Pension companies are calling for a cross-party ‘grand implementation plan’ to ensure wide-reaching reforms, currently being proposed, are introduced in managed stages over the next decade.
A host of DWP consultations close today on proposals that were initially floated in the Chancellor’s Mansion House speech in July. These significant reforms come on top of planned auto-enrolment enhancement and the delayed implementation of the pensions dashboard.
These consultations cover the introduction decumulation-only CDC, potential solutions for the small pension pot problem, wider retirement choices for trust-based scheme members, DB changes, improving the skillset of trustees and plans to encourage wider investment into more illiquid assets.
In order to manage these changes Aegon has suggested a pensions roadmap, running until 2030, a period which is likely to cover two general elections.
Aegon pensions director Steven Cameron says: “The Government and regulators have gone into overdrive with a highly ambitious and radical pack of pension policy proposals.
“With so many links and inter-dependencies, we need a ‘grand implementation plan’ which in light of the forthcoming general election would hopefully have support across political parties.
“This will include setting priorities, reflecting both a logical sequence but also importantly the size of potential improvements in member outcomes.”
He adds that the DWP’s own analysis shows that enhancements to auto-enrolment could improve member outcomes by more than all the other policy initiatives.
Cameron adds: “We urge government to concurrently focus on the value for money framework, which is expected to lead to greater, faster scheme consolidation, and pension dashboards. These will both have particularly far-reaching benefits for many millions of members as well as being important building blocks to offering wider retirement choices for trust-based members as well as solutions to small deferred pension pots.
“In contrast, we’d recommend deferring any requirement for trustees to design default retirement income solutions until later in the decade, while consideration of decumulation-only CDC needs to factor in both the many outstanding questions here as well as the time industry will take to consider supplying these.”