Legislative table tennis bats at the ready, it’s time for pensions policy ping-pong! Pensions Expert editor Nick Reeve dusts off his paddle and asks whether there are bigger problems to solve.
This week’s major news involved the Pension Schemes Bill (again), with MPs voting down all amendments made by the House of Lords. As I opined in the latest episode of Always A Pensions Angle – out on Monday, so sign up now wherever you get your podcasts – in some respects, this has made it all seem a bit of a damp squib.
Having spent months reporting on the various stages of the bill’s development and the mounting, near-universal opposition to the government’s “reserve power”, aka mandation, to see well-thought-through arguments and amendments voted down so swiftly felt like an anti-climax.
Enter Baroness Ros Altmann, a former pensions minister, who posted on LinkedIn this morning: “The House of Lords will stand firm against this idea that [the government] must force a reluctant pensions industry to invest in private assets, even if the managers don’t believe it is right for their members.”
The reasons for rejection will be debated by the Lords on Monday, and we’ll soon discover whether Baroness Altmann can corral her fellow peers for a fight on this issue. Political ping-pong bats at the ready.
Meanwhile, new research was published this week that attempted to assess how the public feels about some of the biggest and most controversial areas of pension reform. Mandation was obviously a big topic, and it was interesting to see that the 2,000 people surveyed by Public First were split on the issue. Some voters are clearly in favour of greater domestic investment regardless of returns, while almost the same proportion put returns first.
At the same time, however, there is a clear trust issue. The poll asked respondents who they trusted most to maximise returns and pension income, and the winner was… “don’t know” (22%). Torsten Bell will have to make do with a bronze medal, as the government polled third with 15%, while pension providers ranked second with 21%.
It’s more than likely we will end up with mandation in some form, hopefully with enough caveats to make it almost impossible to (mis)use. But this trust issue is a big one, and it will take more than a new piece of legislation to address.
Nick Reeve is editor of Pensions Expert.
