The Association of British Insurers, the National Association of Pension Funds and the Trade Union Congress have jointly called for the establishment of an independent commission to tackle what they say is a short-termist political approach to pensions.
It comes as the NAPF publishes a report arguing there is growing momentum for a future government to set up an independent body lasting more than one parliamentary term to provide more certainty around saving for a pension.
The report also draws on research carried out with over 1,000 consumers which shows that less than a third say reforms to pensions have made them more confident about the future of their pension savings.
NAPF chief executive Joanne Segars says: “Thanks to automatic enrolment, 5.2 million people are saving in a workplace pension today who were not five years ago. This achievement has its foundations in the work of the Pensions Commission, chaired by Lord Turner a decade ago.
“But our research shows there is a very real discrepancy between this positive progress and how confident, or not, people feel about saving for a pension. We believe this is a result of pensions policy driven by short-term priorities and political expediency creating a feeling of uncertainty among many employers that contribute to pensions and the savers that rely on them.”
She argues the long-term interests of savers, rather than politicians, should be “at the heart of pensions policy”.
Segars adds: “This support for a standing commission stretches well beyond the people who work in pensions to the everyday savers who will rely on their pensions for a decent income in retirement. The idea of such a commission is not a new one but it has yet to become a reality – our report shows there is growing chorus for that to change, and soon.”
The NAPF chief executive says the new commission would be “an OBR for pensions”, reporting independently to Parliament while also making recommendations on policy to ministers.
“It should provide an assessment of the UK pensions and retirement landscape in an impartial fashion,” she explains.
“We envisage the commission consisting of a small group of select commissioners whose expertise and knowledge can help us act in the long-term interests of savers, insurers, the industry and the wider economy.
“It will make recommendations for appropriate changes where necessary, and not make decisions. Making decisions is always going to be the right of politicians.”
TUC head of campaigns and communications Nigel Stanley adds his own vision would bring a Pensions Commission closer in line with the Low Pay Commission, an independent body that advises the government on the minimum wage.
He says: “I don’t think the OBR is a terribly good model for this, because what the OBR doesn’t do is make policy. It monitors, and a retirement savings commission might well do that, but I think this is a more about developing policy and putting the options there.
“I don’t think we need an annual report necessarily on every aspect of pensions. But you do need to look at things like the state retirement age every five years and whether savings levels are adequate every five years.
“And there will then be other things that you want to do, like ask how you make decumulation work for consumers, what are good defaults in decumulation, and do we need public policy to secure those?”
Federation of Small Businesses policy director Mike Cherry says the Low Pay Commission could further provide a template for a pensions body’s membership.
He says: “The one thing the LPC has is confidence, trust and respect and it has those three attributes because it is seen to be representative of all the sectors.
“And the real point is that whether it’s employees or unions, or employers or their organisations, everybody knows how to feed in so you can get that consensus at the end of the day.”
Separately, the ABI has set out its pension demands ahead of the general election, calling for more protection against scams and fraud, and better default solutions for those who do not engage with their savings.
It also wants to see reforms which allow providers to move savers into more modern pension schemes.
ABI director general Huw Evans says: “Insurers will be at the heart of many crucial issues facing a new government, such as reforming pensions. We have a role to inform and help shape policy, to strengthen the UK economy and continue to ensure our society is as well-equipped as possible to face the challenges of the future.”