Thursday, October 04, 2012

Lab12: Workplace pension fringe

This fringe by NAPF/Smith Institute was on Monday. Gregg McClymont MP, pension shadow minister is speaking. Monday (1 October) was of course the day that Workplace Pensions began. So it was pension wise, a special and even historic day.

The Labour position outlined by Gregg is encouraging. He wants full transparency on charges. He wants to encourage scale. There are nearly 50k pension schemes in the UK. Pensions should not be a "cottage industry".  Policy now is for member Trustees for all pension funds (including those run by insurance companies) and changes in fiduciary duties.

NAPF CEO Joanne Segars spoke next about how it is interesting that pensions are being reported for the first time in a largely positive way. By Christmas 500k extra people will be saving for their pensions. Their research is that 2/3rd of people will not opt out. She agreed with Gregg about scale and also the need to have a better alignment of interests between savers and pension providers.
My question was that one of the reasons why there has been a low take up of pensions so far is that people are not stupid, they realise that the products currently offered are often pretty rubbish and that they do not want to take all the defined contribution (DC) investment risk.  I wondered if the new look Local Government Pension Scheme 2014 could not be a model for a rebirth of sustainable and affordable defined benefit schemes in the private sector?
Gregg thought the idea was interesting while Joanne reminded everyone that many defined benefit schemes were in serious difficulties.
This was the first of four pension fringes I attended this conference. One was under Chatham House rules so I can't post on it which is a great shame but I will do the others (eventually).

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