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Editor's View

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As chairman of the Treasury select committee, John McFall was charged with holding the previous Government, regulators and the industry to account.

As chairman of the Treasury select committee, John McFall was charged with holding the previous Government, regulators and the industry to account. Having stood down at the last general election, he has left his growling and often headline-grabbing Parliamentary performances behind and taken to the road to lead an independent inquiry into workplace retirement saving.

The Workplace Retirement Income Commission is being sponsored by the National Association of Pension Funds and was set up to help built evidence and policy suggestions to support the Government’s commitment to reinvigorate occupational pensions.

McFall will be travelling around the country, visiting universities and businesses large and small, to help inform the views of the commission which will deliver an interim report in the coming weeks before publishing its final recommendations in October.

The Government has moved quickly to make its mark in certain pension areas, for instance, commissioning John Hutton to look at public sector pensions, pushing ahead with Nest and auto-enrolment, reforming the annuitisation regime and examining early access.

However, at a recent speech in London, Association of Consulting Actuaries chairman Stuart Southall was right to observe the coalition has so far failed to deliver on its commitment to reinvigorate occupational savings.

Southall says the Government should consider proposals to encourage pension risk-sharing, a combination of DB and DC provision, a suggestion likely to be examined closely by McFall’s commission. The Department for Work and Pensions says it supports the review, although it has not committed any funding, and the commission’s findings are likely to be influential in developing Government policy.

It seems no Government pensions announcement can pass these days without a flurry of press releases from firms stating once more their full commitment to the open market option.

In this month’s issue, Partnership managing director Andrew Megson says such bland endorsements have become boring and add little to public policy debate. He suggests that with recent Government backing for the Omo the battle is close to being won and focus should turn to the role the industry must play in transforming consumer behaviour.

Ahead of this Summer’s Dilnot Commission report, Linstock consultant Tony Cox articulates why policy-makers must ensure any proposals around long-term care address the specific needs of the UK’s black and minority ethnic populations.

As ever, comments and suggestions for future issues should be sent to paul.mcmillan@centaur.co.uk.

Paul McMillan
Editor,
Retirement Strategy

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Readers' comments (1)

  • What the current government manifestly HASN'T done is anything at all to make retirement saving more attractive to ordinary Joe Public. Herding people into NEST en masse isn't a positive solution, given that the main reason most of them are likely not to un-enrol will be inertia. How about making the system more attractive so that people might actually want to participate? How about regulating (limiting) unsecured borrowing so that more people will actually have some spare funds available in the first place to set aside for their retirement? The pension system is a mess and all the current government is doing is making it worse. If the FSA were really on the side of the industry and the consumer, it would be making representations to the government to sort it out with genuine simplification. The FSA may well say that it isn't a lobby group, but it ought to be, if legislation is making its job more difficult and increasing the risk of consumers being given questionable advice. Clearly, its 10,000 page rule book doesn't really stack up in terms of Cost:Benefit (not that the FSA ever paid anything more than token lip service to the very notion of Cost:Benefit Analysis, as we've seen with the RDR).

    John McFall seems to be a decent and committed man, but the TSC he leaves behind has no power, so talk of holding anyone to account is somewhat hollow. Hector Sants has told the TSC that the FSA will reconsider its position of denying IFA's the protection of English Law in the form of the longstop against stale complaints. I for one would bet good money that when he does so, all he'll say is that the FSA has reconsidered and sees no good reason to change. Great. The problem is lack of accountability and the TSC has no real power to hold anyone to account.

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