Industry split on Webb's opposition to pension commission
Reaction from the industry on Minister for Pensions Steve Webb’s opposition to a pension commission has been mixed.
Speaking at the International Longevity Centre’s event to launch its report on a proposal for the need of a new commission, Webb explained why he is opposed to the idea.
“There is a risk that if we think we'll fix things by commission and actually what happens is we take years [...] we might have actually lost time when we could be achieving something that is urgent," he said.
He also noted that although a commission could achieve consensus, it means compromise. “The danger is consensus can equal compromise and sometimes that’s the lowest common denominator,” he added.
In agreement with the minister, Intelligent Pensions technical director David Trenner said Webb’s point is "very valid".
“If you go back to 2002 we had a consultation document; 2003 we had a second consultation document; 2004 we had an act and in 2006 we had something called simplification which has been anything but simple, so we spent years trying to work out what it ought to be and then didn’t get it right.”
BlackRock chairman of savings and investment policy project (TSIP) and head of UK retail Tony Stenning said that TSIP does not believe the proposal for a pension commission is the best we forward.
“We cannot wait three years to resolve the critical issue of the lack of savings in the UK and the impact this will have on the future financial well-being of consumers and the nation. We believe the best way forward is to engage with the political parties and agree the best means of maintaining pensions as an attractive savings vehicle for retirement whilst supporting greater levels of savings for those on lower / middle incomes.”
However, NAPF chief executive Joanne Segars said ensuring the long term interests of savers, not the short term interests of politicians, are at the heart of pensions policy and must be the priority of the next Parliament.
“It is vital for the long term interests of pension savers’ ultimate retirement outcomes that future changes in pensions policy are carefully thought out and implemented, which is why we need an independent retirement savings commission to focus on the long term and protect the interests of all savers.”
JLT Employee Benefits CEO Mark Wood thinks a commission is overdue and there is little incentive to save in a pension today. He stated the rule changes introduced in last year’s budget have undermined our understanding of a pension.
“The further changes recently hinted at by Ed Balls suggest that the encouragement of today’s workers to set money aside to pay for their necessities in old age is likely to be even less under a socialist administration. The likely impact of current arrangements is a generation of impoverished pensioners”.
NOW: Pensions CEO Morten Nilsson said he does think there is a need for an independent body to “take a step back and look at the whole picture” and play an important role in “achieving consensus”.
“The industry has been hit with a whole raft of reform and analysing how these reforms impact one another and considering the long term implications has to be beneficial. The changes made to the pension system today will only really be felt many years from now and to build momentum there has to be consistency and political consensus”.