Pension options are still open on Nest review
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Webb: ‘Full perspective’
The Government has made it clear that all options are up for grabs for pension reform as it launches a three-month review of auto-enrolment and the national employment savings trust.
Speaking at a stakeholder and press briefing in Westminster last week, Work and Pensions Secretary Iain Duncan Smith and pensions minister Steve Webb insisted they were committed to auto-enrolment, although they said an independent review was necessary to determine how to make it work.
But when questioned by Money Marketing, Webb refused to rule out further delays to auto-enrolment timescales or fundamental changes to the Nest scheme.
He said: “The timescale for the review is specifically quick. In the previous Government’s signing of the contract for the administration of Nest, there was a break built in available to us in the autumn. What we want to do is either carry on full pelt and go for it, if that is what the review recommends or if the review recommends changes, to get on with them.
“We regard getting people into workplace pension schemes as something we want to get on with, we do not want to bring further delay, which is why the review is three months.
“But we want to make auto-enrolment work, if Nest is the best way to do it, then that is what will happen, if the review team comes back and says we should change it, then we will change it.”
The Government has formed a review team which will report at the end of September. The team comprises Paul Johnson of the Institute for Fiscal Studies, Legal & General’s Adrian Boulding and EEF head of employment policy David Yeandle.
The review will look at how different types of employees and employers will be covered by auto-enrolment as well as how quickly any reforms will tackle pensioner poverty.
Webb said there would not be a consultation on the panel’s findings as the review itself will be a consultative process.
He added: “We want to make sure auto-enrolment is a policy and an infrastructure that will stay in place for decades, so spending a few months over the summer making sure we have got it right is time well spent.
“We have chosen our team because of their expertise but they are also going to go out and talk to people so we are getting the full perspective of everybody who has a stake in this important decision.
“We have asked the review team to find the best way to increase private pension saving to get the best balance between the cost and benefits for individuals and employers.
“It may be that they come back and say the policy we inherited is fit for purpose or advise that changes need to be made. Either way, we will listen and we will act.”
Consumer groups have slammed the Government or failing to include a trade union or consumer voice in its review team.
Which? head of economic advocacy Doug Taylor says: “I would hope there is a clear commitment in the terms of reference and indeed from the panel to ensure the issues of consumers are very high in the considerations at this point.”
Trades Union Congress general secretary Brendan Barber said: “It is disappointing that the review team includes no union or other consumer voice and, while distinguished, appears to have little experience of pension issues for women and lower-paid workers.”
Personal Accounts Delivery Authority chief executive Tim Jones said Pada would push ahead with building Nest despite the review. He said: “It is absolutely right that a new Government should take stock of the policy on pension reform and how that is being delivered. We look forward to having the opportunity to support ministers and the independent reviewers however we can.
“In the meantime, we will continue to get on with our work to build Nest to ensure all options continue to be available to the Government at the conclusion of the review.”
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