TUC Pensions Conference 2022: Wed 30 March virtual

 

Register Now https://www.tuc.org.uk/events/tuc-pensions-conference-2022

Overview

Auto-enrolment, the next 10 years

A decade on from the introduction of auto-enrolment, the 2022 TUC Pensions Conference will look at the priorities for pensions policy over the years ahead.

The conference will take place online via Zoom on Wednesday 30 March, 10:00 to 16:00, and is intended for trade union members and officials, pension fund trustees, and anyone with an interest in pensions policy.

This conference will explore the successes and short-comings of auto-enrolment, a policy that has enjoyed cross-party support and brought an extra 10 million workers into occupational pension schemes.

It will also examine how pension policy must develop to ensure that these new members – and the workers still excluded from occupational pensions – can maintain a decent standard of living in old age.

Sessions will cover:

• Extending auto-enrolment to close the gender pensions gap
• Investing defined contribution pension pots productively while protecting members’ savings
• The role of collective defined contribution in improving outcomes for today’s DC members
• The case against further increases to the state pension age

Speakers include:

Jonathan Ashworth, shadow work and pensions secretary; Paul Nowak, TUC; Mark Serwotka, PCS; Sue Ferns, Prospect; Stephen Timms MP; Richard Holden MP; Fiona Steele, Aegis; Joanne Segars, NOW Pensions; Hilary Salt, First Actuarial; Harinder Mann, RSA; Kate Bell, TUC; Nigel Stanley, NEST; Dr Iain Clacher, Leeds University Business School; Mick McAteer, Financial Inclusion Centre; Josephine Cumbo, Financial Times; Alicia Minns, DWP; Daniela Silcock, Pensions Policy Institute; Sonia Kataora, Barnett Waddingham, Andy Cheseldine, Capital Cranfield, Dr Carole Easton, Centre for Ageing Better, Sandeep Maudgil, Slaughter and May

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Programme:

10:00-10:40:    Opening keynote

Jonathan Ashworth, Shadow Secretary of State for Work and Pensions

Paul Nowak, TUC Deputy General Secretary     
  

10:40-11:40     Extending auto-enrolment to close the gender pensions gap

Sue Ferns, Prospect Senior Deputy General Secretary

Richard Holden MP

Joanne Segars, NOW Pensions Chair of Trustees

Fiona Steele, Aegis Deputy General Secretary

Daniela Silcock, Pensions Policy Institute Head of Policy Research
                 

11:50-12:50    DC investments: Making a positive impact without undermining consumer protections

Dr Iain Clacher, Professor of Pensions and Finance at Leeds University Business School

Mick McAteer, Financial Inclusion Centre Co-Director

Josephine Cumbo, Financial Times Global Pensions Correspondent

Sonia Kataora, Barnett Waddingham Head of DC Investment

Andy Cheseldine, Capital Cranfield Professional Trustee

Lunch break

13:55-14:55     Taking a collective approach to turning workers’ savings into retirement income

Stephen Timms MP, Work and Pensions Select Committee chair

Dr Harinder Mann, Royal Society of Arts CDC forum co-chair

Nigel Stanley, NEST Members’ Panel chair

Alicia Minns, DWP multiple employer collective pension schemes policy lead

Sandeep Maudgil, Slaughter and May Partner

15:00-16:00      State pension age review: Can we afford further increases?

Mark Serwotka, PCS General Secretary

Hilary Salt, First Actuarial Director

Kate Bell, TUC Head of Rights, International, Social and Economic

Dr Carole Easton, Centre for Ageing Better Chief Executive

Gregg McClymont MP at NAPF Conference 2014

Labour Shadow Pension Minister Gregg McClymont spoke (with a smile) about the previous speaker Bob Geldof being his "warm up act" this year. 

Gregg has now been coming to the NAPF Conference as Shadow minister for the last 4 years.

He has four key points.

1. There has been successful pension changes and measures which have been delivered with consensus.
2. We all need to deliver on pension promises
3. The Government is currently in the wrong place
4. It may have made decisive policy but not with the necessary checks and balances

His thoughts on these points

1. The new universal flat rate state pension and the successful launch of two million people into auto enrolment  was achieved by consensus.
2. The Government under pressure from the Labour Party and the NAPF have introduced a charge cap and the "disclosure" of transaction costs.

3. Where the Government is in a wrong place, is in the governance of pensions schemes. Where there are not independent trustees, workers are unlikely to see value for money in workplace pensions. Pensions of all types including contract schemes should be governed by independent trustees with an obligation to act in their best interests.

4. Soon many workers will be able to take out all their pensions in a lump sum (after paying a possible massive tax) but what will the guidance look like to stop people being ripped off and the likely take up by individuals is just not known.

Labour priorities are for value for money and to get this we also need to promote the scale of pension funds.  Larger pension schemes are more likely to delivery value for money.

