Frank Field is good for pensions, says industry
Frank field is a good thing for pensions and the government will make the necessary legislative changes to allow CDC, according to industry
Frank field is a good thing for pensions and the government will make the necessary legislative changes to allow CDC, according to industry.
This week a total of 147 scheme managers, trustees, actuaries and consultants responded to the confidence tracker and the survey.
To view the results in full click here.
Over half (53%) of respondents believe Work and Pensions Committee chairman Frank Field is a good thing for pensions, compared to some 30% who disagreed.
Of those who agreed, several pointed out it was good the chairman was not afraid to raise issues and ask difficult questions - and said he was one of very few politicians who understand or care about pension members.
One commented: "Although I disagree with him on many points, he performs a useful function in Parliament."
Of those who said no, one mentioned he failed to understand the complex relationship between trustees and scheme sponsors.
Another proposed that he should act like a politician "rather than a schoolyard bully" and added: "I believe his time has come and gone."
Recently he has become a grandstander whose "knee-jerk reactions" serve headlines and do nothing for pensions, according to one. Another commented, "If he wants to be The Pensions Regulator, he should apply for the job. If not, he should "butt out."
"Britain's Trump for Pensions," said another.
Some 17% were unsure.
Almost half (49%) were confident the government would make the necessary legislative changes to allow for collective defined contribution (CDC) schemes following Royal Mail's announcement it would shift to CDC if legislation allowed.
While some said they hoped the government would change legislation, others called it a "big mistake". One explained: "CDC isn't a magic money tree," while another said the government would have no choice, but that it would happen in 2020 at the earliest.
"Why wouldn't they support it? Brexit can't justify total paralysis," said another.
Almost three out of ten (28%) disagreed. One called it a "nonsense" move, and that focus should be on improving DC. Another said pension legislation has gone through so much change that it did not need more, and noted: "If Royal Mail can do it without legislation then leave it alone."
While several others said the government simply had too much on its plate to make a move.
Almost a quarter (23%) said they were not sure.
One said: "...and frankly, I don't care. Wouldn't go near CDC with a bargepole!".
It would be difficult to legislate on something they knew nothing about, said another dubious respondent.
"A few, but not many" employers would be interested in a CDC scheme, according to over half (52%) of respondents. The consensus was that although it was a useful addition to the schemes on offer, it could take time for it to be in high demand because of its complexity compared to DC or defined benefit (DB) schemes. One said it would only be suitable for a small number of employers, while another suggested renaming CDC to "partnership saving" would ignite interest.
Some 13% said "less than a few". "It would be a branch for the dinosaurs to hang on to; a short term stay not a sustainable solution," said one.
A further 18% of respondents believed there would be "more than a few" takers of CDC. One said CDC-style annuities and could prove popular. "Everyone should explore this avenue," said another.
Some 9% said Royal Mail would be the only CDC scheme to gain traction and 8% said they didn't know.
A ‘fit and proper test' was mentioned by some 89% respondents to this multi-choice question as the most effective way to determine whether a professional trustee was suitably qualified.
Seven out of ten (70%) also selected continuing professional development (CPD), although one commented this would be helpful for ongoing validation rather than an initial decision. Another echoed the most important requirements for trustees are related to motivation, personality and intelligence. "Technical (exam based) knowledge can be gathered from advisers," they said.
Taking an exam was also mentioned by over half (52%) of respondents, while interviews were mentioned by some 44%. However, some said this would only slow down the process.
Additionally, two-thirds (33%) noted all of the above.
However, some said "none of the above". As one doubtful respondent said, quality and experience should be more important than paper qualifications.
One said the regulator wouldn't enforce any of these solutions because it "wants the industry to regulate itself".
Almost half (47%) of this week's commentators agreed employees should have the same access to pension's accrual rates or contribution rates. However, the idea was close to evenly split with some 46% of respondents who disagreed.
Of those who said yes, one said: "All employees of the same employer. I thought that is what the law says?"
"But it will never happen - the higher paid will always receive better benefits," said another. If employees are receiving different employer pension contributions, their salaries should be adjusted to compensate, argued a third.
Of those who said no, one commented "but it's a nice idea", while another said "one size does not fit all".
One concerned pundit asked: "Should all employees in the workplace be paid the same amount?!" If we don't all get the same salaries we shouldn't expect the same pensions, another explained.
Of the 7% who said they didn't know, one said a level playing field was a nice thought, but not a practical one as it would depend on the employer's industry.
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