UK/EUROPE – Peter Thompson, the incoming chairman of the UK National Association of Pension Funds (NAPF) has warned today’s annual conference in Birmingham (May 18) that one of the principal difficulties lying ahead for the UK pensions industry is to ensure that freedom of investment is not eroded as part of a ‘Euro-integration process’.
In his inaugural speech as NAPF chairman, Thompson said that Europe, alongside developments on the minimum funding requirement (MFR) and the recently published Myners Report, would be one of the: ”major and highly significant issues which will occupy a good deal of our attention in the coming months and years.”
Thompson added: “ We can give a general welcome to developments in the areas of pension taxation, freedom of investment, and the unfortunately named IORPs (Institutions for Occupational Retirement Provision).
“ Our principle difficulty, it seems to me, lies in ensuring that those freedoms which I have already touched upon are not eroded as part of a Euro-integration process.”
However, Thompson reserved the bulk of his speech to comment on what he termed the longevity revolution, and the lengthening of retired life while the working life seems to stay the same.
It is not, however, as simple as just raising the state pension age, he argued: “What is needed is a fundamental review of what we mean by ‘retirement’ and what we mean by ‘work,’ in an era when flexible working, and working from home and on the move, are likely to become more commonplace.”
A debate on the longevity revolution needs to start now, he said, and that the association will take a full and active part in it. “It demands an acceptance by all of us, and by the government and its agencies, of a blurring of the edges between paid employment and other forms of work, such as caring, and of the need to adapt and modify our present systems and approaches to reflect the changing workplace,” he added.
In his speech, Thompson also touched on the restructuring of NAPF, saying it was the most thorough review of its constitution since the association was constituted as a company. The main reform of the company was to outsource the operational side and split its council into two, but leaving its non-executive board untouched.
“Essentially, now we have two equal councils, each elected directly by the membership of the NAPF, which will deal with policy matters in the areas of benefits and investment. The operational side of the NAPF’s activities will be run by a subsidiary company, NAPF Services Ltd, whose board will consist of a mixture of executives and non-executives, with the latter being in the majority,” said Thompson.