Unedifying spectacle

The perpetual revolution of pension policy making looks set to continue this year, with the government’s response to the Pensions Commission due in the spring.

Blair wants reform, Brown wants debate

In 2006 the government will respond to the Pensions Commission proposals and consult on its own reforms alongside Turner’s. The prime minister seems to want to implement reforms quickly, but the chancellor merely wants to keep debating the issue. 

Remove disincentives to saving

The Society of Pension Consultants’ (SPC’s) prime concern is that the attempt to provide for the 8.3 million people without any pension savings, will result in existing voluntary occupational provision being undermined. The SPC would like to see new incentives to revitalise occupational provision, or at least existing disincentives removed.

NPSS challenge

I would be very surprised if the government accepts the National Pension Savings Scheme recommendation as it stands, and I hope that the private sector will be allowed to take up the challenge and the opportunity to make pensions work at a cost not dissimilar to 0.3%.

Stop the talking and start batting for the UK

We seem to have been debating pensions for years. Each new secretary of state has called for debate to lead to consensus, but 2006 will be the year the talk has to stop and policy has to be proposed. 

The industry already has the infrastructure

— Morrison: no need to reinvent the wheel

‘Son of Stakeholder’ rears its head. We’ve heard this before – a simplified pension scheme for all employees with a focus on cost (0.3% rather than 1%) and default funds.

The only way to increase efficiency

Technology is nothing new in the pensions arena anymore and admin is as old as the hills, but there is one thing they have in common – this industry has found it very difficult to execute either of them competently.

TPAS will look offshore to reduce costs

Outsourcing administration is almost the norm now, with in-house teams tending to be the largest schemes. Simplification projects will dominate the early part of the year and administration resource is expected to be scarce as people realise that they will not be able to cope without extra pairs of hands.

Platforms build on success

Despite the large investments and accrued losses, the evidence of platform success is building. Funds under administration growth on platforms is running at about 60% a year, they continue to make life easier for advisers and they are closing in on their breakeven points.

Focus shifts to members

There will be more focus on members in the future, as until now, the industry has been set up to work as business-to-business, but increased responsibility from simplification means that members are requesting more information on behalf of themselves or in some cases, their independent financial advisers (IFAs).

E-business will reduce costs

— Curran: Consolidation must be on the cards

The new pension regime from April 2006 will require technology to drive the advice process more efficiently. Financial modelling tools will be vital to ensure clients understand their pension position before and after A-day.

Web-based solutions to save the day

During the next year a key focus for pensions managers and administrators will be simplification. In parallel, many pensions departments will be implementing web-based solutions to help improve member awareness and knowledge of their pension arrangements and investment strategies – particularly important for defined contribution scheme members.

Admin lynchpin to scheme health

The trouble with pensions is that it is swamped with regulation. When that regulation is altered, as we are going to see with simplification, there is change, and a good deal of it.

Technology makes simplification easier

The biggest issue facing pensions software suppliers in 2005 will continue to be simplification. Proactive suppliers will help minimise its impact and well-designed software will cut through the complexities, making any necessary changes simple to implement.

Proposed legislation creates change for administrators

The appointment of an administrator should be all about making life easier for clients and their staff. 2005 onwards brings enormous challenges for administrators and clients. New legislation planned, and the requirement for administrators to be authorised by the FSA, has created change at an unprecedented rate.