From the blog: The run up to Christmas saw a flurry of political activity to cap off what has been an exhausting year, with two separate Department for Work and Pensions consultation launches complemented by the Work and Pensions Select Committee’s report on defined benefit.
Indeed, a cursory glance at the DWP’s website reveals that there have been almost twice as many pension consultation announcements released over the year than the pre-2016 average.
Plenty of stories to keep financial journalists busy then, but are schemes able to keep up with the sheer pace of legislative review and change?
Indeed, a cursory glance at the DWP’s website reveals that there have been almost twice as many pension consultation announcements released over the year than the pre-2016 average.
Plenty of stories to keep financial journalists busy then, but are schemes able to keep up with the sheer pace of legislative review and change?
If the industry is united about anything, certainly it’s united about the fact that there should be a pause
Ian Neale, Aries Insight
Lay trustees and pension managers already work under considerable time pressure, and even the most diligent among them would struggle to be alert to, process and respond to the slew of fresh issues that affect them directly.
Burning platforms
However, it’s not hard to pinpoint the underlying causes of this legislative concern, and therein lies the legitimacy of the mass of consultations issued.
2016 has seen huge compression in real yields, high-profile insolvencies and further confirmation that DC pension provision in its current state is set to fail millions of younger workers.
Moreover, significant challenges lie ahead in adapting regulation to deliver and enhance the gargantuan policy shifts brought about by freedom and choice and auto-enrolment – as the DWP recognises.
“Since 2010 we have delivered wide-scale pensions reforms, and it is only right that we consult with the industry and stakeholders on certain issues to ensure that we are putting in place a system that works for everyone,” a spokesperson said.
A well-deserved break?
Neither are the majority of these policy decisions the kind of tinkering or ‘salami slicing’ that so irked some industry figures about George Osborne’s Treasury administration.
As Andrew Pennie, marketing director at Intelligent Pensions, commented on the recent decision to merge the Pensions Advisory Service, Pension Wise and the Money Advice Service into one body: “[The previous system] was a bit clumsy and probably not very cost-effective.”
But despite these burning platforms, the headache for those on the receiving end remains. Some heads of pensions, such as Heathrow Airport Holdings’ Chris Parrott, have made their distaste for ceaseless change known quite vociferously.
And Ian Neale, director at intelligence provider Aries Insight, agreed: “If the industry is united about anything, certainly it’s united about the fact that there should be a pause.”
We’ve had a veritable glut of pensions policy over 2016. That looks unlikely to change in 2017, but perhaps it’s time for a dry January to let things settle?
