The joy of innovation
I was at a pension event yesterday – about investment innovation. It was fun because it was full of LGPS people who still see pensions as an investment for the future rather than an endgame and even the people there from corporate pensions were looking at ways to make things better for DC and even CDC savers.
I was a devil and had ample opportunities to tease and question the great and the good on stage. Thanks to the great and the good for taking it in good heart. I suspect we were under Chatham House so I won’t go into personal detail other than to say that we left the meeting in rather better heart than we joined it. I suspect this was because we were thinking about what we could do for our schemes and not worrying about what the regulators would do to us.
People pissed by lack of pension progress
Across town, Jo Cumbo was attending another meeting of the Society of Pension Professionals . Here is her report.
Meanwhile, the Pensions Management Institute dis-satisfaction with pension policy is rising among its 7000-strong membership.
66% of respondents to a PMI survey believed pension policy has been “dissatisfactory” in the past 6 months – up from 61% last year.
— Josephine Cumbo (@JosephineCumbo) May 1, 2024
This does not surprise me. When you think of the number of half- completed initiatives we have had since Steve Webb’s departure from office in 2015, you have to question the capacity of the DWP to get the right legislation done and the Pensions Regulator for getting good ideas over the line.
We face a grim election year without a pensions dashboard, without a CDC scheme- let alone the enabling legislation to make CDC happen for small employers and individuals. The Mansion House reforms have born little fruit, save where DB schemes are running on (see above) and master trusts and occupational schemes continue to moan about operational and commercial reasons not to improve defaults. The Value for Money proposals have not moved on since the lame consultation response last year.
We have had some proposals for innovation but plenty little happening (yet). The superfund initiative has become a bridge to buy-out, capital backed journey plans are baulked by PPF and TPR and an attempt to offer DB from DC pots is being knocked back before it has even begun.
In short, the pension ministers since Webb can’t promote so much as a mid-life MOT to their name. All we have had is a Pension Schemes Act in 2021 which gave the Pension Regulator the power to preside over a quiet graveyard.
No prospect of better?
The departure of yet another anonymous Labour politician from the job of Shadow Pensions Minister has been greeted with more pessimism
“someone with interest in and knowledge of pensions”
Pass it on…
(Failing this I guess any old MP looking to climb the greasy pole of ministerial success will do.) https://t.co/JFzh6AvXHj
— Mike Harrison (@HigherEdActuary) May 1, 2024
Jo Cumbo is even more scathing
This map shows a landslide for Labour but where are the details of its pension policy? #GeneralElection #UK #pensions https://t.co/bqqLiKCo7k
— Josephine Cumbo (@JosephineCumbo) May 1, 2024
This is likely to be two years the other side of general election , itself 9 years after the current Government announced the dashboard was imminent. The reality is that we still have no way of delivering even the combined pension forecast we were looking at in 2004 – that’s 20 years ago.
What prospect of better is there? I see very little, so long as we rely on politicians to shape the pensions agenda.
The power of change is in our hands!
When the pensions industry is allowed to get on with innovating and delivering good things to ordinary people, it does. Auto-enrolment sorted itself out because the industry consorted with politicians and ministers and explained what was needed for it to work.
Policy was made on the hoof and between 2010 and 2015 a lot got done. At the same time, a huge change to the state pension happened without much fuss and bother. The DWP set out what it was going to do and got on with it.
This was all done with minimal consultation and maximum effectiveness. It shows that with a strong hand at the tiller (Webb’s) , things can get done. I hate to say it that what has happened since has been a shit-show – and that’s without going into the £166bn loss to pensions from Truss-enomics.
Yesterday was a joyous day for me , for I was surrounded by positive people who felt, as I did, that the future of pensions was in our hands. I guess it was different across town.
I was asked for the one thing that I wanted to see change in pensions. I didn’t have time to think, I just had to say it
I want a change in mindset at the Pensions Regulator to allow us to get on and do the things we want to do.
Things can and will get better, but we must take responsibility for making that happen. It is not enough to accept mediocrity , the power to change is in our hands.