Four pensions professionals set out what they’d do if they had the job for a day

What would you do if you were pensions minister for a day?

Adrian Boulding, chairman of the Pension Quality Mark; Carol Young, head of group pensions at RBS; Lawrence Churchill, chairman of NEST and Nicola Smith, head of economic and social affairs at the TUC, debated their wishes and desires in pensions reform at last week’s National Association of Pension Funds conference.

Adrian Boulding, PQM

Employees without sufficient education on their choices are like ‘rabbits in the headlights’ in a post-Budget world, according to Boulding. He called for minimum standards for schemes regarding help and support for members in three particular areas:

1) Communications – must be clear and well-timed in the working life of employees

2) Access – schemes can choose how they create access for members, providing it creates a seamless pathway

3) Either test members’ understanding to ensure they have got to grips with the communications or choose a default standard for everything that can be opted in or out of.

Lawrence Churchill, NEST

Churchill’s starting point was that the state pension keeps people out of poverty, but isn’t enough: the state pension is £7,000 a year, but the average employee needs at least £20,000 for a comfortable retirement.

To secure this decent retirement income, he proposed a minimum increase on auto-enrolment contributions of 1% a year, to hit 12% in 2020, and as an added incentive to employers, to halve their national insurance contributions on pension contributions – as well as no longer paying NICs on their workforce after the state pension age.

Finally, he argued that there are currently inconsistencies in limits and security, and proposed a Saving Security Commission to safeguard this – as well as looking at the possibility of Pension Protection Fund for DC.

Nicola Smith, TUC

Smith promised “a clear commitment to building on the success of auto-enrolment” to give people even more security, and discussed the challenge of aiding the low earners who are below the personal allowance threshold, saying this should be lowered to £5,000.

She also demanded “radical moves” to reduce concerns around governance, to ensure that schemes prioritise the best interests of their customers.

Smith also said that the best chance for a secure retirement would come through higher contribution rates –  and proposed to start discussions with schemes and employers to set realistic long-term goals for contributions.

Carol Young, RBS

Young argued for taking party politics out of pensions suggesting that too often, radical policies are pushed through to suit a party agenda, rather than with a real view of the long-term consequences.

She said immediate interests can override long-term goals and that there is a need to distinguish between good policies and fledgling ideas.

Young proposed establishing an independent commission to deal with the unintended consequences caused by new policies, headed by the NAPF.

The verdict

Carol Young’s proposal won the day, suggesting that the audience of pensions professionals are sympathetic to the idea of an independent pensions commission (The relationship between pensions and politics was much discussed at the NAPF; see “Segars calls for pensions and politics to be separated” and “Webb vows to press ahead with industry reforms despite industry fatigue”.)

However, a hat-tip should also go to Lawrence Churchill, who took the Liverpool location to heart and conveyed his pensions policy ideas through Beatles lyrics.