Schemes, insurers and unions call for independent pensions commission
The UK should create a permanent independent commission to create a long-term view of the pensions system and help build consensus around government policy and scrutiny over its delivery, a report has said.
The report, published by the National Association of Pension Funds (NAPF), said the commission was not about taking decisions away from politicians but moving away from short-term opportunistic decision making.
The call for an independent commission has been made many times; however, the new report has received backing from a wide spectrum of organisations the Association of British Insures (ABI), the Trades Union Congress (TUC), the Federation of Small Businesses, pension schemes and providers and the International Longevity Centre (ILC).
Joanne Segars, chief executive of the NAPF, said the industry needed collectivism to agree on definitions for “good retirement outcomes”, ensuring savers reached targets and deciding what role pensions play and how much intervention into people’s decision making should be made.
“We need to relentlessly pursue that vision,” Segars said.
“We need to advocate policies that take us toward that vision and challenge those that distract us.
“[A commission] would create that long-term view of the retirement savings system, build consensus around it and hold the government to account for delivering it.
“[It] will help to ensure we can put the long-term interests of savers, not the short-term interests of politicians, at the heart of pensions policy.”
The NAPF said its envisaged commission would be a “small group” with expertise to represent the interests of savers, employers, the industry and the wider economy.
It would undertake detailed research and report to the government and Parliament annually, providing an assessment of the market with recommendations for change where necessary.
The independent Turner Commission first suggested the policy of auto-enrolment after being set up in 2002 by the then Labour government.
The NAPF, which is calling for a permanent commission, said Turner’s success was built on shared policy building and vision on what needed to change.
“[The Turner Commission’s] process of decision making – thoughtful, evidence-based and inclusive – laid the foundations for a consensus that has delivered one of the most far-reaching public policy interventions in recent decades,” Segars said.
In March, the Parliamentary body charged with scrutinising pensions policy called for a new commission to review several aspects of policy, including changes to the defined contribution (DC) market and auto-enrolment.
However, it fell short of calling for a permanent stature.
Outgoing pensions minister Steve Webb has admitted the structure of government was ill-suited for pensions policy but outlined a wider idea of creating a new government department focused on pensions and the ageing society.
Webb faces re-election as a Liberal Democrat MP on 7 May with the outcome of whether he will remain in his seat, or his party in government, difficult to call.
At an event in March hosted by the Society of Pensions Professionals, Webb said he disagreed with the notion an independent commission could remove “the politics from pensions”.
While praising the work of the Turner Commission, Webb said removing politics from pensions was unattainable given the sensitivities around pensions policy and retirement ages.
Any independent commission would only provide recommendations to government departments, leaving MPs to agree or disagree with implementation.
Last year, the Danish government said the country’s pension system needed to be analysed and was considering the creation of a pensions commission to look at tax and insufficient coverage.