Companies should recommit to their defined benefit schemes, rather than pursue the “milk and dump” tactics that made headlines in 2016, pensions expert and found of Pension Playpen Henry Tapper has said.
Reflecting on the year that saw the collapse of BHS and its associated pension scheme, Mr Tapper said companies should be encouraged to take a more responsible attitude to their pension schemes.
“I intend to spend much of 2017 campaigning for a better understanding of the needs of our 6,000 or so DB schemes,” he said.
“I want people to better understand how these schemes can be used going forward. I’m not advocating a return to DB, but I’d like to see more employers being encouraged to keep schemes open and less of the milk and dump tactics that we’ve seen with BHS and other recent casualties.”
Talking more generally, Mr Tapper said 2016 had turned out to be a relatively uneventful year for pensions “despite all the noise”, but said 2017 had the “hallmarks of disruption all over it”.
“We know in advance that it will be logistically the most challenging year for auto-enrolment. More employers will set up a pension in 2017 than in any year ever. It looks like that record will last as we see numbers tapering off in 2018,” he said.
“For me, the challenge of 2017 will be to help as many of those employers into the right workplace pension as www.pensionplaypen.com can get to. It now looks as if payroll has really got to grips with the logistics of warning small employers of their duties, but major issues around the choice and integration of workplace pension providers remain.”
He said he also wanted to see DC moving more towards a “targeted pension approach”.
“I’m pleased Richard Harrington has commissioned a green paper to look at options. I hope that one of those options is to give risk-sharing more chance, especially in the spending of our money purchase pots.
“I want to see 2017 as a year when pension people start closing the gap that’s emerging between us and other sectors in the application of the new technologies.”
He said he wanted to see use of blockchain to “increase the accuracy and efficiency of pension administration, whether we are talking about investments or member records, or simply digitalising all the communications that go out to members”.
“Finally I am going to spend time with my colleagues making sure that whatever the final outcome of the FCA Asset Management Market Study, First Actuarial are on the right side of the curve.
"I hate to see the criticism being meted out to investment consultants and asset managers but it is richly deserved. I hope that 2017 will see a marked improvement in their behaviour and better outcomes for consumers as a result,” he said.
james.fernyhough@ft.com
