Sophia Singleton officially became president of the SPP on 1 June 2024
In the latest of the Society of Pension Professionals’ (SPP’s) regular columns, Sophia Singleton looks at some of the organisation’s key achievements of the past year and looks ahead to the next 12 months.
Helping shape the pensions landscape
The past 12 months have been somewhat of a whirlwind in the pensions industry, with a substantial focus on the new government's priorities, in part crystalised by last month's publication of the final version of the Investment Review, response to the options for defined benefit (DB) Schemes consultation and the Local Government Pension Scheme (LGPS) reforms as well as this month's Pension Schemes Bill covering everything from DB surplus and PPF levy flexibility for DB schemes, to guided retirement products, value for money (VfM) and small pot consolidation for DC schemes. SPP colleagues and I have been engaging with policymakers and regulators on many of these issues over the last year and I believe that the Bill will set a strong foundation for changes that will support members, sponsors and trustees.
The importance of savings adequacy
One of the outstanding challenges, that I have repeatedly banged the drum on over the last year – including with successive pensions ministers – is the need to improve pensions adequacy. In order to achieve this, we need a coherent plan that provides policymakers, industry and the public with certainty. The delay to the adequacy review was disappointing and like others, SPP has have been making the case for this to occur sooner rather than later – with a comprehensive SPP paper on the subject to be published this summer. As I've often said, rather than simply looking at a compulsory increase in contributions, we need to define adequacy, recognising that one size does not necessarily fit all and that we may need a more dynamic solution than a simple minimum flat contribution rate. There are many actions that policymakers, industry and savers can take, from supporting an older workforce and helping disenfranchised groups to improving trust and engagement with the industry.
Of course, a more appropriate advice/guidance framework will also help improve adequacy, and that's why we have engaged closely with the Financial Conduct Authority (FCA) on their new "targeted support proposals" – providing broad support whilst highlighting areas for improvement and emphasising that members do not tend to differentiate between different types of arrangement (whether they are within an FCA regulated contract-based arrangement or an occupational pension scheme) and that there is a risk of exacerbating differences, and potentially confusion, between the two regimes if targeted support products are developed within the FCA framework without sufficient thought to what a member journey will look like for an individual who has pension rights within an occupational pension scheme.
Administrative challenges
Although not covered by the Pensions Bill, there was good news from government on its stated intention to deal with the implications of the Virgin Media case. Again, I raised this issue with successive Pensions Ministers and I'm really pleased that the SPP, the Association of Pension Lawyers and Association of Consulting Actuaries have worked together so successfully to support DWP officials in finding a solution.
I have also raised the issue of the Transfer regulations with the Minister. Problems with the provisions relating to overseas investments, red flags, amber flags, ‘incentives' and ‘safe lists' remain, with the flags not clearly defined, members continue to face unnecessary obstacles and pension trustees face the dilemma of whether to take a literal or pragmatic approach to the application of these regulations.
An industry that supports all
I am committed to continuing to focus on the need to help the pensions industry to be more diverse and inclusive – we have written about LGBTQ+, ethnicity and gender pension gaps over the past 12 months to draw attention to the challenges. And we've held numerous events promoting diversity, equity and inclusion in our industry. I am keen to do more over the next 12 months and with this in mind we are preparing a fantastic SPP paper on diversity and inclusion due for publication in the coming months. This is being produced in partnership with organisations including Disability Rights UK, Stonewall and the Race Equality Foundation as well as a range of SPP members.
In short, a great deal has been achieved but there is still much more to do!
Sophia Singleton is president of The Society of Pension Professionals and partner and head of defined contribution at XPS Group
