Letter: Robert Gardner’s excellent article 'Collective response to an unprecedented problem' screams 'unsustainable': something has got to give. The question is what?
I doubt that any implementable proposals will come from within the industry: too many competing vested interests rule out the prospect of meaningful collaboration. So, an external disrupter is required.
An obvious candidate is the government, but it will not want to be associated with what will almost inevitably involve some broken promises in respect of defined benefit.
But the longer this is left unaddressed, the shorter the timeframe over which to break them, which will make the breaking of them all the more apparent (contrast this with putting the state pension age into retreat, done sufficiently far ahead of implementation that few get excited about it).
I doubt that any implementable proposals will come from within the industry: too many competing vested interests rule out the prospect of meaningful collaboration
Separately, in recent weeks I have led a series of lively debates about the future direction of the pensions industry, catalysed, of course, by the chancellor’s consultation into pension tax relief.
Appetite for disruption
It is clear that some firms are thinking positively and spotting potential opportunities, whereas ostrich-like behaviour is evident elsewhere.
Pensions industry views on Isa-style set-up
A flurry of organisations made public their responses to the chancellor's consultation on tax relief. Click here to see how the various proposals went down across the pensions industry.
I sense that growing support is emerging for a move to taxed-exempt-exempt and City analysts are now assessing the potentially profound stock market implications, both for industry participants and potential (tech-focused) new entrants.
Distribution strategies and product ranges may require a radical rethink by advisers, fund managers, life insurers, platform hosts, and third-party service providers (including actuaries, lawyers and trustees).
And perhaps a few banks will be tempted to (re)enter the arena.
Michael Johnson is a research fellow at the Centre for Policy Studies
