David Weeks calls on the secretary of state for work and pensions to meet with the AMNT to explore the long-term direction for pensions
Dear secretary of state,
The Association of Member Nominated Trustees (AMNT) held a parliamentary event recently. Lord Flight, the parliamentarian and finance industry veteran, hosted us. He suggested to you that you might find it helpful to meet with us. We are, as he said, the industry voice for pension trustees. I set out here some of the issues that we would be keen to explore with you.
One key task is clear. Individuals need to be encouraged to save more during their working lives in order to fund income during periods of retirement that continue to lengthen. That requires increases in the levels of contribution that currently apply. That, in turn, requires trust in the pensions system to be enhanced. Pension providers need to build up the esteem in which they are held. The government needs to develop a tax regime that stimulates higher contribution levels into pension schemes.
Political leadership in pensions is currently in good order. The pensions minister Guy Opperman, and the shadow pensions minister, Jack Dromey, have clear commitment to their task. Both have political antennae to turn ideas into actions. The Work and Pensions Committee (WPC) under Frank Field does what a good select committee should do. It raises the profile of the issues. It pushes the boat out in terms of remedies to seek.
At a more parochial level, the Department for Work and Pensions (DWP) needs to ensure that governance of pension schemes remains in balance. The requirement for member-nominated trustees came about when that balance was upset in the Maxwell pension scandal. More recently, the WPC showed how the BHS pensions scandal came about because the balance had again been destroyed. They found at BHS an employer who had become over-mighty with advisers who were over compliant. The people who lost out were the pension scheme members and the wider public interest.
The role of the AMNT is to keep that balance in place. We represent the scheme members through their nominated trustees. Lord Flight called us "the industry voice for pension trustees". We are not a producer lobby. Nor are we primarily a think tank. We are practitioners. Our prime responsibility is to deliver our pension commitments. We recognise that the best route to a well-funded pension scheme is through a sponsoring employer who thrives, and who has good prospects for sustainable growth.
The quid pro quo is that trustees need to be well informed and to have sound judgment. We work actively with The Pensions Regulator on the 21st Century Trusteeship initiative to promote these aims. We cooperate with other industry representative groups to find new methods. We pursue a four-point strategy: training; outreach among poorly governed schemes; placing of experienced trustees in schemes that have a need; payment for trustees in recognition of the workload that we seek.
The time could be ripe for a pensions bill to come before parliament in 2019. AMNT certainly sees some candidates for inclusion. Our list would feature: (1) transfer of funds from defined benefit pension schemes; (2) pensions dashboard; (3) controls on costs and charges; (4) accounting conventions in pension scheme valuations; and (5) collective defined contribution pension schemes.
Secretary of state, I conclude. We at the AMNT hope that you will take up Lord Flight's suggestion to meet us. We would welcome the opportunity to support you in charting the long-term direction for pensions. In the shorter term, we could have a useful input to a future pensions bill. We feel that our unique position in the industry gives a valuable perspective. We are close to the members. We are not a producer lobby. We are practitioners rather than theoreticians.
David Weeks is co-chair of the Association of Member Nominated Trustees
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