The King’s Speech set out the Government’s legislative priorities for the next 12 months, of which pensions were expected to be a priority in the discussion.
But , in a surprise to many, the King failed to mention any Pension Bill at all.
This Bill would have included measures to push forward the government’s Mansion House reforms announced in the summer.
The omission of the topic means all eyes now face the Chancellors’ Autumn Statement to set out his ambitions for pension schemes and boosting the economy.
However, without legislation scheduled, the pension industry is limited in the progress that can be made before the next general election.
King Charles was predicted to confirm plans to drive higher levels of investment in private equity via pensions.
The Mansion House reforms include plans to “unlock” up to £75billion of additional investment from DC and Local Government Pension Schemes (LGPS), as well as exploring handing defined benefit (DB) scheme sponsors greater flexibility to access surpluses and proposals to encourage consolidation of small pension pots.
However, the speech did not mention any of these measures.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown said: “Pensions policy reform always has the capacity to surprise and today’s King’s Speech was no different. It was widely reported to include a Pension Reform Bill to push forward key measures but when the announcement was made pensions were noticeably absent.
“Such a Bill was expected to advance this summer’s Mansion House reforms. These looked to speed up the consolidation of defined benefit schemes, boost investment in more illiquid assets and enhance value for money in DC schemes.”
“Their absence is confusing and means much-needed progress in these areas could effectively grind to a halt before the next general election.
“The Autumn Statement could well include some pension announcements but without legislation scheduled, the industry faces a frustrating time waiting for progress on these important reforms.”
However, Aegon pensions director, Steven Cameron, said that while disappointing, other routes could be found to advance the Mansion House reforms.
All eyes will now be on the Chancellor’s Autumn Statement for ideas to boost the economy and encourage pension investment.
Mr Cameron continued: “The initiatives include a new value for money framework for defined contribution pensions which will shift the focus away from minimising costs to maximising value for members, including through seeking out new investment opportunities.
“Those schemes which can’t meet the new test will be expected to wind up and consolidate into a larger scheme, which is then more likely to invest in private assets. There are also plans for extending a new form of Collective Defined Contribution pension which is likely to have longer investment time horizons, making private asset investments more likely.
“There have also been consultations on plans to solve the issues with multiple small deferred pension pots and to open up a wider range of ‘at retirement’ choices to members of trust-based schemes.”
“While there’s no Pensions Bill to take these forward, we believe they remain Government priorities and await clarity on next steps. We encourage the Government to prioritise those initiatives with the greatest potential to boost retirement outcomes of individual members.”
