The DWP are set to focus on a number of key issues for UK pensions policy in the coming months, reports Jenna Gadhavi
“Never say never” is the verdict of David Bateman, policy manager at the Department for Work and Pensions on whether defined ambition could be back on the table in future.
Speaking at the Westminster Employment Forum, Bateman suggested the project could be re-started once other changes have bedded in, and outlined a few more key issues for UK pensions policy.
The government first announced plans for defined ambition as a ‘halfway house’ between DB and DC schemes back in 2013 when Steve Webb was pensions minister. These plans were later shelved by Baroness Altmann in 2015, who felt that the industry had enough to contend with, following the shake up to the DC system announced in the 2014 Budget.
“Never say never”
Altmann said at the time: “The time is not right to ask the pensions industry to absorb the new swathe of regulation that would be needed to make such further reforms work effectively.” The government did however, say that the abandoned policy areas will be “revisited” once the industry has adjusted to the current reforms that are underway.
Webb was always a keen advocate though, and will be pleased to hear that his pet project has not been forgotten.
Confidence is key
The DWP policy manager said that there was an increasing expectation across pensions policy that people should be able to understand their pensions better. Because of this, DWP is currently working hard on the issue of costs and charges. Many in the industry have commented on the lack of transparency surrounding costs, so it’s great to hear that the DWP are looking to address this.
He went on to say however, that an emerging issue with promoting greater transparency is that there will then be a big push for the pensions industry to “do more with less”. Members will want lower costs and better returns – yet another challenge for the industry to tackle in the future.
Bateman talked of the fine line between transparency and ‘information overload’, and said that there was a danger that giving people too much transparency could further complicate an already complex subject for many.
Next phase of AE
Bateman also spoke about the next phase of the auto-enrolment programme, saying that although the first phase was a resounding success, engaging with far more small employers in the coming months, and ensuring members stayed auto-enrolled despite increasing contribution rates may prove to be more challenging.
It looks like the DWP will be keeping busy.