National Association of Pension Funds (NAPF) chief executive, Joanne Segars, has called for an independent retirement savings commission to create more stability over pension planning in the long term.
“The commission would be charged with creating a long-term view of the retirement savings system, and would hold the government to account for delivering it. We have seen this kind of brave depoliticising elsewhere – the Bank of England’s MPC, the Low Pay Commission and the Office for Budget Responsibility. It’s time for politicians to be brave when it comes to pensions and set up a commission.”
Segars also said that there should be a re-think of the regulation of trust-based schemes after the regulator found highly-variable governance standards at schemes. Rather than trying to micro-manage trustees’ activities, Segars said that the regulator should look at trustees themselves more, with lighter regulation of their activities.
A third area requiring attention, Segars said, is the supply of inflation-linked assets to closed DB schemes. At present, these schemes hold £1 trillion in assets, against a supply of £404 billion in inflation-linked bonds. As well as the Debt Management Office looking at this issue, Segars said a new minister for infrastructure should help unlock large-scale pension fund investment in national infrastructure.
Finally, Segars questioned the “freedom from annuitisation” approach of the government, saying most people do not want to use their pension contribution to avoid tax or to bet on their own longevity. “Most people – a whopping 82% in our recent research – want their pension to be a pension, and to provide a secure income that lasts for the whole of their retirement.”