Kate Smith, Head of Pensions at Aegon: “We welcome the updated workplace pension roadmap published today by the Pensions Minister, Torsten Bell. It provides the industry with much needed clarity around timescales and sequencing of changes, and an element of certainty in a time of political change. We're pleased that the Government has listened to the pension industry's concerns about such a crowded pension reform agenda, the sequencing of the various initiatives, and the impact of implementation resource challenges. We're pleased that the Minister has accepted the need for a 'test' period for implementation of the Value for Money framework, something Aegon strongly argued for. However, the full launch timeline has not been put back as we had hoped. The first year of the framework (2028) will include just master trusts, the largest single-employer trust-based schemes, and the largest multi-employer contract-based arrangements open to new employers, with no 'automatic consequences' based on the assessment outcomes in the first year. The VfM Framework will be extended across the market from 2029, with potential consequences from then. Contractual override is critical for pension providers to support the VfM Framework and the scale objectives. As previously planned, this will be available to contract-based providers from 2028, before all default arrangements not open to new employers will have to complete their full VfM assessments. This approach is helpful, but legacy defaults, of which there are hundreds across UK pension providers, will still need to complete extensive data returns. We also welcome the two-year delay for schemes to comply with the Guided Retirement provisions, giving time to work through the policy challenges and align with the proposed retirement CDC provisions. We agree there is more work to do to ensure that policies are aligned across the pension spectrum for both trust-based and contract-based pension schemes. Publishing the roadmap opens up a vital opportunity for discussion, for industry agreement and alignment on the most effective way forward and, ultimately, for the improvement of outcomes for our customers."
ACA Chair, Chintan Gandhi: ACA supportive of the government publishing its roadmap to unlock the vast measures set out in the Pensions Schemes Act. We are also supportive of policymakers listening to industry calls to delay guided retirement until such time that Retirement CDC is available, allowing trustees a fuller range of income based solutions to pick from when setting their default pension benefit options. Key challenge however will be deliverability of what is an ambitious roadmap! We do hope the steps and dates set out are realistic rather than the earliest points at which we might get to the various stages - otherwise there is a real risk delays in implementation are compounded well into the next decade.”
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