Centre-left think tank The Fabian Society and centre-right Bright Blue have joined forces to call for a Turner-style commission to address challenges such as the future of auto-enrolment and pension decumulation.
The think tanks say the future of State Pension Age should be excluded from the initial review, as there is currently a separate review in process.
The commission should be established in 2020 and last until 2022 at the latest, say the think tanks. It should develop plans for the commission to then become a permanent scrutiny body like the Office for Budget Responsibility (OBR). The commission would provide regular forecasts and analysis, and host major thematic reviews of policy every ten years.
The initial review should be tasked to respond to specific problems facing pensions policy – chiefly the future of auto-enrolment and pension decumulation – but the permanent body should have an open remit to examine all pension-related issues.
The think tanks have recommended the following structure:
- There should be around five commissioners, appointed by Ministers, and a small secretariat of civil servants and expert secondees.
- Commissioners should bring the perspective of employers, employees, self-employed people, the pensions industry, and independent experts. The Chair should be independent.
- The initial one-off commission should be launched by and report to the Prime Minister and be accountable to Number 10.
- The permanent commission should be arms-length from government departments but placed on a statutory footing with full access to official data and modelling. It should report to the Treasury and Department for Work and Pensions jointly.
- The commission should have a responsibility to provide analysis and scrutiny, and make recommendations, but also to build political consensus and public understanding.
Bright Blue chief executive Ryan Shorthouse says: “There has been substantial progress on pensions policy, especially the introduction and extension of auto-enrolment, because of the cross-party consensus which the Turner Commission of the early 2000s cultivated.
“But there’s more to do. And the consensus is fraying, especially on the state pension age and with pensions freedoms later in life.
“New pensions policies are now needed, which can command support across the political spectrum and ensure people have higher incomes and good advice in retirement in the decades ahead. In fact, a new pensions commission – permanently located at the heart of Whitehall – could provide the expert analysis and advice that is needed to develop good pensions policy and hold the government to account.”
Fabian Society general secretary Andrew Harrop says: “Senior politicians from both the Conservative and Labour parties told us that they wanted a new pensions commission. The experts we spoke to agreed.
“The political parties fall out over lots of things but this collaboration between a left wing and right wing think tank shows there is common ground on pensions policy. All sides can unite around our call for a big-picture review of pensions that would then evolve into a permanent commission modelled on the OBR.
“At the start of a new parliament, there will never be a better time to establish a rigorous and independent pensions commission.”
Guy Opperman MP, Minister for Pensions, says: “Over the last decade, Conservative and coalition governments have made huge strides to improve pensions for the next generation, with the introduction of auto-enrolment, an enhanced state pension and the development of the Pensions Dashboard.
“For the next stage of pension reform, we need to continue the consensus that emerged following the Pensions Commission of 2003 to 2005. A new Commission has cross-party support, and will help us map out the future of auto-enrolment, so we can boost contribution rates in the coming decades, and explore how we can support savers with pensions freedom reforms.
“Let’s not give up on the progress we’ve made in pensions through cross-party working. It’s time to explore ideas for the next generation.“
Gregg McClymont, Director of Policy at The People’s Pension and former shadow pensions minister, said: “Now’s the time to restate the strong case for a new Pensions Commission. With a healthy majority, the new government could be forgiven for being tempted to go its own way. But pensions are measured not over five years but over a lifetime. We might never get to Swedish levels of consensus – where all major pensions changes have to be agreed cross-party to ensure stable policy – but surely we can get agreement on the facts and the right direction of travel. This is what the first Pensions Commission achieved and what a new commission designed on the principles set out in this report can repeat.”