Our pension schemes have never been in ruder health, but we predict a retirement crisis. How can this be?
It’s that time in the economic cycle when inflation floats DB schemes into solvency and sinks savers into despondency.
Reading the pension press , you’d struggle to make sense of pensions. Thankfully we have the Lang Cat for that.
Now installed in his Northumberland constituency, the Pensions Minister has spoken with Tom McPhail about his future , the future of his policies and about life as a father.
As a politician , he is in tune with the ineluctable modality of political life and is looking to the future with one eye to the certainty that state benefits bring and with another to engaging with market driven savings pots – which to most people pose some of the “nastiest hardest problems in finance“.
In this forty minute podcast (Guy Opperman II), Guy is in “characteristically forthright form”.
The family is in good shape, the father less so – underperformance in the Minister’s future performance is to be blamed on Flo, Kitto and Zola. How long he can hold this line is unclear.
Opperman’s view is that Pension Awareness Day/Week is never going to happen at the right time. Let’s hope that the messaging of the week includes sensible messaging like this from Standard Life
— Standard Life UK (@StandardLifeUK) August 15, 2022
Opperman has money for national interventions. The kind of interventions the Treasury are most likely to fund are interventions that reduces the tax-payer’s liabilities. Increasing saving puts more pressure on the Treasury ; so how about broadening the message! Right now we need some kind of vision that gives the Treasury some light at the end of the tunnel. How about a target for CDC for public sector pensions by 2030 (excluding the Treasury)?
Look out at about 15.00 to hear Aviva taken down for its lacklustre follow up to its pilot on the midlife MOT. Look out at 17.30 on the Government for Opperman ripping into the pension industry’s reaction to having to provide data to the dashboards. Look out at 20.30 for the Minister ripping into Nest (who will remain nameless) for not participating in small pots initiatives such as “member exchange“.
The legislative agenda
A call for evidence on small pots is happening in October so as to get a consultation and legislation through by 2024.
There will be a pilot of “member exchange” in October.
The consultation on value for money will hit our desks on November 1st. Costs and charges will not be first and foremost. The great pilot project will be Australia.
Consolidation will be beefed up to “mandatory consolidation in all but name” – Nick Sherry has convinced Guy Opperman
Sarah Smart of TPR has convinced Opperman that schemes must have professional trustees. She has driven forward “innovative thinking in this space”. Professional Trustees are going to be liable for what is going on.
Listen out at 27.30 for the brave new world of DC and engagement with decumulation which is “the project for the next 5 years”. At 28 minutes Opperman takes decumulation back from the FCA – much to the consternation of Tom McPhail!
Look out at 30 minutes for Opperman’s admission that the Treasury and DWP don’t work together and 15 seconds later for the admission that the FCA and TPR don’t get along.
None of this sounds remotely like a Minister who is on his way out, it sounds like a Minister who has convinced himself that if he gets half a chance – he will serve under “whoever is the next Prime Minister” (Liz Truss)
And as for pensions that are actually pensions…
The final 10 minutes of the Podcast is devoted to State Pensions and Pension Credit. Stephen Timms and Steve Webb are once again blamed for the current DWP problems with the State Pension, Gordon Brown blamed for the problems with applying for Pension Credit. My Mum gets dragged into the argument as someone who is housing rich and cash poor – (if only her big house was in London).
It was good to finish as the podcast did, frankly Opperman hasn’t paid much attention to defined benefit and state pensions and his recent run at Pension Credit is well overdue. Pensions are in great shape, savers are in rotten shape – we need a Pension Minister who can bring pensions and savings together – if Guy Opperman intends to do that – then I think he’s got a good few podcasts left in him.