One of the many messages the Tories sent to the pension sector at last week’s party conference was that in a few months time it is going to be calling the shots so people had better get used to it. In light of what has been said in Manchester, the industry needs to hear much more about what the party has in mind.
Both the tone and the detail of what the Tories have said indicate that nothing can be taken for granted if the Government changes from red to blue in seven months time.
If Cameron really has sealed the deal with the electorate, then that makes Nigel Waterson a pensions minister in waiting. This is certainly the way he came across at a Social Market Foundation/B&CE fringe event I attended at the conference last week, which he used to take a broadside at both The Pensions Regulator and the Personal Accounts Delivery Authority. His tone implied he is soon to be their boss, so they had better watch out.
Waterson reiterated his call to allow employers to automatically enrol staff into existing schemes as soon as possible and singled out The Pension Regulator as the only obstacle to this. He said that the only practical reason why it could not be introduced immediately was because TPR says it will not have enough time to do so, adding: “I am a great believer in ministers telling people what to do and them getting on with it”.
While TPR got off with a light crack of the whip, Waterson is considerably more irritated at the failure of Pada to communicate with him the change in policy that sees the implementation timescale for personal accounts extended from 18 months to three years.
As it happens, the heads of both organisations will feel the change in their pockets in the event that the Tories do get to Number 10 next May.
Both Tim Jones, chief executive of Pada and Tony Hobman, chief executive of The Pensions Regulator, earn more than the Prime Minister, a situation that Shadow Chancellor George Osborne clearly does not approve of at a time when the nation’s finances are in such a poor state.
If Osborne makes good his proposal that no public servant should earn more than the £197,000 that the PM earns, both will be taking a pay cut. Jones could be more than £30,000 down on his current £230,000 a year while Hobman’s £210,000 also takes him above Osborne’s new limit.
But of broader significance is the Conservatives’ apparent lack of enthusiasm for the very essence of the personal accounts agenda. The party says it will have an immediate review of personal accounts and that it remains committed to the Tur-ner settlement, which Waterson describes as a commitment to an increase in retirement age, the restoration of the earnings’ link and auto-enrolment “in some form”.
I may be wrong but I suspect a distancing from the idea of personal accounts and reports that lifetime savings models tick more boxes for the Tories than pensions correspond with that.
If, come next May, we find that the Government is going back to the drawing board on personal accounts, pension professionals will be tearing their hair out. Everyone in the industry needs to know whether the consensus is broken or not.
If personal accounts are to be dropped, not only will much expensive work been carried out for nothing but even more will continue to be done. The Tories should clarify their position.
John Greenwood is editor of Corporate Adviser