UK Government Consultations on Pensions
12 September 2023
On 10 July 2023, the Chancellor set out in a speech at Mansion House the Government’s proposals to promote investment in productive finance – that is investment aimed at building longer-term infrastructure and new technologies.
Accompanying the Chancellor’s announcement were a raft of proposals to support pensions savings, including:
- enabling access to private markets;
- further work to consolidate small pots;
- the introduction of a new value for members framework; and
- exploring new options for Defined Benefit schemes.
Of the 10 consultations and calls for evidence, ZEDRA’s Governance team provided input on three key areas as follows:
Options for Defined Benefit Schemes
‘Options for Defined Benefit Schemes’ focused on how DB schemes might support the productive finance agenda. As trustees, we see this as an important evolution of the DB pensions landscape and are very interested in solutions that can deliver better outcomes for pension scheme members.
However, we believe that changes to incentivise DB schemes to invest in Productive Finance may not favour UK investment.
For this reason, our response focussed on a possible solution that provides security of members’ benefits, enables scheme sponsors to step away from the pension scheme, allows consolidation of smaller pension schemes and facilitates an approach to productive finance agenda that over time would delivers a national wealth fund focused on further boosting the Productive Finance agenda. For more information, contact Douglas Hogg.
Pension Trustee Skills, Capability & Culture
Our approach to the Call for Evidence on ‘Pension Trustee Skills, Capability & Culture’ was to feed in through our industry body, the Association of Professional Pension Trustees (APPT) who submitted the industries’ view on how to improve trustees’ capabilities across the board and remove barriers to trustees doing their job in a way which is effective and results in the best outcomes for savers.
The APPT was instrumental in defining the standard for professional pension trustee accreditation and has recently published their review of the accreditation of professional trustees process. In their response to the Call for Evidence the APPT calls for updates to the trustee toolkit and supports the mandatory accreditation of professional trustees, whilst cautioning against further onerous requirements being placed on lay trustees that could backfire. Anyone interested in this topic should contact Anne Sander or Alison Bostock for more details.
Helping Savers Understand Their Pension Choices
ZEDRA Governance’s response to ‘Helping Savers understand their Pension Choices’ stressed that members need more support through the retirement process and the current situation needs to be evolved as a matter of urgency for retirement savers to have better prospects of maximising their retirement outcomes. We stressed the importance of the main master trusts in developing better retirement options and that trustee governance should play a key role in developing and selecting the right defaults and options without the need for over-prescriptive legislation, which can act to stifle innovation. Contact Mark Stopard for more details for those interested in this topic.
Whilst it has been a busy time considering and responding to the Government’s proposals, this reflects ZEDRA’s commitment to help provide better security and outcomes for pension savers and willingness to participate in influencing Government policy to this end.
To discuss any aspect of the recent UK Government’s Call for Evidence on Pensions, or for any other aspect of pensions or professional trusteeship, please contact any of the team below.