Industry mostly dissatisfied with current direction of pensions policy
More than half (55%) of the pensions industry is dissatisfied with the direction of pensions policy going into 2020, according to research from the Pensions Management Institute (PMI).
The firm's survey revealed 31% of respondents are doubtful that The Pensions Regulator will focus on the "right areas" of pensions policy over the next six months.
While two fifths (39%) of industry experts agreed the cost of regulation is about right, PMI figures show a third (34%) argued the cost is too high.
More transparency has been called for over appropriate funding models following increased expenditure of the Department for Work and Pensions' arm's length bodies, in turn leading to issues with the levy.
In terms of the levy, the PMI revealed the industry has a preference for a levy based on funds under management, followed by a preference for a per member levy.
Additionally, more than a third (37%) argued pensions and financial inclusion minister Guy Opperman's October letter to the 50 largest pension schemes requesting action to combat climate change set a "worrying precedent" for schemes, given they are "likely to have incurred additional costs to meet the request". However, a quarter (26%) welcomed this development.
PMI president Lesley Carline said: "While we of course welcome appropriate regulation and an increased focus on ESG across our sector, we need to bear in mind the extra costs this might bear on pension schemes. The protection of scheme members' funds should remain the top priority and obstacles to achieving positive member outcomes should be thoroughly examined.
"It is imperative that we see increased transparency around any regulatory costs that may negatively impact the costs of levies for schemes and leave them out of pocket."
She also said it is "important that all schemes consider integrating ESG principles into their investment portfolio", but noted the PMI recommends that "targets are achievable, particularly for smaller schemes with less financial clout".
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