Turner was appointed chairman of the committee in 2002. He was responsible for urging the Treasury to link state pensions to earnings rather than prices so pensions are not eroded over time. He had to fight Gordon Brown to allow him to extend his remit to state pensions, arguing that private pensions could not be reviewed in isolation.
Cicero Consulting director Mark Twigg says: “Few people have taken on Gordon Brown and come out the winner. This is testament to Turner’s political nous and character.”
Twigg says having state pensions linked to earnings rather than prices is critical to the success of pension personal accounts, which were designed by Turner’s committee, because it will reduce the disincentive to save by cutting down the number of families on benefits over time.
But means-testing remains a contentious issue, as does the question of whether existing schemes will be damaged by personal accounts. These two factors could see personal accounts fail.
Standard Life head of pensions policy John Lawson says: “There is scope for personal accounts to go pear-shaped. Turner was keen that personal accounts did not damage existing provision but the earnings’ definitions could still see this happen. The jury is still out on whether means-testing will put people off saving. It is not yet clear whether personal accounts will be a good legacy or a poor one.”
Turner was also sympathetic to widening the access to full basic state pension by reducing the number of working years to become eligible from 44 for men to 30 for men and women.
Turner will be the first FSA chairman to have his appointment scrutinised by the Treasury select committee but Twigg is confident that he will get through unscathed.
He says: “It is clear, particularly after Northern Rock, that Parliament needs to ask questions of these people. The person taking over from Sir Callum has to have the skills to navigate the FSA through the credit crunch but I think it is a practicality, a rubber stamp. I do not think that Turner will spook the committee, I think it will be a good hearing.”