Industry calls for salary sacrifice to be spared
The industry believes the Chancellor should resist the urge to scrap salary sacrifice, according to Professional Pensions research.
The government is widely expected to clamp down on the relief next week.
This week's Pensions Buzz, which surveyed 181 professionals and trustees found just a third in favour of scrapping the relief, while six in ten rejected the idea.
Elsewhere in the survey, respondents said most small schemes either could not or would not meet the regulator's targets on governance.
Contributors also rejected the idea of paying lay trustees, and those in favour of some form of remuneration said it should not exceed £7,000.
Chancellor George Osborne should not abolish salary sacrifice in the emergency Budget according to a majority of this week's 181 Buzz respondents.
Almost six in ten argued it would be wrong for the government to remove the incentive for people to put money towards their retirement.
Others said it would be unwise to reduce the effectiveness of salary sacrifice just when smaller employers were being brought into auto enrolment.
Some respondents warned there would be unintended consequences if the policy was rushed.
A commentator said: "It is going to cause a huge amount of work for companies who have introduced it for pension contributions and flexible benefit plans."
But more than a third said they would support the axing of salary sacrifice. Several criticised the policy as a form of tax avoidance.
A pundit said: "The country is in debt and hard measures must be taken."
The majority of Buzz respondents rejected the idea that member-nominated trustees should be paid for their work.
This camp argued it was a contradiction to suggest lay trustees should receive money, which would make them professional trustees.
A pundit said: "Paying trustees, except those whose career it is, is counter cultural to trusteeship. Abolish the trustee concept and introduced paid scheme managers by all means."
Another asked: "How independent of the employer will a member-nominated trustee be if being paid by the employer?"
A number of critics said the only money member-nominated trustees should receive was for expenses.
However three out of ten said they should be remunerated.
This would ensure it was not only the richest members who could afford to offer such a public service, said one respondent.
Another added: "Given the degree of professionalism expected (and considering the fee scale charged by their professional contemporaries) then the argument for payment is far stronger."
Most respondents that supported paying lay trustees said they should generally receive no more than £7,000.
The most popular pay band was a modest £1,000 to £3,000, backed by two in five respondents, while just over a third believe trustees should get between £3,001 and £7,000.
Just 4% said a salary above £15,000 would be appropriate.
Respondents said remuneration would depend on the number of board meetings and sub-committees trustees served on, and the size and complexity of the pension schemes they worked on.
A commentator said: "Like any other work, you get what you pay for. Pay them based on the skills they bring to the job."
A respondents in favour of a salary up to £7,000 argued the money could be used to cover four main meetings and two committee meetings each year. "Reading, research and other preparation included," they said. "Out of pocket expenses extra. Kit should also be provided (iPads/laptops) to enable efficient running of meetings."
Most respondents believe small schemes either cannot or do not meet The Pensions Regulator's standards on governance.
Two out of five respondents said schemes had the resources to reach meet the watchdog's expectations, but were not doing so, while one in eight said was beyond them.
A sympathetic respondent said it was very easy to miss the standards on a mere technicality and it was more important small schemes showed willingness to meet best practice.
"I am sure that they can if they wish, but have no idea whether or not they do," said one commentator.
Another observed: "They don't have the time or the resources to meet TPR's expectations."
One out of six said small schemes can and do comply with TPR guidelines. A pundit asked: "Why wouldn't they?" while another agreed but added that the watchdog had to be proportionate.
Respondents were split on what over how worried the industry should be about the contents of the 8 July budget.
While most people fell into the quite relaxed or quite worried camps, however, one in nine contributors thought there was cause for alarm.
Among those who were unconcerned, one asked: "Another set of stupid rules that will create lots of work for us all so why worry?"
Another observed: "It's not like there's anything we can do about it, let's wait and see what's announced before we start panicking about what might (and might not) be heading our way!"
More worried respondents fretted over the short termism of George Osborne and the knock on effect this would have on the pensions industry.
One commentator said the occasion would be "Another nail in the coffin".
Another pundit warned: "Recent Budgets have shown that pensions are an easy target for the Treasury and the impact can be huge."
Click here to read this week's results in full.
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