Commenting on his election, Patrick Bloomfield, said: “I’m grateful to my fellow actuaries for electing me Chair of the Association. Actuaries have a tremendously valuable contribution to make for UK society: making sense of COVID-19’s impact on life expectancy and rebuilding financial plans through the economic recovery ahead. I’m eager to contribute the voice and expertise of actuaries to the UK’s policy response.”
Outlining the policy priorities for the ACA during his two-year term as chair, he added: “The ACA’s single goal is for the UK’s policy response to COVID-19 is to help deliver an intergenerationally coherent UK saving strategy for our society. “The four components which are vital to achieve this are:
Adequate savings: COVID-19 has laid bare successive Government’s policy inaction for later life social care costs. Later life social care is inextricably intertwined with pensions. Individuals need to understand the costs of a good retirement and how to plan for it financially. Failing to do so will lead to higher taxes for future generations and miserable later life living standards for many.
Workers will need help balancing today’s livings costs and saving for their futures. The next steps outlined in the Government’s Auto-Enrolment Review need to be acted upon, gradually increasing pension savings rates. The Pensions Dashboard must also be delivered, making savings information accessible for today’s digital society. Neither individuals nor society can afford mass pension opt-outs or falls in savings rates.
Taxation and products: The economic recovery from COVID-19 will resurface old questions on pension taxation. The ACA’s message is simple: we need a simple, intergenerationally fair tax system. Failure to save today leads to costs for future generations, so short-term cuts to tax incentives to save help nobody.
Government needs to simplify our outrageously complex pensions tax system. This simplification should embrace short term saving - so called ‘rainy day’ savings - as well as long term saving for pensions. Helping younger workers onto the property ladder and helping older property owners release equity must be part of an intergenerationally coherent UK saving strategy.
Balancing costs between current workers’ and previous workers’ pensions: The Pensions Regulator’s new code of practice for funding Defined Benefit (DB) schemes must go ahead. It must deliver simplicity for small schemes and flexibility for large schemes with strong sponsors. Most importantly, it needs to balance costs of funding pensions with businesses recovering from COVID-19. If DB costs are too high, the first thing to suffer will be the amount employers can save for today’s workers’ pensions.
How the economic recovery from COVID-19 will take shape is far from certain. We encourage TPR to deliver a new DB funding code that has room to evolve as circumstances require. Actuaries acknowledge that DB scheme funding should gradually improve as scheme members retire. Meeting this cost too quickly will lead to systemic risks today. Meeting this cost too slowly will lead to systemic risks tomorrow. Maintaining balance has to be our collective goal.
Tacking climate risk, through the way savings are invested: Climate risk is an existential threat to us all. The reduction in pollution from the COVID-19 lock-down has shown the scale of what is needed to deliver the Paris Climate Accord.
Actuaries have a unique role to play, as professionals specialising in long-term risk, with oversight of trillions of pounds of long-term savings. We will be actively working to make climate risks transparent, enabling investors to save in the socially responsible ways they want to. We will work with Government to encourage policies that align economic recovery with a green future.”
Patrick Bloomfield added: “Without doubt the UK faces challenges, the scale of which we have not seen for generations. Fortunately, UK savings policy has undergone an evolution in recent years. The ACA will help maintain this momentum and assist Government to deliver an intergenerationally coherent UK savings strategy. We see a future where all members of society can save for their futures easily, digitally and in environmentally conscientious ways.”
At the ACA's recent AGM, Steven Taylor (LCP) was elected Honorary Secretary and Stewart Hastie (Isio) was elected Honorary Treasurer. Jenny Condron (Mercer) remains on the ACA Main Committee as Immediate Past Chair. The other Main Committee Members elected for 2020-21 are: James Auty (Mercer); James Beardmore (Hughes Price Walker); Gareth Boyd (Willis Towers Watson); Chintan Gandhi (Aon); Richard Gibson (Barnett Waddingham); Julian Hough (XPS Pensions Group); Vishal Makkar (Buck); Graham Newman (Capita) and Roslyn Williams (PwC).
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