Stuart Price, Partner and Actuary at Quantum Advisory, gives his thoughts on what the Conservative majority will mean for your pensions:
“Primarily, the Conservatives have promised to revive Guy Opperman’s three-part pension bill which supports collective defined contribution (CDC) schemes and the pensions dashboard while also giving the Pensions Regulator (tPR) new powers over defined benefit (DB) schemes.
CDCs are an alternative option to the traditional choice of either Defined Benefit (DB) or Defined Contribution (DC) schemes and work by pooling the collective employee and employer contributions together in a combined fund with members choosing how their funds are invested. From within the industry, CDCs are seen as a positive new method of pension provision.
News that the government is still backing the pensions dashboard is reassuring as there has been a lot of toing and froing on the matter, with it looking likely to scrapped at one point. The pensions dashboard will allow everyone to access and manage all their private pension arrangements in one place along with their State Pension. The tool will enable people to see exactly how much they will receive upon retirement and give them the nudge they may need to save more.
Providing the Pensions Regulator with more powers is a necessary step to protect workers’ pension schemes from reckless behaviour by company bosses. Additional powers could allow tPR to impose substantial fines on the companies and business owners who do not comply with their auto enrolment duties and other non-compliance issues.
The Conservatives would also make a review into the pension tax complications impacting senior NHS workers, a priority. This is crucial, as currently, senior NHS staff in Wales and England are reportedly turning down overtime as the controversial pension Annual Allowance would mean they wouldn’t get paid much more as the additional time worked would land them with big tax bills. It’s definitely an issue that needs looking into; the sooner the better.
Mr Johnson will also keep the triple lock, and has mentioned free bus passes and free TV licences for pensioners.
Whether the government upholds its promises or how long it takes…only time will tell.”
Stuart Price, Partner and Actuary