Pensions doesn’t exist in a political vacuum. The Government is currently in deep trouble with the electorate and looking to do serious things with pensions to prove that it can be innovative with our money.

It is being expedient, ditching policies which if launched unsuccessfully prior to an election (Q42024/Q1 2025) could harm its remaining credibility. So the dashboard’s DAP has been pushed well into the next term as have the implementation of the 2017 AE reforms.

But Laura Trott and the DWP and Andrew Griffiths and the Treasury would like our current administration to be remembered for more than deferring decisions, they will want to get some things done this term, knowing it could well see the end of Conservative power that will , by the election, have lasted 14 years.

Time is running out

The Trott agenda was laid out at her accession, to create a VFM framework for DC, to level the gap between DB and DC saving and to make pensions more productive for the economy.

We know that the Treasury want to tackle those areas of pensions that are currently available to them (DC pots, PPF, LGPS and some private DB) to put our money to work growing the UK.  Though the pensions industry worries about fiduciary duty, there is considerable support for making more of our pensions – I expect the Treasury to be quite brutal in demanding action in October.

As regards levelling DC up to DB, the headline reform is CDC – but – beyond Royal Mail, CDC is not getting traction. The USS wants to introduced conditional indexation but that is some way from the abandonment of guarantees a return to “best endeavours DB” that CDC hardliners still yearn for. The Government has probably left it too late to get anything done on CDC style decumulation and the best it can hope for is to hand over the results of a forthcoming consultation to the next administration.

The one new policy initiative on which Trott and the DWP is pinning its hopes is the VFM framework which was initially about helping large schemes consolidate to create the kind of DC schemes which could invest in illiquids. Along the way, the DWP has woken up to the real problem which is not consolidation but the way in which consolidation is happening. Consolidation is engendering a race to the bottom on price – actually excluding the kind of investments Andrew Griffiths and the Treasury has in mind.

So VFM is now about finding ways to promote value – not limit cost and the use of the VFM framework is increasingly targeting employers  with the challenge of showing their members “good outcomes” rather than a rock-bottom AMC.

The problem with the VFM Framework is that it has yet to light the blue touch paper of popular imagination. Unlike finding lost pots  using a dashboard or re-promoting the policy success of AE, VFM is hard to communicate and low-value in terms of votes.

So I expect that between now and the end of the consultation period, the VFM Framework will come up with some kind of rabbit that the DWP can pull out of a hat, allowing Laura Trott and the DWP to go into the next election on a high.

That’s going to mean taking some risk, something that we’ve seen very little of lately. My guess is that the VFM framework is where Government interventions will be most telling, though whether this can translate into a “policy win”, I doubt.

How will this Government be remembered?

The Conservative Government will not be remembered for what it planned to do, or even what it’s in the process of doing but for three things that have made a real difference

1. Reform of the State Pension – actually a LibDem win for Steve Webb – but claimed by Conservatives
2. Auto-enrolment –  actually a Labour party policy claimed by Steve Webb for the coalition
3. Pension Freedoms – a populist strategy which won plaudits at the time but is haing a long-COVID style impact on people’s pension planning,

Taken together, 13 years of rule looks to have worked well enough, largely down to the consensus created by the Pension Commission. But the years since the coalition have been years of regression , with complacency leading to the DC and DB disasters of 2022 and with the public scratching their heads as to what they are supposed to do.

The failure to see through the pension dashboard and AE reforms, the failure to develop CDC as more than a policy workaround for Royal Mail and the extinction of open corporate DB schemes are the blackspots on the DWP’s record, though they will probably be most criticised for their failures to communicate to WASPI and to deal with administrative problems in the aftermath of State Pension Reform.

We will see over the next few weeks whether Laura Trott has got a rabbit in her hat, otherwise we will have to put the post coalition pension era down as a bit of a wash-out.