There was something conspicuously absent from Adair Turner's weighty tome on everything that is wrong with pensions in this country. Please excuse the hackneyed way of phrasing it – but it was more interesting for what it didn't say than for what it did.
The headline was that we would all see our real incomes as pensioners drop by an average of 30 per cent over the next few decades if nothing was done. As someone who has been reporting pensions and what we might do about them for nearly 10 years, I found it difficult to resist a crushing sense of anti-climax.
Turner had had 20 months to assess the UK pension situation to conclude that we had the choice of a “range of solutions”. Either savings would have to go up or taxes would have to rise or we would all have to retire later.
Alternatively, we always have the choice of doing nothing and being poorer.
Pardon me the ironic tone but he left out one alternative – we could always make ourselves much less healthy and die younger so that we cost the pension providers less. Then taxes and saving could come down.
Did this report need to be written? After all, how much of this was new? Almost all the findings of the report can be found in a slightly different order and with slightly different shades of emphasis in another report commissioned by the Government in 1997, when it was deciding what to do about the then urgent issue of pensions. Tom Ross's pension provision group was not allowed to make recommendations either – conveniently sparing politicians from any pressure to do anything which might require an unpalatable quantum of political courage.
Then there was the Pickering report resulting in the Green Paper which resulted in the Pensions Bill which resul-ted in – a few tax reforms. In fact, it was that Green Paper – and the consultation attaching thereto – which resulted in Turner's Pension Commission at the end of 2002.
The industry had already put the case forcefully for an increased level of compulsory private saving. Some pension guru contacts of mine at various private sector companies joked that when a pension consultation came along – and there have been well over 30 in the last seven years – they no longer sat down to write it afresh.
They would simply dig up the old Adobe Acrobat document from a year before, make a few presentational changes and send it off. After all, it was not as if much had changed in the meantime.
In fairness, Turner's report contains a lot of insight which, though it is not particularly new, is always useful. It will also have reawakened the fear of poverty in retirement which, unfortunately, the public must have in order for pensions to be a sufficiently “live” voting issue that politicians feel they do have to do something about it.
But after absorbing all the frightening facts, a reader of Turner's report could easily be foxed into overlooking a gaping hole. Turner was saying very little of any substance on exactly the issue he was supposed to – an increase in compulsory private saving.
Again, in fairness, this was an interim report. The former CBI director general made it clear he was not making recommendations, which would wait until next year. He ref-erred only in passing to the possibility of an increased level of compulsory private saving as one of a long list of “options”.
At the end of 2002, when Turner was first commissioned to write his report, the talk of a pension crisis had a meaning, if at all, in relation to company schemes. More and more employers were closing them to new members.
But more frighteningly, the three-year slump on the stockmarket had kicked massive holes in company pension scheme accounts. Those holes are smaller now the stockmarket has gone back up.
But the fear was that emp-loyers would neglect their schemes and abandon them if the company got into trouble, leaving staff without a substantial chunk of their pension. Unions were also angry with employers for switching from secure final-salary schemes to money-purchase arrangements, where they need only contribute half as much. In the run up to the publication of Andrew Smith's pensions White Paper, the TUC started demanding compulsory employer contributions to private pensions.
Smith's Green Paper contained nothing about their demands. Instead, the issue of compulsory private saving would be decided by a new Pensions Commission, whose main task this would be.
I remember reporting it from the BBC's Millbank studios in Westminster and meeting a union leader who was coming in to do a radio interview. Wasn't he upset that the Green Paper contained nothing of their demands. No, he replied, because the Government had set up this Pension Commission. But, I asked, wasn't that just a way of avoiding a decision on it – of batting it out into the “long grass”? “Well – off the record?” he answered. “We are happy with what we have been told about the Pension Commission.”
If compulsory private saving is introduced, would it not make sense to avoid the issue until after the general election? Turner, of course, is independent of any political masters. But would he want his time and effort to go to waste – as indeed it might if he tried to press the Government into introducing compulsory private contributions before a general election?
If it could wait until after the next election, then who could be better placed to recommend compulsory employer contributions than a former director general of the CBI? But we had better not say too much about that – at least for now.
Andrew Verity is a financial reporter at the BBC