All of which means we have two new people leading pensions – Yvette Cooper, the new Secretary of State, and Angela Eagle, the new pensions minister.
When considering whether these changes will have any long-term effect on the progress of pensions, we need also to look at what has not changed. Bill McKenzie, lead for the Department for Work and Pensions in the House of Lords, remains in his post. Over recent months, Lord McKenzie has been central to the development of the pension agenda. He has taken an interest in such diverse subjects as yearly illustrations, section 75 and qualifying schemes, and has worked with the industry to make sure progress is made. The fact he keeps his position gives us a welcome degree of stability.
The worry is that Cooper and Eagle, entering the pension arena for the first time, may think there is not a lot going on and that the big decisions on pension reform have already been made. Two Pension Acts have been passed, automatic enrolment is pencilled for 2012 and the Personal Accounts Delivery Authority is well on the way to securing its main administration contractor.
That would be a mistake. Yes, the principles of pension reform have been set out but the detail is still unclear. The recent DWP consultation on automatic enrolment regulations showed that, in practice, the process would be difficult for employers, savers, trustees and providers to get their heads – and business – around. It may work on paper but instantaneous automatic enrolment on day one, immediate opting out and taking contributions from people and then refunding them in a split second does not work in practice.
Cooper and Eagle have the opportunity to take a step back and review the scope of the reform, questioning whether it should apply to all employers and (almost) all staff. Maybe we should have a cut-off point, at least to begin with, where only employers with five or more staff should be forced to comply. Or maybe people should have to be employed for a month before they are automatically enrolled into a pension. And perhaps we should give them the chance to opt out before we take contributions from them.
The pension reform deal is not done and dusted. Reviewing it now could mean the difference between creating more pension savers and creating an inflexible process. We must not risk turning off employers who want to help their workforce to save, creating a bad name for automatic enrolment.
Rachel Vahey is head of pensions development at Aegon