Pensions to DIY forÖ
Years ago my Dad had a Ford Popular. Today weíd call it a car, but back then it was called a motor car. Most weekends he spent his time with the carís bonnet up taking bits and pieces off of the engine and polishing them up, or de-coking them, or replacing gaskets and stuff as well as changing the oil, putting shots in the petrol and tuning the carburettor and all sorts of related phenomena. By the end of the weekend the car would still go, but not as well as before and sometimes only with the choke full out until it got warmed up and that sort of thing. That meant that the process needed to be repeated the following weekend and thatís more or less what he did and exactly what every dad in our street did every weekend. Probably happened in other streets too for all I know.
Modern cars are a bit different to my Dadís old Popular. If you open the bonnet of a modern car it sort of speaks to you. Without using words (of course) what the tangle of technology and computer wizardry under a modern-day carís bonnet says is ďThis is nothing to do with you; donít touch anything or fiddle about with anything at all or the thing will never, ever work again and youíll only have yourself to blame!Ē
Just lately Iíve been reading the draft regulations that will soon form the words of the 2008 Pensions Act. I think the tangle of complex pension wiring and bafflingly intricate inter-relationships with social benefit systems and auto-enrolment, together with the constant likelihood of change all lurking together under the bonnet of pensions will make company pension schemes, even the simpler defined contribution ones, a bit like the engines of modern day cars. It may have been possible long ago for employers to take a hands-on approach to their pensions, but these days I just donít see how it will be possible any more. Itís all getting too fiddly.
Pensions, just like motor cars did in the past, are set to become more widespread and more complicated at the same time. My guess is that employers will be more likely to give the responsibility for keeping their schemes in good running order to professional advisers rather than rolling their sleeves up and having a go at them themselves.
Now, Iíve got no more insight into the future than anyone else, but all Iíd say is just two things really; first, this is what I think, and second, Iím usually right.
2 June 2009
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