In the Q&A I asked Greg would he agree that independent trusteeship of all pension schemes is also about re-establishing trust in the industry after decades of financial scandals.  People would save more if they were more confident that their money was being looked after by genuine beneficiaries trustees who will be acting on their behalf and making sure they are not being ripped off .

Greg thought that greater trusteeship would help establish checks and balances which is especially important since millions of people have been auto enrolled by the state and there is even a greater  responsibility to make sure the money is looked after properly.

Implications of Climate Change for Investment Returns and for Beneficiaries: AMNT Open Day

This is the first in series of posts on last weeks AMNT open meeting and AGM.

I was really pleased to see that there was a quite a few UNISON LGPS member nominated reps present.

The morning was a training session on the implications of Climate Change on Investment returns and for our Beneficiaries. Bearing in mind the very unusal weather we have been having this winter, this is a very topical subject.

Our meeting was opened by our Joint Chair Barry Parr who introduced Catherine Howarth. (see picture) who is a former pension trustee and the CEO of ShareAction (use to be called "Fair Pensions").

Catherine believes that Trust schemes have clear duties to take Climate Change seriously but with Contract schemes it is less clear legally but still a compelling reason to act.

She spoke about the Greenlight report launched recently with Pension Minister Steve Webb MP. There is a need to "nudge" pension schemes into managing the growing risk of climate change. There are a number of good schemes that are addressing this but many others who clearly "don't get it".

One sign of a good scheme is how well it communicates with its members.  Schemes needs to organise relevant training, look at governance policy development and carry out risk assessments. Need to look at low carbon investment opportunities and take into account that Auto-enrolment will bring in many young people into pension schemes, who will bear all the investment risk  of climate change in the coming decades.

Next was a speaker from PRI then climate change expert Meg Brown.

Auto-enrolment...the AMNT... and the Video

Why it makes complete sense to autoenrole into your Company Pension Scheme.

"Save Our Pensions" Community Conference 2013

This is my speech from the Community Conference on Saturday on motion 23 (see text here "Save Our Pensions"). Which is a motion from my branch.

"John Gray speaking on behalf of your Service Group Executive, in favour of this motion and moving this amendment which is intended to update the original motion in light of recent developments.

Conference, please thank Tony (Power - my branch chair) for his excellent speech. From someone who to my personal knowledge has a led a terrific battle to save his pension and that of his colleagues. What I would like to add to the debate here is that no one should be under any illusions about pensions.

The only hope for you and your members have of having a dignified retirement is a well funded and secure employer retirement plan.

You cannot rely on the state pension. The flawed Government plan for a new universal state pension will only provide at best an income just above the absolute poverty line

As a Housing estate officer in the East End of London, I have seen first hand pensioners living in poverty, buying second hand clothes, eating out of date food, huddled in front of the TV in a freezing cold room because they are too scared to turn the heating on. Stuck in this freezing home because they have no money for trips or holidays and shamed that they are too poor to treat their grandchildren.

That is your future, your member’s future if you do not have a decent secure pension from your work.

Pensions are an expensive business. There is an old rule of thumb in the pension’s world that in order to retire on half your pay and a lump sum, you need to save 15% of your pay for 40 years, repeat 15% for 40 years.

Hardly anyone in the best of times can put 15% of their salary in a pension, never mind the times we live in now. That is why your employer will need to put in at least 10% plus into your pension or else it is condemning its work force to retire and die in poverty.

Conference, please remind your employers this when you negotiate over auto-enrollment and ask them the question do they as a responsible employer want their workers to enjoy or endure retirement. Ask them to do the maths. It is quite simple to work what they need to save on your behalf. Are they responsible employers or are they rogue employers?

Yet, what we increasingly find in practice is the exact opposite. As already pointed out by London Housing Associations branch, some employers, who in the past, were good employers and provided access to good quality defined benefit schemes are using the nonsensical and irrational accounting measures as an excuse to close these schemes and replace them with insecure poverty pensions.

They are closing schemes even in the knowledge that there is - as the amendment points out, an urgent government inquiry taking place on ways to change the way we value schemes which could get reduce or even get rid of many deficits.

There is a unholy alliance of the CBI, TUC and National Association of Pension funds who support change. So why has East Thames and Notting Hill Housing associations closed their scheme in recent weeks? why have others such as Barnardos announced similar intentions? what role did the Pension Trust and the Social Housing Pension fund play in bankrupting the charity PeopleCan the organisation Joe mentioned in his speech earlier today?

While our members are in a whole variety of pension schemes, this is important since our UNISON e-survey late last year found that 35% of our members are in Defined Benefit (DB) guaranteed pension schemes

DB guaranteed pension schemes are NOT a thing of the past. UNISON recently won access to the Local Government Pensions Scheme for new starters at South Lakes Housing Association. Wrekin and Telford Housing are offering all staff the LGPS as well.

