Spence Review on Pensions in 2013


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It is that time of year where it is traditional to reflect on the last twelve months and look forward to the year ahead. It would be nice to say that is has been a relatively calm year in the world of pensions. It is, I guess, for the reader to decide whether that is true or not.

January began very unhappily with the threat of strikes by various public sector workers including doctors -the first time they would have been on strike for 30 years. Avid readers may recall that there was a similar start to the year in 2012… A think tank predicted that pensions would be obsolete by 2050, a view that is not shared by this author. “I’m in” adverts appeared everywhere to support auto enrolment.

February: the Regulator launched its campaign of awareness against pension liberation, urging trustees to be vigilant when asked to pay transfer values and to provide information to members, warning them of the dangers of pension’s liberation. Elsewhere, Defined Ambition was being promoted by the Pensions Minister Steve Webb as a way of improving member outcomes whilst not placing undue regulatory and funding burdens on employers.

March: was a complete mixed bag for the pensions industry. The budget saw the announcement that the new flat state pension was to be introduced in 2016 – a year earlier than originally planned. The cost of purchasing annuities for men was set to increase, following a European Court of Justice ruling stating that gender could no longer be taken into account when calculating pensions. The government was braced for a challenge by the “Yorkshire ripper” to claim his state pension at age 65.

April: our own David Davison caused a stir when he entered the Public Sector pension debate and managed to ruffle more than a few feathers with his view that serious reform is needed for multi-employer schemes. On longevity developments, a survey announced that people who live near the seaside are likely to live longer, maybe not the most stunning fact of the year but reassuring for those of us who spend many an hour on trains commuting into London from seaside towns!

May: the Pensions Bill of 2013 was introduced in Parliament with the highlights being the single tier state pension, the increase in state pension age to 67 and a new objective for the Regulator. The threat of strikes by Doctors was still looming and questions were raised around whether a Scottish PPF would be needed if Independence was voted through.

June: Auto Enrolment was compared to the campaign to eat more healthily. Eat 5 a day is a well know catch phrase but really should it be 9 a day? The same could be said about saving under auto enrolment: it should be more but it simply wasn’t palatable to make the minimum contribution any higher. Dare I say it but food for thought…

July: a survey said that 1/3rd of people born in 2013 will live until 100. Auto enrolment reached the 1 million mark and the threat of a Doctors strike had at long last started to recede.

August: the Regulator announced the results of their record keeping survey and, whilst some progress had been made, there was still a very long way to go. The PPF changed their provider of Insolvency scores to Experian which could have an impact on levies over the next 3 years.

September: the Regulator issued its first auto enrolment non compliance notice to an unnamed employer. It was announced that scheme rules could be changed to take into account the changes to the State Pension Age in respect of bridging pensions.

October: Prince Charles was an unusual commentator about the world of pensions and the need for innovative thinking if the industry is to move forward. His talk was generally well received and touched on the challenges facing our industry and the need for everyone to pull together in order for pensions to survive and prosper going forward…

November: saw the regulator launch a formal consultation on DC charges and on Defined Ambition. Alan Rubenstein, Chief Executive of the PPF, confirmed that the levy was unlikely to fall in the next 5 years and the outgoing Chairman of NAPF called for a single Regulator for pensions.

December: is the time to perhaps look forward to what 2014 will bring. Pot follows the member, Defined Ambition and Auto Enrolment are all high on the 2014 agenda but perhaps the greatest challenge will be to formulate a plan, implement it and then make some real progress.

Politicians please take note: it is Christmas and a peaceful pensions New Year would be a great present for all.