In a statement today, Baroness Altmann, The Minister of State, Department for Work and Pensions, confirmed that government's priorities will be the implementation of the new State Pension, the continued roll-out of auto-enrolment, and the continued implementation of the pension freedoms.
Altmann said:
"All these reforms will increase the number of people saving into workplace pensions, introduce new freedoms allowing savers to access their cash, and implement a new State Pension that will be far easier to understand in the future. However, we are conscious of the need to ensure Government, providers, employers and members are able to focus on these changes to ensure their success.
"That is why we have decided that the time is not right to implement Defined Ambition, Collective Benefits and Automatic Transfers. The time is not right to ask the pensions industry to absorb the new swathe of regulation that would be needed to make such further reforms work effectively. The market needs time and space to adjust to the other reforms underway and these areas will be revisited once there has been an opportunity for that to happen."
Tom McPhail, Head of Retirement Policy, said:
“We welcome this announcement from Baroness Altmann today. Whilst the previous government introduced some excellent pension changes, particularly in respect of the state pension reform and pension freedom, in the end it tried to do too much. Given the challenges in communicating the hugely complex changes to the state pension, the DWP’s limited resources are far better employed getting this right than on trying to introduce Defined Ambition pensions for which there is no apparent market appetite.
“Pot Follows Member is a policy solution which would disrupt individuals’ savings journey and discourage them from engagement with their retirement planning. It is a perverse policy which is fundamentally at odds with the pension freedoms. We have consistently called for its abolition. Hargreaves Lansdown (in conjunction with Aviva) has designed a simpler alternative which would put individuals’ interests at the heart of the pension system. We believe that once someone has a pension, they should be encouraged to take ownership of it and to take an interest in what it will produce for them.”
Kate Smith, Regulatory Strategy Manager at Aegon, added:
“Aegon welcomes the Pension Minister’s decision to delay the implementation of automatic transfers until the completion of automatic enrolment in 2018. We believe this is the right decision given the volume of recent pension reform and the industry shouldn’t be distracted from the task of auto-enrolling millions of new savers into pension schemes over the next few years and implementing the new pension freedoms."
