The Society of Pension Professionals (SPP) has joined different commerce our bodies in urging the federal government to assume once more on its proposals for lifetime supplier pension pots.
Beneath the proposals, savers would have a single pension scheme all through their lives no matter what number of jobs they might have had.
The mannequin has been instructed by the federal government as a manner to assist resolve the issue of a number of small pension pots being held by savers.
However the proposals are “advanced and dear”, the SPP warned. It stated that alternate options such because the Authorities’s pensions dashboards mission may extra successfully resolve the small pension pots downside.
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The SPP today published an analysis of the government plans in a paper called “Just one pension?” which acknowledged there could be some benefits from a lifetime provider model but “the conclusion is that such an approach would be complex and costly.”
The paper pointed out that the government has already set in motion several positive pensions policy reforms that should be given an opportunity to be implemented and assessed before considering whether the LPM is needed.
It said there are probably better, cheaper, more effective alternatives, most notably a fully operational pensions dashboard system that comes into effect in 2026 and could be further enhanced in the future. It said that if policymakers and the industry concentrate on the policy changes already in motion, this is likely to increase their chances of success while simultaneously reducing the chances of a LPM being required.
Steve Hitchiner, president of the SPP, said: “SPP’s latest discussion paper has set out a number of sizeable challenges and downsides to a lifetime provider model. In our view, there are more effective alternatives, most notably a fully operational pensions dashboard system, that would be a far better use of resources.”
The provider trade body said the proposals could fundamentally alter the role of the employer and damage outcomes for savers and also pushed the case for pension dashboards to be allowed to be bedded in before more reform.
Yvonne Braun, director of long-term savings policy at the ABI, said: “Pensions dashboards will bring key improvements in data quality which could help to make more efficient, cheaper pension transfers a universal reality. It is important that this work is completed, and the impact understood, before any further reforms are added to the mix.”
