The government’s reform agenda will take a long time to implement, as it set out this week. But for some - most notably the LGPS - the timeframes are not so long, as Pensions Expert’s editor Nick Reeve points out.
I’ve been thinking a lot about time this week. In the space of eight days, we have seen the publication of two of the most consequential documents for the pensions sector since the Turner Commission’s report in 2005.
One of the (many) industry concerns about the reach of the government’s reforms has been how ambitious they are and how much time they will take to implement. That’s why the “roadmap”, released yesterday alongside the Pension Schemes Bill, was so important.
The government has set out a 10-year plan for the implementation of its defined contribution (DC) reforms, with the Value for Money regime not expected to be in force for at least another two years. Some DC master trusts will be grateful for the long period – up to a decade – they have been granted to reach the magic £25bn figure.
One of my colleagues on another pensions trade publication (yes, there are others, but there is only one Pensions Expert) asked pensions minister Torsten Bell whether it was a concern that the next government would be left holding a bunch of half-implemented plans and consultations.
A valid question, and while it was met with mock outrage at the idea that Labour wouldn’t be in power past the next election, Bell and his fellow ministers do seem confident they will see this through. Time, and the electorate, will tell.
This decade-long approach to private sector changes contrasts starkly with the timeframe for Local Government Pension Scheme (LGPS) pooling. The 31 March 2026 deadline for all assets to be pooled seems set in stone, despite the best lobbying efforts of the Scheme Advisory Board.
On one hand, the direction of travel has been clear almost from the outset of the pooling project a decade ago that successive governments have wanted the pools to take over all assets from the 86 underlying funds in England and Wales.
On the other hand, however, there are many private markets assets and local investments that it will be legally difficult or even impossible to transfer by this deadline. There will need to be more pragmatism from government at some stage.
If you’ve yet to have your fill of pension reform coverage, you can catch up with our Pensions Investment Review reports here, and I delved into the investment backstop power contained in the Pension Schemes Bill in this article.
The devil in the detail: What is the government’s investment backstop power?
The government has included a controversial ‘backstop’ power in the Pension Schemes Bill to allow it to mandate specific asset allocations. The pensions minister is adamant that there is no intention to use it, but lawyers and the trade body for pension schemes still harbour serious concerns. Read more
If you’ve had enough government intervention for one week, I totally understand. Time for us all to enjoy the (pensions-free) weekend.
Nick Reeve is editor of Pensions Expert.
This editorial initially appeared in Pensions Expert’s Friday Takeaway email, summarising the biggest news of the week and the latest appointments announcements. To sign up, please register for free.
