NAPF 2015: Delegates at the National Association of Pension Funds 2015 Annual Conference heard a tale of two halves from outgoing chair Ruston Smith in his opening address today.
Smith spoke of the NAPF’s good work over recent months as he welcomed delegates to the conference, but the government’s consultation on pensions tax relief was the headlining feature of his final speech as NAPF chair.
Smith lambasted the government’s motives for changes to tax relief.
“The government says it wants to strengthen the incentive to save – but its ulterior motive is to increase short-term tax revenue,” he said.
Smashing the incentives
Following the consultation deadline earlier this month, many across the industry released their proposals on how to strengthen the incentive for long-term saving.
If the government gets its way on reforms to pensions tax relief, we could see the recent wave of change – the pensions revolution – becoming a pensions implosion
Ruston Smith, NAPF
These tackled a range of ideas, from exempt-exempt-taxed at one end to an Isa-style system at the other.
Industry responses to the consultation appear to lean towards a rejection of a wholesale shift of the current pension tax system towards an Isa-style approach.
A change to pension taxation “could literally dig up and smash the foundations set to create a society of lifetime savers”, Smith said at the conference.
Working across the industry
Smith outlined the NAPF’s contribution to the UK pensions industry over the past 18 months, a period of unparalleled turbulence across the UK defined benefit and defined contribution arenas.
The NAPF’s work in Europe has helped to protect UK schemes and sponsors from the holistic balance sheet and secured a two-year extension to exempting pension schemes from the central clearing of over-the-counter derivatives, he said.
“Without our collective strength, the practical details of many of the last government’s freedom and choice reforms wouldn’t have gone our way,” said Smith on the association’s support of the industry through the April reforms.
The NAPF will be releasing new research on how members, providers and mastertrusts have responded and adapted to the first six months of the UK’s new pensions terrain during the conference.
Smith hailed the successes of the UK’s Pensions Infrastructure Platform in delivering “good quality infrastructure investment at a fraction of the typical cost” to large and small schemes.
However, the Pensions Infrastructure Platform has fallen far short of George Osborne's target of “up to £20bn” over a decadeand has so far attracted £1bn from pension scheme investors.
