Richard Wilson’s proposals to turn pensions upside down

This is the recording of Richard Wilson’s presentation and conversation with the Pension PlayPen on Tuesday 6th December 2022

We have much to learn from Australia, something that former Pension Minister Guy Opperman made his mantra (we await whether his successor will show the same enthusiasm).

Yesterday, Richard Wilson, GM (Emea) of the Link Group talked us through the findings of Link’s research on how the UK and Australia shape up. Link is not the first Australian administrator to come to the UK but it is the first to buy-into UK administration and at this time, with DB buy-out and pension dashboards so in need of clean data, any investor who values administration is most welcome.

Richard was made most welcome at yesterday’s Pension PlayPen coffee morning and his comments sparked an interesting debate. Here’s the gist of  what Richard reckons Australia can teach us.

“Retirement readiness” is a euphemism for mandatory contributions, which the Australians are keen on. You can only opt-out of pensions by opting-out of employment (either into self-employment or unemployment).

I think it unlikely that the UK will adopt a compulsory contribution system, especially having learned auto-enrolment to the point where compliance appears pretty well universal. More importantly, people value the right not to save and show remarkable resilience at times like this (AE providers continue to report low opt-outs though the worst may still be to come).

As regards “members choice”, Wilson’s argument is for a central hub that payroll can access to allow contributions to fly off to the provider of the member’s choice. Members could actively choose or simply carry with them the Super scheme they started with. This is attractive to providers who don’t get burdened with small pots and could create more engagement between member, provider and pot.

But , as Adrian Boulding pointed out, a hub would dilute the value of the employer’s choice of scheme. While employers have been slow to promote their choice of workplace pension (possibly wary of it) , there is a longstanding  link between employer and provider that can grow with time. The employer is the unsung hero of auto-enrolment, I am wary of member choice and prefer systems that clear deferred members to the next scheme and exchange member pots without consent but to the general good.

The Australian history of industry wide schemes has always had multi-employer schemes at its heart, a large number of affluent members of Super schemes have chosen to transfer to self-managed arrangements , breaking the link with employer and Super but this trend has recently levelled off.  Confidence is returning to Supers and I suspect that there is confidence in our system of workplace pension providers.  In my view we do not need hubs in this country and I believe this is the view of the small pots working group too.

So far I have pushed back on Richard Wilson’s recommendations but on the third, I am right behind him. The Australian Government and Regulator are giving the clear messages that we should be giving UK retirement savers

The Common Purpose to afford savers dignity in retirement through an income that lasts as long as they do , is a fine construct which can be adapted in the UK.

The hassle of running workplace pensions from two regulators is a hassle that the Australians have avoided, we need a common workplace pension regulator as well as a common purpose.

The long term strategy in Australia , results from its Retirement Income Covenant. This is something that works for the UK too, not only is it compelling all retirement schemes to get behind the Common Purpose, but it is making sure that people consider their accumulated pot as replacement income.

The Australians are , as a nation , more engaged with their savings pot than we are, but a lot of that is because that is pretty well all that many will have for retirement income .  A means tested state pension that looks more like our pension credit is not the anchor of our Single State Pension and there is little of the DB provision from which many boomers will draw benefits in the UK. Nor does the Australian system provide public sector employees with a tax-payer funded public sector pension.

Australians apparently discuss their Super balances at dinner. This tells me not to go to Australian dinner parties.

We should be wary of comparisons that suggest we are failing to engage savers with pensions, frankly, most people have relatively little reliance on private pensions in this country , as demonstrated by this chart.

We have much going for us in this country. The paternalism that Richard talked of extends to a relatively paternal state system as well as paternal employer pension participation.

Savers however are relatively poorly treated by the system, we have yet to catch up with APRA and the Australian Government in implementing a consistent and common purpose to pensions and a means to achieve that strategic aim.




About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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