The first four questions of each survey have asked how satisfied we are with pensions policy and TPR.

Q1: How satisfied have you been with the direction of pensions policy over the last six months?

From the graph we can see more than half were satisfied of which less than 5% were very satisfied. Just over a third were dissatisfied with the rest being don’t knows.

Q2: How optimistic are you about the direction of pensions policy over the next six months?

Nearly 60% of respondents are slightly or very pessimistic over the direction of travel of pensions policy. This look forward question echoes the feeling from the industry that government is preoccupied with other matters and pensions will be given a lower priority for now.

Q3: How satisfied have you been with the activity of The Pensions Regulator over the last six months?

Over 70% of respondents are very or slightly satisfied with TPR over the last six months. Comments from respondents were very supportive of TPR’s approach to the Covid-19 crisis.

70% of respondents were very or slightly confident in TPR’s focus in the next six months. Although there were some cautionary comments from members regarding workloads that will arise from the fallout of Covid-19.

Pensions Tracker

Taking the results of the four surveys, we were keen to see whether sentiment towards pensions policy and TPR had changed and, if so, could we understand how or why?

By looking at the overall results we can see the satisfaction dipped but has moved upwards again. From responses we have received we believe the drop in satisfaction has been due to delays in government actions as the Pensions Schemes Bill, for example, has been delayed. The recent surge in satisfaction is a response to how TPR has handled the Covid-19 crisis, signalling the industry’s approval.

This is reflected in the results for how respondents have felt towards to TPR.

We can see the overall support for the areas TPR is focusing on taking a dip in the January survey, whilst the comments from participants did not express any real reasons as to why this happened, we can see approval bouncing back in the last survey, and, as mentioned above, its reaction to Covid-19 is the main reason.

Our Pensions Tracker allows us to compare the forward-looking optimism on pensions policy with reality.

This chart shows the percentage of participants who were optimistic about future pensions policy over the next six months (orange dots) compared to the backward looking assessment of satisfaction, taken in the following survey (blue bars). We can see that optimism for the next six months is not significantly different from the reality i.e. satisfaction over that last six months. Throughout the surveys the general theme is pessimism caused by continuous delays to the pensions bills and other areas of government business taking priority over pensions.

As we continue to undertake the Pulse survey it will be interesting to follow the developments in pensions policy and TPR’s focus through the feeling of the membership. Given the torrid time the economy, industry and people are having because of Covid-19, the next 12-18 months will result in movements in both. How these are accepted will be reflected in the Pension Tracker and Pulse survey.

Moving onto the topical questions:

Q5: With reference to TPR’s proposed twin-track regime for Defined Benefit (DB) valuations, do you currently expect your scheme (or majority of schemes if you are dealing with more than one) will adopt an approach that is:

45% of respondents felt their schemes or most schemes they dealt with would take the bespoke option compared to only 22% taking the fast-track route for valuations. This contrasts with TPR’s expectations, only large complex schemes would need to use the bespoke route. From the comments it is clear this is a divisive question with some concerned the prescriptive nature will overwhelm schemes, whilst others have embraced it, but overall there is a ‘wait and see’ approach to what the detail will be.

Q6: Has the Regulators advice to scheme’s during Covid-19 emergency been helpful?

As you can see there is overwhelming approval for TPR’s support during this difficult time. Although, as to be expected, the comments are quite telling with one respondent believing their approach was scattergun, another helpful but laborious, and one wishing it could have been more concise.

Q7: Clause 107 of the Pension Schemes Bill is intended to make it a criminal offence to ‘recklessly endanger’ a Defined Benefit scheme. However, many within the industry are concerned the Clause, as worded, is far too broad in scope and would potentially criminalise a range of ordinary activities concerned with management of, or services to, a scheme. How concerned are you that Clause 107 of the Pension Schemes Bill will criminalise normal DB scheme management and consultancy services?

Only 20% of respondents felt no concern. From the comments received we believe that many within the industry are still unaware of the implications of Clause 107 which is why in July’s edition of Pensions Aspect we featured an article from the PMI’s Policy and Public Affairs committee in conjunction with Burges Salmon, explaining just how, as written, it could affect trustees, their advisers and other consultants within the industry. One comment felt the concerns were scaremongering but still felt it would be better to ‘get it sorted out’.

Q8: To settle the data standards for pensions dashboard (before industry-wide compulsion comes into force), a number of volunteer pensions providers and schemes need to put themselves forward. They will work very closely with the Government to test/refine the proposed data standards, applying real pensions data to the digital architecture, in turn benefiting the whole industry. Do you think our industry will bring forward the necessary volunteer pension providers and schemes?

It is disappointing to see the results, in that only 52% believe the industry will volunteer. Perhaps the comments will help explain the surprisingly pessimistic view from the industry. There were several comments suggesting due to Covid-19, providers would be too busy to help at this juncture. Concerns were raised over whether the Government was trustworthy and another was concerned that the larger schemes and providers would volunteer leaving the smaller schemes struggling to play catch-up.

Comments did express support for the pensions dashboard even if they felt there was a lack of resource at present.

Q9: We have been advised during lockdown the risk of pension fraud has increased greatly. What evidence have you seen of an increased fraudulent activity?

The results from this question were perhaps the most surprising with two thirds seeing no evidence of increased fraudulent activities, compared to 15% who had seen a slight or significant increase. The results go against all the headlines we have seen over the last four months.

Within the comments section, concern is voiced more with regards to the increase in Defined Benefit to Defined Contribution transfer requests during what is possibly a difficult time for members. Whilst in itself it is not fraudulent, depending upon the advice given and pressure on members, it may be as bad as.

Q10: Will we see permanent changes to working practices arising from Covid-19 emergency? What is likely to continue?

The results are self-explanatory with video conferencing, and increased frequency of shorter more targeted meetings being popular. Concerns were raised over the lack of social interaction and digital fraud. Many commented the options were already available but would be used more so in future.

And finally, question 11…

Q11: If after lockdown the Government were to see fiscal savings via the pension system, which of the following do you believe will be applied?

Many expect the Chancellor to announce the removal of the triple lock and whilst it was an election promise and politically sensitive, many feel it has done what it needed to do and can no longer be justified. Fixed rate tax relief was the second option respondents felt would be revisited. Since the survey was undertaken the pensions tax regime has come under close scrutiny with the tax relief coming under the microscope. The Government is looking for evidence the £38bn tax relief works and at long last is looking at the solution to the net pay issue.

The current pensions tax regime is definitely under the microscope and we will watch it closely.

Another Pulse under our belts and we are already looking forward to creating the next one to be released for completion in December. If there are any areas you feel we should be looking at, or a burning question you would like us to ask, please feel free to send in your suggestions to marketing@pensions-pmi.org.uk