Dowsey believes personal accounts are a good idea but there needs to be greater focus over certain definitions.
She says: “Anything that encourages people to save is a good thing but I would like to see more clarity such as over the definition of what is a pensionable salary because it is too opaque.
“It is going to be difficult for a lot of payrolls to administer when it comes to band earnings and total earnings. It is all just a bit messy really. If you think about the way that most pension schemes are set up, it tends to be based on basic earnings as it is easy to calculate.”
Dowsey says she hopes that when the Personal Accounts Delivery Authority is given greater powers, it will get to grips with some of these technical issues.
“Once this power has been given, the personal accounts ball can start rolling. I hope this will mean we will see more movement and clarity,” she says.
Dowsey agrees with Asso- ciation of British Insurers director of life and savings Maggie Craig over the importance of auto-enrolment being phased in from now wher- ever possible.
The concept of auto-enrolment appeals, says Dowsey, because it suits the British market perfectly due to its inertia. “We are a pretty apathetic bunch when it comes to joining pension schemes,” she says, adding that. from an employer’s perspective, auto-enrolment will create a massive increase in take-up rates.
However, she says employers and trustees can do more themselves to increase take-up in the pension market. “They can do more to engage with their members and do more to engage themselves. Some employers do a lot, they are good with their governance, they have committees but there are not enough employers doing this.”
She admits that consultancy Aon struggles with its clients sometimes to get them engaged in such matters, although on the whole they are getting better. Communication is key to the success of personal accounts meeting the needs of the public and the obvious way of doing this is through the employer, says Dowsey.
But she warns that there could be some issues over advice. “There is an expectation on employers using material developed by Pada or The Pensions Regulator but the employer’s hands will be tied because they will only be able to give generic information, they will not be able to give advice.
“I can envisage employees coming back to their employer and asking questions as they will not know where else to go and face being told the employer is not able to help them.”
Dowsey says she is on the Government’s side when it comes to the arguments over means-testing.
She says: “You cannot rely on means-tested benefits being around in 20 to 30 years time. How is it possible to make a decision now on something that is so uncertain? I feel that people should be taking responsibility and making adequate provision for pension savings.”
She says there are still questions to be asked about who will police personal accounts after 2012, adding that the onus will very much be on the employer to do the right thing, although it will be a difficult task policing opt-outs and the three year rule on re-auto-enrolling.
On the issue of levelling down, Dowsey says there is plenty of work going on behind the scenes from various industry bodies to iron out concerns. As an example, she points to work that the National Association of Pension Funds is doing to create a new quality mark designed to promote the value of workplace pension funds.