Due to the behaviour of some employers and pension providers we also should welcome the call in this motion for the wider Labour movement to look into whether, we the unions, should be involved in providing decent pensions provision, as they do in many other countries.

Conference, while we welcome the plans to smooth valuations and replace them with more accurate estimates it is important that the government accepts and implements these accounting changes without delay and that our employers who are disgracefully still rushing to destroy their employees future when they know this inquiry will report soon, should pause and stop.

Conference please support this amendment and the motion. Thank you. (update UNISONactive take on conference)

Workplace Pensions TV advert

Apparently it was on TV last night for the first time. I haven't seen it yet myself but its now on YouTube.

Auto-Enrolment into workplace pensions is the biggest thing to happen to pensions in decades. It's not perfect but a welcome start. As the advert says "the bosses" will indeed pay into your pension (whether they like it or not). So will you and so will the taxman.

Hat tip the one and only Mr Meech.

"Pensions, Pensions and more Pensions"

(This is an article I wrote last week for my Branch Stewards newsletter).

"Let’s face it. Many members probably consider Pensions to be a pretty boring issue and something that they would prefer to put off thinking about too much until another day (or preferably never). Well, whether you like it or not, in the coming months, all UNISON members and in fact nearly all employees will have to wake up and start thinking about pensions. 

For those of us in the Local Government Pension Scheme there is an ongoing consultation process at the moment by UNISON on a new look scheme. LGPS 2014 agreed last month with the unions, LGA employers and the Government. You will be balloted on the scheme at the end of the month. Have a look at what is being proposed on the UNISON website http://www.unison.org.uk/pensions/lgps.asp

While members in the Social Housing Pension Scheme (Pensions Trust) will need to be aware that their employers have been sent letters about the deficits in their pension schemes which is causing some employers to panic and start talking of closing the scheme or massive increase in contributions. There has also been some outrageous scaremongering by some financial “advisors” to schemes. UNISON is arranging an urgent meeting with the Pensions Trust. In the meanwhile if your employers start talking of any changes to your pension scheme please contact the branch immediately and ask your employer to send us copies of what is being proposed.

Remember – the current pension so-called “deficits” are valued in a completely discredited and inaccurate manner which even the current Pensions minster has recognised is wrong and needlessly “killing” good pensions schemes. Remember closing a pension scheme does not get rid of any deficit - in fact it can make things worse.

Finally, for those of you who are not in the LGPS or SHPS please be aware that “auto-rolling” is kicking in at the end of this year. Nearly all employees who are currently not in a pension scheme will be automatically enrolled into the employer’s scheme or a state scheme.

Now this is “good news” for those not in a scheme but what we are concerned about is that some employers who currently have decently funded defined contribution schemes (also known as DC, Group personal pensions, Group Stakeholders, money purchase etc) may be tempted to cut existing employer contributions, since they are worried about an increase in the pension bill from more people being in it.

We have to fight this as well. Pensions are expensive. Employer’s have to realise that unless they want their staff to retire in poverty they have to fund pensions properly.

Pensions are obviously not boring nor are they as complicated as you think. We need to have at least one UNISON Pension Champion (or rep) in every employer. If you are interested in being a “Pension Champion” let the branch office know and we will sort out some training for you on the role in the very near future".

John Gray
Branch secretary

Why you should join your company pension scheme NOW! (it's use it or lose it)

It's a no brainer actually (apologies to Homer Simpson whose scan in on right does show he has a brain although it is very small and rarely used e.g tax payers alliance supporter). There are millions and millions of workers in the UK who have access to a pension provided by their employer but they have not joined the scheme.

Sometimes it is because the scheme is pretty rubbish and that there are no real incentives given by the employer to encourage their staff to join. Yet often this is not the case and workers are losing vast amounts of money each year by not joining.

The 25% apparently eligible to join the Local Government Pension Scheme (LGPS) who haven't are losing at least 14% of their wages each year. They also even pay more income tax and national insurance.

However, the real people at risk from not joining their scheme NOW are in defined contribution (aka Group stakeholder or personal pensions) company schemes whose employers pay reasonable contributions if the members also pay something into it. Many of scheme are pretty good. Not as good as say the LGPS but nothing to turn your nose up upon. Decent employers know that any decent pension will cost a lot of money and they have to play their part in providing funding.

The risk ironically to these "decent" schemes is the introduction of pension autro enrolement next year. Enrolement is a "good" thing and will mean that nearly all workers in the UK for the first time will be automatically put into a pension scheme.  What is worrying some employers is that this may mean that the total bill for pensions will rise. If auto enrolling works (and there is some doubt) then instead of 25% of the workforce being in the company pension scheme this may rise to say 50% or more. Potentially doubling the pension payroll.

