Ros Altmann’s parting shots

She was made a peer and appointed to the position by former prime minister David Cameron, having previously advised the government on retirement related issues, following the Conservative Party election victory in May 2015.

A spokesman for Number 10 Downing Street said: “Ros Altmann has left the post. We have nothing more to add.”

In a note circulated to media outlets, Baroness Altmann said her departure from the government post will enable her have her life back and “speak freely at this dreadfully difficult time for our country”.

Baroness Altmann has wasted no time venting her frustrations. Soon after her departure from the government post, she hit out at the Department for Work and Pensions for a delay introducing regulation that would allow pensioners to receive higher payments from the Pension Protection Fund.

Baroness Altmann has wasted no time venting her frustrations

In her resignation letter, to the newly appointed PM Theresa May, she said efforts to improve pension policy have been thwarted due to short-term political considerations, exacerbated by the EU referendum.

Her predecessor, Steve Webb, now director of policy at Royal London, has sympathy with the difficulty of getting policy through government.

He said: “Campaigners who lobby hard to get government to change policy probably think that they would be able to get the change pushed through if they were in government, but that is not the reality.”

Industry commentators have suggested this comment is a thinly veiled dig at Baroness Altmann’s former boss Iain Duncan Smith, who she famously slated as “exceptionally difficult” to work for.

Stepping down

Baroness Altmann also called into question his reasons for stepping down as Work and Pensions Secretary, claiming his departure was designed to damage the campaign for Britain to remain in the EU, rather than over cuts to benefit payments.

One of her biggest gripes was the treatment of older woman affected by a change in state pension policy which will see the pension ages of both sexes equalised.

In 2011, the government decided to increase the speed at which the women’s state pension age is rising to come into line with men’s. It will now be 65 by 2018 and 66 by 2020.

Baroness Altmann told Ms May in the letter that she was not convinced the government adequately addressed the hardships facing women due to the short notice acceleration of the policy change under the 1995 Pensions Act.

Baroness Altmann told Ms May in the letter that she was not convinced the government adequately addressed the hardships facing women

In power, she made no secret of her desire to revamp the pension taxation system but instead, the government has moved to strengthen its Isa brand.

She expressed her vehement opposition to Treasury’s now-shelved proposals to tax pension contributions in line with the current rules on Isas to industry delegates at an Association of British Insurance conference earlier this year.

Baroness Altmann is not a fan of the Lifetime Isa either. Speaking to Financial Adviser after her departure, she said: “As someone who cares passionately about helping the majority of people across the country and wants to make policy for those on basic as well as higher rate tax, I feel we need a Lifetime Pension and not an Isa.

“Pensions have the right behavioural incentives to help people keep money into later life whereas the behavioural incentives of Isas are to spend the money too soon.”

Mr Webb said: “I had both the advantage and disadvantage of being an MP for 13 years before becoming the pensions minister. I also had a big advantage of being part of a coalition government – meaning I had a strong negotiating position. I had to make the case for the new state pension for example. We won over the Treasury in the end but they put up quite a fight.”

Despite her strong rhetoric, Baroness Altmann made no policy in her 15 month spell in the government post – although the Pension Bill is still in the works.

Defined ambition

However, during her tenure in office, plans to introduce defined ambition pension schemes and automatic small-pot transfers were put on the back burner. She said the time was not right to implement a new swathe of regulation on an industry that was going through enough changes as it was with the advent of the pension freedom in April 2015.

Baroness Altmann also told Ms May the government should develop a ‘one nation’ pension under an exempt-exempt-tax model, at the same time calling for a review of the defined benefit pension scheme funding and affordability.

She lists stopping pensions being turned into Isas, ensuring the ongoing smooth roll-out of auto enrolment and simplifying the process, and developing the digital state pension statements among her greatest achievements in government.

She now aims to influence and address pension policy as it goes through the House of Lords.

Her tenure in government has polarised opinion.

Mr Webb said: “She deserves a huge amount of credit for standing up for workplace pensions and challenging the Treasury over proposals to scrap pension tax relief and move to a pensions Isa.”

David Trenner, technical director for Intelligent Pensions, said Baroness Altmann might be remembered for Workie – the multi-coloured furry creature that was designed to front the auto-enrolment campaign at a cost of £8.5m a year.

The DWP appointed Watford MP Richard Harrington to replace Baroness Altmann. His official parliamentary title is ‘under secretary of state’, a more junior role, but he will be referred to as the ‘pensions minister’ in official government communications, according to a DWP spokesman. He added that the job requirements and remit remains unchanged.

Both Baroness Altmann and Mr Webb have warned the move could potentially dilute the pension brief.

However, in a note following Mr Harrington’s appointment, Baroness Altmann said: “If the downgrading of ministerial responsibility in DWP reflects a move to joined-up policy within the Treasury, then that would make some sense.”

Mr Harrington, who entered parliament in 2010, was a member of the International Development Select Committee, general secretary of the All Party Kashmir Group and vice-chairman of the All Party Film Group

He will report to DWP secretary Damian Green, who was hired to replace Stephen Crabb.

His CV is notably pensions-lite and he takes on a leading job in pension policy having had one previous role in government as minister for Syrian refugees jointly at the Home Office since September 2015.

He is poised to have a lot on his plate - from ensuring the progression towards a pension dashboard and the development of the successful auto-enrolment programme – including the consultation into the future of National Employment Savings Trust.

Mr Harrington will also need to contend with the second-hand annuities market and the merger of Pension Wise and The Pensions Advisory Service.

Justin King, a chartered financial planner with Dorset-based MFP Wealth Management, said: “Pensions have always been treated like a game of political football but it is probably the least of the government’s worries because there are so many other things to consider, post-Brexit.”

“I think Ros’s appointment was an extremely smart move by David Cameron because she was well liked within the industry, sadly it seems that the government machine was simply too big for her to drive through some real change.”

Myron Jobson is a features writer of Financial Adviser