It was pensions wot dunnit!

There are a number of frustrated policy wonks working for our consultancies , life companies and workplace pensions , for whom Guy Opperman’s resignation came an hour too early. I include myself in that wonkery. But a sense of humor is required and no doubt all parties will see the funny side of Naga’s shocked expression (thanks Rob Cochrane)/

In retrospect, the Pensions Minister’s comment “Well, after five years of doing this job I can finally give my opinion on Steve Webb” , could be construed as “I know I’m going, now’s my chance”. (You can listen to it at 11.28 at the Work and Pensions Committee). The comments that followed included “I wish he had done his job better, when he was the Minister,  as I am cleaning up the mess now”.

It is a shame that the Minister’s tenure and the exhaustive inquiry from WPC, ended on this sour note.

The big mess

Within 24 hours , the Minister had resigned and shortly after, the DWP issued its 2021-22 report and accounts that revealed a new category of errors in the recording of Home Responsibilities Protection (state pension credits for carers), a ballooning of compensation payments for existing problems and an extension of the redress period from 2023 to 2024.

DWP now say that the bill for fixing the state pension underpayments we discovered working with @thisismoney has risen from £1 billion to £1.3bn, with an extra 90,000 people thought to have lost out (now totalling 220,000) 2/3 pic.twitter.com/KAbJXny6Q5

— Steve Webb (@stevewebb1) July 7, 2022

There certainly is a big mess to be cleaned up, which is weighing on the exchequer, not just for previously unaccounted for payments, but the time of over 500 civil servants sorting the problems.

The problem is being heavily publicised on the BBC website. Predictably, the DWP has no one to make a comment. The floor is  Steve Webb’s. Again , it is a shame that this is the way that Guy Opperman’s tenure has ended.

The pensions world seems divided on Opperman, DC people love him , DB people loathe him but everyone agrees that he brought stability to the DWP’s pension team.

The little mess

The pensions industry tends to downplay the issues of the state pension and overplay the various initiatives put in place by the Pensions Minister around pension engagement. There are a number of projects left “hanging” , including the former minister’s “pension engagement season”, disapprovingly referred to as a “vanity project” by Webb and others. I am left with the organisation of a “CEOs meet the Minister” event on Pension Credit next week, with no direction as to how to proceed. There is chaos at present, we needn’t make it worse – we remain calm!

The summer recess is upon us, and much had been planned to be crammed into the next week. A number of further reforms were indeed planned, and several are in relatively late stages of development, such as regulations for the new defined benefit funding code, auto-enrolment expansion, the single code of practice, and the Pensions Regulator’s notifiable events regime. But the future of these reforms is now in doubt as ministerial resignations have brought things to a standstill.

But we have been here before, the Brexit debate delayed the  2021 Pension Act , COVID delayed everything and the current “kerfuffle” will push things back further. The one major project that needs to be prioritised, is the pensions dashboard, which has suffered more than any other since its genesis in 2015.

The importance of junior ministers.

Guy Opperman was the first pensions minister to suffer the downgrade of post to “junior minister” but this may be of some help to him now, if he is keen to pick up the reins again.

Junior ministers are seen in Westminster as the workhorses that get legislation over the line. Steve Webb may poo-poo Opperman’s lack of understanding of the state pension system and lack of interest in the what Opperman calls “techy” detail on DB pensions, but Opperman applied himself to the business of getting the Pension Schemes Act 2021 over the line with the tenacity of his hound Zola.

The importance of junior ministers was recognised several times yesterday, as commentators grappled with how the country would function in the next three months without the like of Guy Opperman in post.

I hope Guy Opperman returns to post, though there are undoubtedly complications to this happening which are known only to those “within the village”.

Let’s not make a pension drama out of a political crisis.

There are many bigger threats to the country than the loss of time on the pensions legislative agenda. We all know what they are.

I hope that continuity will be restored but suspect that it will be too late to get stuff over the line before the summer recess.

We all have to live with the consequences of political change and accept it as part of the democratic process.

Let’s hope not