Between the lines

Some expressed relief at the fact pensions were barely mentioned, but others pointed out there were issues that should be addressed (read more).

One such issue is the state pension age; an early indication on what the government intends to do would create certainty and give the impression it knows what it wants, but perhaps that is the problem - it does not know.

And whether the defined benefit green paper will lead to anything is entirely uncertain; Theresa May promised greater powers for the Pensions Regulator during her election campaign, but that might be the only change we will see.

In the meantime, more schemes will use regulated apportionment arrangements. The mechanism designed to be used in exceptional cases is seeing more demand as employers in declining industries struggle to support their DB schemes.

The Pensions Institute, in its second Greatest Good report, argued that RAAs should be made more easily available so schemes can achieve ‘second-best’ outcomes – benefits that are lower than originally promised but higher than what the Pension Protection Fund offers (read more).

With defined benefits becoming a much less clearly defined guarantee, and an investment industry keen to get past ‘gatekeeping’ trustees to invest members’ money, it is little wonder that transfers have reached up to £50bn since 2015, according to the Financial Times and Mercer.

The trend has meant that the Strathclyde Pension Fund has started a communications exercise warning members of the risks of transferring out, as our case study shows.

Pensions might not have figured prominently in the Queen’s Speech as Brexit is prioritised. However, the vast amounts of money held in retirement savings – and the number of livelihoods that depend on it – mean the government will be unable to ignore the subject forever.

Sandra Wolf is editor at Pensions Expert. You can follow her on Twitter @SandraCWK and the team @pensions_expert.