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PMI
29 June 2020

Pensions industry 'pessimistic' about future pensions policy

The majority (60 per cent) of pensions industry professionals remain "pessimistic" about the direction of future pension policy following the current pandemic, according to research by the Pensions Management Institute (PMI).

The PMI's latest Pulse survey found that despite regulation being seen as "on the right track", concerns around the Pension Schemes Bill and policy direction for H2 2020 remained.

It revealed that 80 per cent of respondents had raised specific concerns over clause 107 of the Pension Schemes Bill, and whether this could criminalise normal DB scheme management and consultancy services.

However, almost three-quarters (73 per cent) stated that they were satisfied with The Pensions Regulator’s (TPR) response to Covid-19 over the last six months, with a further 76 per cent stating that the regulator's guidance throughout the pandemic had been helpful.

Furthermore, despite concerns around potential government action, 70 per cent stated that they were confident that the regulator will continue to focus on "the right areas" during this same period (H2 2020).

However, respondents were more divided as to what exactly the "right areas" and best approach following the current pandemic might be, for both TPR and the government.

When considering how the government may recoup costs following the current pandemic, the PMI found that the majority (74 per cent) expected the pensions triple lock to be withdrawn.

Almost two-thirds (61 per cent) expected to see a fixed rate of pensions tax relief introduced, with a recent Pensions Policy Institute report calling for the change to protect lower income savers.

Respondents were divided the outcomes from TPR's proposed twin-track regime for DB valuations, with 45 per cent expecting the majority to opt for a bespoke route, whilst 22 per cent predicted the majority would choose fast-track options.

Encouragingly, the survey revealed that, despite industry concerns, over two-thirds (67 per cent) had not seen any “noticeable increase” to the level of scams during lockdown.

Commenting on the findings, PMI president, Lesley Carline, added: “Pensions policy has taken somewhat of a backseat during the current environment, while the government deals with the unprecedented challenges our society faces.

“The industry has been impressed by the agility of TPR with numerous guidance notes as well as flexibility around deficit repair contributions.

“However, it is clear that professionals are concerned with the delay to the Pension Schemes Bill and that schemes must be properly equipped in order to operate in the new world that we now find ourselves in.

“In particular, they must adapt to increasingly pressurised funding levels and the possibility of a no deal Brexit.”

Notes/Sources

This article first appeared on Pensions Age.

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Last update: 30 June 2020

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