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Altmann criticises 'short-term' policy as UK pensions minister named

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The UK government has named a new pensions minister following Ros Altmann’s departure in the wake of David Cameron’s resignation as prime minister.

Altmann, who was named a peer and joined the House of Lords to take up the role last year, left government days after Cameron’s successor, Theresa May, was sworn in.

Altmann is to be succeeded by Richard Harrington, an MP who first entered Parliament in 2010.

In her resignation letter to May, Altmann said she had been “honoured and grateful” to have served in government but was critical of the government’s own track record in pushing through pension reform.

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“As a minister,” Altmann writes, “I have tried to drive positive long-term changes on pensions from within government and ameliorate some of the past mistakes I have cautioned against.

“Unfortunately, over the past year, short-term political considerations, exacerbated by the EU referendum, have inhibited good policy-making.”

She urged her successor to reform pension tax relief, continue to focus on the rollout of auto-enrolment and better communicate on changes to the state pension – a topic that has seen the Department for Work and Pensions criticised for failing to clarify how changes to the state pension would impact women.

She also urged reform to defined benefit (DB) regulation, suggesting that, without change, deficit-reduction payments would see companies focus resources on a single group of employees – those with guaranteed benefits in DB funds.

“Given the risks of diverting corporate resources to one favoured group of workers, [and] the need to ensure adequate resources for younger generations’ pensions,” she says in her letter to the new prime minister, “the time is right to properly consider the issues facing employers trying to support defined benefit pension schemes and potential use of pension assets to boost economic growth.”

IPE understands Altmann is likely to sit on the Conservative benches within the House of Lords.

The announcement of Altmann’s departure from government on Friday initially gave the impression she would be replaced by Penny Mordaunt, until last week a junior minister within the Ministry of Defence.

However, Harrington has since been confirmed as Altmann’s successor.

Elected to the House of Commons in 2010, Harrington was until last week a junior minister responsible for the housing of Syrian refugees, with his responsibilities spanning the Home Office, and both the international development and communities departments.

He has only discussed pension regulation a handful of times in speeches to the House of Commons, and has voted with the previous government on the pension matters passed during his six years in Parliament.

His naming as parliamentary under-secretary sees the pensions brief downgraded when compared with Altmann and her predecessor, Steve Webb, who both were ministers of state.

Altmann’s tenure as pensions minister has seen her focus heavily on the rollout of auto-enrolment to the detriment of the defined ambition (DA) reforms championed by Webb.

She said pausing the DA reforms was “strategic and tactical” and enjoyed one of her biggest successes when she won support for stricter regulation of master trusts

For more on Ros Altmann, read IPE’s interview with the former minister, published in June

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