The idea of a Pensions Commission with an indefinite lifespan has been around for a few years now, but different people mean different things when they put this idea forward. In April, the Pensions Policy Institute published Briefing Note 29: What could a standing Pensions Commission look like?The first type of Pensions Commission identified by the PPI is categorised as “general advisory”. This is the type of body which Adair Turner’s temporary Pensions Commission had in mind as its successor. The National Association of Pension Funds also supports a Pensions Commission of this form. The PPI envisages such a commission providing a general policy overview based on expert and independent research of trends, for example, the coverage of state and private pensions. This information would, in effect, monitor the impact of pension policy and assess its long-term suitability. It is this type of arrangement that seems to be proposed in the White Paper. A second type of commission would be one that makes recommendations to Government on specific parameters, for example, state pension age or the minimum level of the state pension. Recommendations would, says the PPI, be based on extensive, independent research and close monitoring of the pension system. The role should also include explaining the rationale of such recommendations to the public. An example of such a body is the Low Pay Commission, which makes recommendations to the Government on what the level of the minimum wage should be. While such a body would not make policy, the Government would have to explain why it did not follow any recommendations. This type of commission is advocated by the Fabian Society, Help the Aged, the Liberal Democrats and the TUC, states the PPI. A third type would be one that set policy in a specific area, for example, the state pension age. The PPI points to the Monetary Policy Committee as a model of this type. The MPC is responsible for adjusting the official rate of interest to achieve the Government’s inflation target. The ABI is a proponent of this type of commission to be an “economic regulator” in private pensions, for example, to use competition analysis to look at cost levels and set the optimum level of employer contributions to a national pensions savings scheme. Another proponent is the Pensions Management Institute. The fourth type of commission, identified by the PPI, provides public information, for example, financial education and increasing the public’s understanding of the need to save for retirement and how to do so. A model for this might be New Zealand’s Retirement Commission. It runs a website called Sorted, and as a result of the perspective it gets from the use of this website, it has been asked to take on a policy advisory role. Proponents of this type of commission include the ABI and Scottish Widows. The PPI warns that the design of any ongoing Pensions Commission would need careful thought. Should it have a permanent staff or should it be reconvened each time? The White Paper favours the latter. While a regular review of policy could be useful, might it encourage too frequent change to the system? Most important, its accountability and relationship with Parliament would have to be clear from the start. Politicians don’t like to think of anyone other than themselves having power, but the whole point of a Pensions Commission is to take long-term technical issues out of the short-term political arena.
UCB Home Loans and Alliance & Leicester are forecasting strong growth for the buy-to-let market this year. Research by A&L shows that the market has grown by nearly 20 per cent in the last two years and over three quarters of brokers have seen a rise in BTL transactions in the past three years. However, […]
Treasury officials have reportedly described the 2012 target for the state pension to be linked to earnings as an “optimistic ambition”. Cicero Consulting director Iain Anderson says next summer’s spending review and the date of Chancellor Gordon Brown’s predicted takeover as Prime Minister will be key issues.
Towry Law JS&P Group has sold its general insurance and healthcare arm, Towry Law Insurance Brokers to Broker Network Holdings and a consortium of TLIB directors for £12.5m.Towry Law JS&P Group says the GI arm is not core to its business model and says it will now focus on offering independent financial and wealth management […]
The affordable housing crisis is worsening by 165 homes a day, says a survey from home warranty provider Premier Guarantee. Although the number of homes being built increased by 17 per cent in the first quarter of the year compared with the same period last year, 70 per cent of all homes built cost more […]
By Jim Grant, Senior Product Insight & Technical Support Analyst 6 April 2016 brought in changes to employer duties for directors and partners in limited liability partnerships. Here we explain exactly what’s changed. Before 6 April 2016… Directors of limited liability companies where there were no other directors or employees were exempt from the employer […]
- Top trends
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
The Financial Ombudsman Service has appointed Money and Mental Health Policy Institute vice chair Richard Lloyd to lead an independent review into its complaints handling process. The former Which? executive director has been charged with producing a report into FOS’ practices after a Channel 4 documentary earlier this year suggested a number of failures at […]
Aberdeen Standard Investments has voted against multi-million pound payouts for senior executives at housebuilder Persimmon. Persimmon held its annual general meeting today. There was a huge outcry at the end last year when it emerged the chief executive, chief financial officer and managing director of Persimmon were in line for huge pay packets as a […]
Consideration of non-pensions related tax-advantaged investment is becoming more necessary This week I want to take a look at where things stand in relation to pensions and planning using tax-advantaged investments following the Spring Statement. With the increasing impact of the lifetime and annual allowances, consideration of non-pensions-related tax-advantaged investments is becoming ever more necessary […]