Nigel Peaple, Director Policy & Advocacy, PLSA, said: “Earlier this summer, the Government set out very ambitious plans for a wide range of reforms on pensions. These covered both DB and DC pensions, accumulation and decumulation, the consolidation of pension funds and the quality of those managing and advising them. Some of these changes require primary legislation, a Pensions Bill, but others can be driven forward by secondary legislation or guidance.
“While the absence of a Pensions Bill in the King’s Speech does mean we won’t have a statutory basis for some of these initiatives, for example, support for savers at retirement, DB Superfunds, and Small Pots, we do expect Government and regulators to continue to pursue these objectives through guidance and standard setting. Indeed, some of the recent speeches by the CEO of the Pensions Regulator on consolidation and value for money make this very clear. Moreover, following the Government’s support for a Private Members Bill in the last session, we expect the Minister for Pensions to shortly propose secondary legislation to increase automatic enrolment contributions by introducing saving from the first pound of earnings and from age 18 instead of 22.
“Although it is disappointing that the Government did not include a Pensions Bill in today’s announcements, its absence will mean more time can be allocated to ensuring any reforms are well designed after in-depth consultation with the pensions sector. The PLSA looks forward to feeding into such work as it arises.
“Finally, we still believe it very likely that the Government soon will take more action on pensions, this time in the context of UK growth, at the forthcoming Autumn Statement. The PLSA recently proposed six necessary policy and regulatory reforms aimed at providing support to pension funds that wish to invest more in UK growth assets.”
PMI President Robert Wakefield said: “We are aware that there is likely to be little time to enact new legislation before the next election, but there are a number of issues that remain unresolved, and the absence of a Pensions Bill means that we that is no prospect of addressing these issues soon.
“Perhaps the most pressing unresolved issue at this time is the problem of finding an effective mechanism for the consolidation of small Defined Benefit (DB) pension schemes.
“We were delighted to learn that Clara has finally completed its first deal and will take over the Sears scheme. However, it still remains unclear as to how public sector schemes might be consolidated. Speculation that the Pension Protection Fund (PPF) might be used as a consolidator remains unaddressed, and this is now unlikely to be resolved for at least another twelve months.”
David Brooks, Head of Policy at leading independent consultancy Broadstone, said: “Pedicabs beat pensions in the first King’s Speech in over 70 years with no mention of the Mansion House reforms or other much-rumoured pensions legislation.
“With the Autumn Statement on the horizon, focus now shifts to Jeremy Hunt’s announcement in a couple of weeks to see how the sprawling package of reforms will proceed. With rumours around Defined Benefit surpluses beginning to emerge as well as the existing raft of policy changes mooted on investment, consolidators, superfunds and small pots it would be peculiar if pensions were ignored again come November 22.”
Steven Cameron, Pensions Director at Aegon said: “We’re disappointed that the Government didn’t include a Pensions Bill in today’s King’s Speech. This is likely to be the last parliamentary session before the General Election, and the current Government has been consulting on a long list of initiatives. In the absence of a Pensions Bill, other routes will need to be found to advance these.
“All eyes will now be on the Chancellor’s Autumn Statement. In July, the Chancellor set out his ambitions for defined contribution pension schemes to increase their investment in private equity, with a view to boosting the UK economy. The Government has been consulting on a raft of ideas to encourage such investment.
“The initiatives include a new value for money framework for defined contribution pensions which will shift the focus away from minimising costs to maximising value for members, including through seeking out new investment opportunities. Those schemes which can’t meet the new test will be expected to wind up and consolidate into a larger scheme, which is then more likely to invest in private assets. There are also plans for extending a new form of Collective Defined Contribution pension which is likely to have longer investment time horizons, making private asset investments more likely. There have also been consultations on plans to solve the issues with multiple small deferred pension pots and to open up a wider range of ‘at retirement’ choices to members of trust-based schemes.”
“While there’s no Pensions Bill to take these forward, we believe they remain Government priorities and await clarity on next steps. We encourage the Government to prioritise those initiatives with the greatest potential to boost retirement outcomes of individual members.”
Becky O'Connor, Director of Public Affairs at PensionBee comments: “The omission of the Pension Reform Bill in today’s King’s Speech implies that Chancellor Hunt’s Mansion House proposals might set the direction of travel, but lack a substantial commitment to how these changes will be made in reality.
Following the upcoming general election, the incoming government will encounter a myriad of crucial decisions, where neglecting attention to pensions poses the danger of leaving pivotal reform issues unaddressed, perpetuating a stage of limbo in pension policies."
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