What many people fear is that some companies (including ones that use to provide non contributory final salary schemes free to all their employees in a more enlightened age) are planning to either slash and burn existing contribution rates or introduce 2nd tier pensions for employees who have not joined the existing scheme. We need to oppose all attempts to reduce contributions. The more in the scheme the more difficult it will be to cut it.

This is a call to arms to all union reps to "encourage" (we cannot give specific individual financial advice) our members to consider joining their scheme.  If they don't, it may not be around much longer. Use it or lose it.

TUC Trustee Conference 2011: Auto enrolement

Catch up from last month's TUC Pension Trustee conference "People & Profits".  I went to a useful workshop by the Pensions Regulator on "Auto-enrolment and workplace pensions reform - the role of trustees".

I don't think (in fact I am pretty certain) that many people realise that in a year or so, if they are not in a pension scheme, they will be compulsory enrolled into one. Employees, employers and the government will have to make minimum payments. Employees will have a month to come out. However, many think that due to inertia they will not "opt" out. This is good news on a number of levels. Currently 2/3rd of private sector employees receive no pension contribution whatsoever from their employers. While 50% of workers in the private sector have no pension provision at all. These workers face desperate poverty in their old age and taxpayers will have to pick up the bill for basic social security.

It's not all good news.  The contribution levels are very, very low. 3% employer, 4% employees and 1% tax relief. 8% of your income in pension contributions is no where near enough to get a decent pension.  The old pension adage use to be you that to get a pension of half pay and a lump sum you needed to have the equivalent of 20% of your income invested for 40 years. There are also a number of exemptions. But it is a start. 

There is also a legitimate fear that employers who currently pay more into pension schemes might level down.  Some people opposed the introduction of the national minimum wage for the same reason that it would depress wage rates but this didn't happen. I am more worried that employers who currently only have say 50% of employees in their scheme may cut back on contributions because the total bill will rise if 75% are now in (or introduce a two tier pension scheme for existing and new scheme members).  The Unions need to be wide awake about this risk. 

I also spoke at a recent UNISON Community Service Group Executive meeting and at last week's NEC about the organising opportunity that Auto-enrolment gives us.  The unions must be at the centre of all what is going on.  The greater the density and the organisation we can achieve - the better the final pension deal.

Of course for the public service pensions schemes, if members have to pay 50% more in  contributions (nearly 10% of their income) after years of pay cuts, as well as retire much later and get less, then existing members, never mind the new ones will simply walk.  They will leave the scheme in droves and the schemes will become unsubstainable and collapse. The Local Government Pension Scheme (LGPS) will turn from being cash positive to cash negative in a few years and all Council finances could be completely and utterly shot to pieces.

Eliminating Pensioner Poverty

This is a little bit teckie but it likely to be of even greater long term significance to real people, than the current fuss over the improvement to personal tax allowances for low and middle income Brits.

The EU has allowed the government to extend the scope of auto-enrolment into contract pension schemes as well as trust schemes. The government will amend the 2007 Pension bill to allow for auto-enrolment from 2012. It was previously thought that this compulsion was illegal under EU regulations. This alone will affect some 4.7 million employees.

Okay, what this means is that in 2012, the government can now introduce a nation wide auto-enrolment scheme for all employed workers. If someone works for a company that has its own pension scheme they will be automatically enrolled in that scheme. All other firms that do not offer a pension scheme will have to auto-enrol employees into a Government sponsored Pension Personal account. Employees can pull out of the scheme but every year they will be enrolled back into it again.

The above paragraph is possibly amongst the most boring I have ever written. Co-incidentally I was just distracted by a sketch on TV from the show “Smack the Pony” where 2 women fell asleep as soon as their accountant started talking about pensions and tax allowances.

Bear with me as I think this issue is important. For the first time potentially all workers will end up with a lifelong private and state pension scheme. As always there is lots to moan about for example: – it should be compulsory for all workers and self employed, the contributions paid by employers is too low, investment risk is not shared, carer pensions etc.

However, nowadays, even in companies with pucker Final Salary schemes, up to a third of employees are not members of the company pension scheme. Losing the equivalent of at least 10-15% of their wages each year.

A little while ago I helped a union member go through her pension options with a company which only offered a group personal pension plan. The company will pay into a pension if the employee also contributes. She was horrified how many £1,000’s she had lost out in company contributions by not taking out the pension sooner. She had never "got around" to setting it up. She would have far preferred being enrolled when she first joined the company. The industry has a saying that pensions are "sold not bought".

For the first time ever in the history of this country, with cross party support, we could be just about to introduce a sustainable arrangement for a national pension scheme that covers all workers. This could (fingers & toes crossed) eventually get rid of the rotten stench that poverty in old age, has for far too long, besmirched our country.