Pressure is mounting on the Government to announce a Pensions Bill in the Queen’s Speech on Wednesday. Over the weekend the DWP Committee reiterated its view that a Bill is necessary, following its letter to the Chancellor only a few days earlier.
The key focus of a Bill is likely to be occupational pension governance. There is widespread disquiet about the ease with which it is possible to set up and run occupational pensions, with some Master Trusts in particular being seen as an accident waiting to happen. Key industry players including the Pensions Regulator, the Pensions Minister and the DWP Committee have all recently expressed concerns about these schemes.
Similarly, the shortcomings of the current regulatory and statutory protections afforded to final salary scheme members, following the recent financial travails of certain high profile employers are increasingly difficult for the government to ignore.
Hargreaves Lansdown comment: Tom McPhail, Head of Retirement Policy “The UK’s workplace pensions sector is crying out for consolidation. There are tens of thousands of defined contribution schemes, thousands of final salary schemes and dozens of Master Trusts in the UK; this is a lot too many. Looking after individuals’ retirement savings is a responsibility which demands robust safeguards and controls. The process of setting up and running some types of pension scheme, such as Master Trusts is very light, with relatively little scrutiny of the individuals involved or the financial resources standing behind them.
Recent high profile final salary scheme problems illustrate that the governance of workplace pensions generally is in need of review. This would be an opportune moment to raise the bar on workplace pension standards generally and to reassure the public that their retirement savings are in safe hands.” Do get in touch if you want any additional comment or information, or if you want to arrange any interviews today or later this week.