NAPF Conference: Over regulation is distracting schemes

The government should stop bombarding the industry with costly regulation which distracts pension funds from running their schemes effectively, delegates heard.

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The government should stop bombarding the industry with costly regulation which distracts pension funds from running their schemes effectively, delegates heard.

The government should stop bombarding the industry with costly regulation which distracts pension funds from running their schemes effectively, delegates heard.

Whitbread Group pensions director Lesley Williams told delegates at the National Association of Pension Funds Annual Conference over regulation and legislation from the government was distracting the industry from other priorities such as creating default funds that are right for members.

Williams (pictured) was alluding to the freedom and choice in pensions afforded by the government in its radical package of reforms announced in the Budget, including ending compulsory annuitisation and offering members the option of taking their entire pension pot as cash subject to a marginal rate of tax.

She said: “I would like the government to stop bombarding us with regulation which costs firms money and distracts them from running a pension fund.”

She was also critical of the recent announcement by the government that over-55s will have the flexibility to draw down their pension pots in chunks, which has led some sections of the industry to draw comparisons with a bank account.

Williams warned being able to take an entire pensions pot as cash and “putting it in a building society”, as was “not a good outcome” for members.

Meanwhile, Association of British Insurers director general Otto Thoresen said product solutions to meet the freedom and choice introduced by the government were not beyond the industry, adding it was “an opportunity for the pensions industry to work together”.

However, he added the industry was also “very unclear” about the shape of future for customers saying it would have to “look to the horizon to innovate and be ambitious”.

But he said: “Unless the industry puts forward the idea that freedom is reforming the agenda to make saving attractive then I feel concerned at where the pensions agenda will find itself in the next three to five years.”

The Association of Superannuation Funds Australia chief executive Pauline Vamos said the biggest risk was advisers steering people in the wrong direction.

She advised schemes: “You have to ensure the minimum service is to provide members with good advice. If you don’t someone else will and you will lose them.”

Vamos said annuities were not a popular product in Australia where the majority of members were looking at receiving a regular income throughout retirement.

In terms of advice, she said Australian scheme members had a “DIY attitude” to their savings and so making guidance and tools available online was seen as a sustainable solution to help them.

 

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