I’ve just read Pension Expert’s lengthy article “2022-Lawyers-call-for-regulatory-pension-pause“.
Rather than a pause in legislation, I’d like to see a pause in moaning – and a focus on simplifying the pension system by focusing on consolidation
I have little sympathy for lawyers who call for a slowdown in regulatory change for occupational pensions. Pension lawyers like to position themselves as the champions of beleaguered trustees, faced with an “impossible task” of understanding new rules and implementing what they call for.
But why should we feel sorry for trustees? Many professional firms of trustees are part of the legal practices that were cited by Pensions Expert as calling for the Government to slow down. More work for trustees leads to more work for lawyers and both can charge schemes for their services. The people who pay the bills are the sponsors of those schemes (employers) and the beneficiaries (members).
The days of the trustee board being packed with amateur volunteers are long gone, but advisers and their corporate trustees would like us still be asking the question “who’d be a trustee?”. The answer to that question should be “almost everyone reaching retirement and looking for some extra income from a portfolio career”.
I see no shortage of candidates queuing up outside the doors of the professional trustees who have cornered this particular market. The professional firms are extending the careers of superannuated actuaries, lawyers and FDs only too eager to profit from the increased obligations on schemes.
We should be much more worried about the conflict they face between overseeing these new obligations themselves and handing over these tasks to the managers of multi-employer schemes , superfunds and insurance companies.
Quite clearly there are many too many occupational schemes (whether DB or DC or a mix of the two). The new regulations they are facing are best shared by smaller schemes consolidating. But this is not in the interests of lawyers or their trustee firms,
Are the regulations in themselves worthwhile? Some are, some aren’t. Few would doubt he importance of TCFD but who- hand on heart – would rather see money spent on GMP equalization or on improving the funding of DC workplace schemes?
But I do not see pension lawyers , actuaries or trustees overly keen on waling away from the new work required of them. Compliance with these new regulations keeps the lights turned on in the expensive City offices I wonder past each evening. And so much of this work has been generated in the courts.
Look at the Mcloud judgement and its remedy, look at Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank PLC and others almost every change in regulation has resulted in legal challenges to rules that were set down by lawyers. These rules have proved inadequate to meet the societal changes we are seeing and are “requiring” tPR to provide secondary regulations and guidance. These rules and guidance are issued through consultations which themselves are wrangled over by legal advisers.
The Pension Expert article suggests that tPR has been forced by its consultation to push back the publication of its DB funding code. I wish this was the case, the delay in the funding code’s publication is more likely to result from its being bad legislation. It was created by lawyers too eager to extend the regulatory perimeter and further weaken the role of trustees to provide pensions.
This endless round of consultation is the result of lawyers’ obsession with promoting law. IT’s lawyers within the public sector arguing with lawyers in the private sector (Jarndyce v Jarndyce)
Is there a way out of this? Frankly there is not. The best we can expect from pension lawyers is that they stop complaining and look for ways of easing the misery of protracted disputes over equalization et al.
They should accept that much of the problem is of their making, rather than ceaselessly blaming everyone but themselves.