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Employer  >  Trustee Zone  >  OPS Matters  >  Professional Pensions Spring Show 2008 - part 2

Professional Pensions Spring Show 2008 - part 2

Manchester was invaded by individuals from across the pensions industry as the Professional Pensions Spring Show made its May debut.  The venue was Manchester Central and the 2 days were packed full of conferences, exhibitors and networking opportunities.

Professional Pensions put together an impressive line-up of key speakers for the event. Two sessions on the opening day worth reflecting on were the delivery of personal accounts and the pensions hot air balloon debate.

Personal accounts

The opening session tackled one of the pension industry’s hottest topics at the moment – personal accounts. Helen Dean from the Personal Accounts Delivery Authority (PADA) discussed just how the Government are planning to deliver personal accounts in 2012.

Helen began by discussing the rationale behind the reforms, citing that based on current figures, 7 million people in the UK are under-saving for retirement interestingly, there’ll be 50% more pensioners by 2050.

From these, and other, findings a new occupational pension scheme would be established, the result being the birth of personal accounts, due to start in 2012. Helen was very keen to emphasise the new duties that employers will have in terms of auto-enrolling their employees into the scheme and paying the minimum matching contribution of 3%. But perhaps the biggest change for employers from 2012 is that the Regulator will receive new regulatory powers to ensure employers are fulfilling their duties to their employees.

How will they be delivered?

PADA’s role in the delivery of personal accounts was then discussed. Primarily, they’ll set-up personal accounts – simple however, they’ll also adopt an advisory role to the Trustee Corporation in terms of deciding on establishing the investment strategy and the nature of the default strategy for personal accounts. After that PADA will disappear and the trustees will take on this responsibility.

Key points
- personal accounts will be large scale and focus specifically on those employees who have no work pension provision
- there’ll be good governance in place
- they’ll compliment, not replace good pension provision
- they’ll be self financing in the long term and
- the scheme will need to comply with Pensions Legislation 2008 Bill

The floor was thrown open to the audience and panel alike for some quick-fire questions. One question raised was whether PADA had thought about incorporating salary sacrifice into personal accounts as a means of making the contributions more affordable. This idea was dismissed by Helen Dean, and the majority of the panel, in terms of it opposing the intended simplistic approach to the structure and maintenance of the personal accounts.

Pension lottery!

Perhaps the most interesting comment came from the panel itself. It was suggested holding an annual personal account lottery. Every year, all personal account members would be automatically entered into a draw with the winner receiving a lump sum, which would be put into their pension pot. The idea is that the whole show would be broadcast live on TV, it would stimulate national interest and pensions would been seen in a favourable light, increasing consumer confidence – that’s the theory anyway. An interesting idea, but whether it would work is indeed, another story.

Pension ‘hot air’ debate

The pensions hot air balloon event was an interesting concept on paper and didn’t disappoint in terms of tackling hot pension topics, despite problems with the occasional blast of feedback from the audio equipment. The format was a simple one; four speakers going head in a knockout format, presenting their ‘hot’ topic for 5 minutes (allowing an extra 4 minutes for questions), battling for the audience’s nomination.

The speakers consisted of Rachel Broughan (Mercer), Geoff Dalton (Hewitt), Jason Coates (Wragge & co), and Mark Adamson (HS Admin). The final round saw Mark (defending member data) face off against Rachel (defending trustee decision making), with Mark taking the winner’s champagne after a close show of hands from the audience.

The debate was certainly a passionate affair and concluded the morning seminars.