Opinion  

Too much legislation is clogging the pensions dream

Ruth Gillbe

With less than a week to go until pensions freedom day, providers and advisers are scrabbling to prepare their offerings and there is an air of excitement about potential opportunities, alongside fears about liberation and scams.

Despite the promise of the new landscape, there are systems slipping underneath the radar and an overwhelming amount of legislation which is threatening to turn this feel good factor surrounding pensions into something more burdensome.

Speaking to Robin Ellison, head of strategic development for pensions at Pinsent Masons, I discovered that at present he approximates there to be 80,000 different legal documents relating to pensions.

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That figure was a rough approximation of course – let’s face it who is actually going to sit down and count that many legal instruments – but it is reached by assuming around 500 words per page of laws (statutes and statutory instruments), materials from regulators and government, law reports, European Union document and so on and so forth.

“The reasons that such regulation is problem is because of the volume, the complexity (try and read the Taxation of Pensions Act 2015 for example) and the frequent change,” Mr Ellison explained to me.

This problem isn’t isolated to pensions alone – other forms of legislation are also privy to an unending scroll of material. But it seems to reiterate what key industry bodies and figures have been demanding in the shape of a unified pensions regulator.

At the moment, The Pensions Regulator, overseen by the Department for Work and Pensions, is responsible for trust-based occupation pensions and the role of trustees, while the Financial Conduct Authority, overseen by the Treasury, regulates contract-based personal pension products and pensions advice more generally.

Last month, the Work and Pensions Committee published a report into progress on auto-enrolment and pension reforms, in which it called for an independent commission to be established.

The suggestion was thoroughly backed by a host of industry experts, including Malcolm McLean, senior consultant at Barnett Waddingham and Jon Greer, pensions technical expert at Old Mutual Wealth.

Lord Hutton also said the industry needs something similar to the Independent Climate Change Committee in the area of retirement savings.

Wouldn’t a unified body overseeing the regulation and legislation of pensions help this; surely pensions deserve a more cohesive approach than they are getting at present?

ruth.gillbe@ft.com