Kalpana Shah, President of the Institute and Faculty of Actuaries (IFoA) said: “Six years on from Sir John Kingman’s independent review of the Financial Reporting Council (FRC), the inclusion of a Draft Audit Reform and Corporate Governance Bill in today’s King’s Speech is an important development for the future of actuarial regulation. We await its publication with interest to see how the regulatory framework for actuaries will be affected, as well as the proposed legislative timetable. We welcome the opportunity to help shape a clear, sustainable and proportionate regulatory framework which serves the public interest and we look forward to continuing to work closely with the FRC to this end.”
Paul Leandro, Partner at Barnett Waddingham commented: "We welcome the new Pensions Scheme Bill announced in the King’s Speech today, particularly the increased focus on pension schemes to offer retirement income products or a range of products. Since the full freedoms were introduced in 2015, the retiring and retired populations have been underserved. This is a positive step towards addressing that gap.
“However, the industry shouldn’t just fixate on building new products. Investment is needed into how the options are communicated to people. Retirement products are essentially pointless if people are not informed about them or engaged with them. Supporting people in how to make choices now and on their retirement journey is crucial.
“The elephant in the room is the inadequacy of current DC contribution levels. The new bill is silent on this. This is disappointing as it’s clear people are not saving enough for retirement, and even with new initiatives around consolidation and value for money, people will still be left with inadequate pension pots unless they save more during their working lives. This is exacerbated by gender and ethnicity gaps, which frustrating do not seem to be covered in the bill and which is a significant concern in the current pension landscape.”
Liam Mayne, Partner at Barnett Waddingham commented: “From the Pension Schemes Bill announced today in the King’s Speech, it is clear that the new government’s agenda will take time to unfold. The bill’s potential to boost UK investment and drive economic growth is promising, but we must remember that the ultimate impact on pensions will depend on investment performance.
“The focus should remain on ensuring good retirement outcomes for members, particularly when considering investments in areas such as private equity, which carry significant costs and risks.
“We had anticipated a full review of the UK’s pensions landscape based on Labour’s pre-election discourse, so the inclusion of a Pensions Bill was unexpected. However, this could be a sign of a swift move towards improving saver outcomes and diversifying investment options.
“The urgency to address the issue of small pots is welcome, and the introduction of measures to transform savings pots into pensions is a step in the right direction.”
Kevin Hollister, Founder of Guiide & Guiide DB: "As a result of the King's Speech, it seems defined contribution pension scheme members reaching retirement will be more supported. They will no longer be left to deal with the complexities of taking income from their pension pots at retirement alone. If they are unable to make a decision given their options, a default decumulation option will be put in place.
Given that taking a full cash lump sum, or buying a guaranteed income for life (annuity) are irreversible decisions, it seems highly likely that the default will be staying within a pension wrapper and accessing income as needed, essentially a form of drawdown.
This will mean schemes not currently offering drawdown will need to provide a solution through their own scheme, or a default decumulation provider partner or panel to offer this.
At Guiide we welcome this step. Since the pension freedoms we have been highlighting that members must be given choice and education at retirement, alongside longer term ongoing planning tools to get the best outcome over their whole retirement period.
Decisions made at the point of retirement are key to this. We hope this is the first step in schemes providing this much needed support to members."
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