at the FCA – Chris Woollard that Derek Scott has posted in the comments of this blog. I will publish the two letters in question which do indeed show that the lion can lie down with the lamb. I will publish these letter on this blog.
All this in the context of what the Minister climactically christened “a new industrial revolution”!
And so on
Showing a remarkable range of interests, the final section of the Zoom paid homage to Aviva and Nest – for ESG upgrading their defaults (L&G’s news arrived too late).
There was a short commercial for the Sidecar Savings project which is apparently taking organisations like BT by storm.
The DB section of the Pension Schemes Bill was given a hospital pass to Charles Counsell , who will be speaking later in the week (though the Minister referenced a constructive meeting with Open Schemes earlier in the month which bodes well for the Bowles Amendment.
Finally there was a tip of the hat to the mid life MOT (again led by Aviva) and the usual thanks and back-slapping all round for surviving the first wave of the pandemic.
What was not said
The Pensions Minister has power over the State Pension and has control over retirement ages. Nothing was said about either – nor about WASPI.
Nothing was said about tax – all questions were referred to the Treasury and no mention was made of the net pay anomaly.
Questions about increases to AE contribution rates were parked in the post pandemic siding (though this did not stop the PLSA running an AE session almost exclusively on increasing contributions to AE).
Getting Britain match-fit for the future.
Whether he is kicked by his horse or by personal loss, the Pensions Minister is nothing if not resilient. He has survived four years and is the same jolly fellow who arrived in the job early in 2017.
He shows no sign of giving up in 2021 and all the signs are that he will continue on his way. We know what he cares about – a digital economy – combatting climate change and financial inclusion.
At a recent meeting he asked a group of us to not bring him problems but oven-ready solutions. I guess the ministerial door is open and this speech was an invitation to a new Zoom-assisted form of open Government. Yes Minister.