Pension scheme trustees and providers can play pivotal roles in a pension industry driven by a vocational need to do its best by savers, according to the pensions minister.
Addressing the Pensions UK Annual Conference in Manchester this week, Torsten Bell outlined the significant steps taken since he was appointed pensions minister in January, including the Pensions Investment Review, the Pension Schemes Bill, and the launch of the Pensions Commission.
However, he emphasised that legislation and regulation also had to be accompanied by a culture change.
The minister singled out the development of the Value for Money framework as part of a new impetus to drive up standards across the industry and ensure that savers were not stuck in poor arrangements.
“The pensions industry is full of heroes, and we need pension heroes, clear about what the task is, delivering for members and feeling the responsibility of acting on others’ behalf,” Bell said.
“This room is full of people with a vocation, because pensions aren’t just the jobs we do. Pensions are a vocation we must recognise, a vocation we should celebrate, and a vocation most of all to live up to.”
Trusteeship consultation coming later this year
Bell acknowledged that some of the measures in the Pension Schemes Bill would place additional expectations and requirements on trustees, and emphasised that trusteeship would have to evolve as the industry transitioned towards fewer, larger pension schemes.
The increasing influence of professional trustee firms and sole trustees meant more decisions were being made by small numbers of people, the minister said, and stated that a consultation would be launched later this year exploring these issues. He also indicated that consultants may feature in this consultation.
Bell observed that over half of UK pension schemes now employed professional trustees, up from 39% five years ago. He said: “Expertise is essential, not a dirty word.”
“This room is full of people with a vocation, because pensions aren’t just the jobs we do. Pensions are a vocation we must recognise, a vocation we should celebrate, and a vocation most of all to live up to.”
Torsten Bell, pensions minister
The pensions minister insisted that the government would not repeat the mistake of “leaving pensions until it’s too late”, and said that a long-standing consensus on the need for adequacy, consolidation, and better governance was finally becoming a reality.
