TPR's decision on professional trustees was right, say peers

They also answered questions on ESG rating and data providers and flat rate pensions tax relief.

Read the reuslts in full.

The Pensions Regulator (TPR) was right to hold back from mandating the use of professional trustees, in the eyes of 82% of this week's 89 Pensions Buzz respondents.

"The decision as to whether to appoint a professional trustee should remain with the individual scheme and sponsor," said one. Another noted: "Mandating this when many [schemes] are well governed on a shoe-string budget is overkill."

A different commentator added: "Professional trustees can be an expensive overhead, and many ‘lay' trustees bring valuable expertise. Boards should be able to judge if they need professional support."

"It would have meant more expense for the employer, and the professional trustee is not necessarily the best solution for all schemes," said another.

Just 11% did not agree with the regulator's decision, and one who was in favour of making it a mandatory requirement suggested "many small schemes would benefit from a professional trustee", while another said the issue "needs to be addressed sooner rather than later".

The largest proportion (59%) of respondents said their schemes had not yet begun to factor in potential changes to the Retail Prices Index (RPI), while a quarter said they had and 14% were unsure.

However, many of those in the majority worried about whether there would be an override for schemes. One pundit said: "It would be nonsensical if we ended up with a two-tier approach of those whose rules permit a change and those who have to continue with something that is outdated, potentially overstated and no longer recognised."

Another agreed: "If RPI no longer exists then our rules will probably have to be changed so we can use whatever the new measure is called."

Several argued it is too early to factor in changes, and one said "it is not on the radar at this stage".

"This is a major topic but the important word here is ‘potential'. We need to focus on other issues such as member data, GMP equalisation, the impact of Brexit on sponsors etc," a further person suggested.

One of the 27% who answered in the positive stated while "immediate issues are being considered, no action has been taken as yet".

There are too many ESG ratings and data providers, according to nearly half (47%) of this week's respondents.

One said there are "too many definitions of what ‘ESG' actually is", while a different peer argued: "There needs to be a British standard we can all work to and measure up against."

"It should not be the flavour of the month and an opportunity for advisers to make money. It should be about good governance," said someone else.

A different commentator urged the industry to "stop hiding behind ESG", and "get back to proper investment decisions, based on fundamentals".

Of the fifth that disagreed, one suggested: "We need all the good ideas and then a large cull once consensus is reached on what the industry really needs."

Another added there weren't too many at the moment, but soon could be: "I suspect it will soon become the case of too many and be very confusing," opined another, while another said there is "still not enough coverage on a global basis".

After growing speculation that the government is planning to reduce higher-rate pensions tax relief from 40% to 20% in the upcoming Budget, respondents were relatively split in their views on whether there should be a flat rate for pensions tax relief.

One of the 47% who argued there should be a flat rate said: "It is fair across all groups so why the continued delay?"

Several with this view said that while a flat rate is fair, it should be set at 30% rather than 20%, with many arguing this would "help the lower paid while still giving a tax benefit to higher earners" and that it would be a "greater incentive to save into a pension".

Another argued: "If the chancellor uses the change as an opportunity to reduce the total tax relief burden, it will tarnish the reputation of pensions."

However, one of the 37% who argued against a flat rate suggested: "It would cause more problems than it solves."

"People should get tax relief at the rate at which they pay income tax. It is simple," urged another.

For something a little left field this week we asked respondents their preferred dress code if they had been invited to an evening dinner.

Despite many industry dinners having a black tie dress code, just 16% of Buzz commentators said this would be their preferred choice of attire, with one noting: "If it is a formal dinner then let us do it properly with black tie (it only comes out very occasionally now)."

Another revealed they enjoy black tie events "because it saves me having to think what I should wear".

The majority of peers revealed their preferred dress code is cocktail attire or lounge suits. One said this option is the most "convenient", but said "black tie definitely has its place".

Smart casual was the preferred option for a third of pundits, and one peer concluded: "There is nothing worse than a room full of men looking like penguins."

An event where the dress code is currently up for debate is PP's Rising Star Awards on 1 April. More information can be found at:
event.professionalpensions.com/risingstarawards/en/page/home

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• Topics
• Industry
• Pensions Buzz
• TPR
• professional trustees
• pensions tax relief
• ESG
• RPI