UK - The time has come to remove politics from pensions in the UK, said Watson Wyatt’s Stephen Yeo, former pensions policy adviser to the opposition Conservative Party.
Speaking at an event in London yesterday, Yeo suggested setting up a high-powered, permanent, non-political Westminster-based committee with responsibility for considering and recommending UK policy on pensions.
This would include Treasury and other civil servants, consultants, insurers as well as those from the pensions industry. But politicians would still retain basic control of state expenditure on pensions and similar issues.
“There was an excellent precedent in the way the Bank of England Monetary Policy Committee works,” he said. Other countries in the world have politics more removed from pensions, such as Sweden when state pension age is set externally.
There are signs of steps in this direction, he said, pointing to the Pensions Commission. “This is a fairly apolitical body and we reckon it will do a good job.”
Yeo, who is now a senior consultant with Watson Wyatt in the UK, was speaking at a roundtable organised by the firm, setting out a number of concepts as to how the pensions debate in the UK could go forward.
He added that in the current political climate, the Conservative opposition would not put this proposal forward, as they see that the government is making such a mess of pensions that they would lose electoral advantage. “As we won’t be able to get them to put this idea across first, we are doing it.”
Commenting on current developments he said: “Now we have the pensions bill criticised from all sides, but this disguises the bigger changes made the year before the bill, relating to scheme wind-up, which is going to change the occupational pension scene in a way that most people have not realised yet.”