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BeeHive  >  BeeLines  >  What’s in a name?

What’s in a name?

Well.  Hello again.  Hope you enjoyed the break as much as I did.  But enough of that; it’s a new year already and if, like me, you found that once the alarm clock went off and the radio went on this morning you too woke up back here in Pensions Groundhog Day, then welcome back. 

Let’s just get on with it shall we?

Judging from my post this morning I’d say that most of you already know about the BBC Money Box interview of 29th December where the chief exec of the Personal Accounts Delivery Authority (PADA) told the BBC’s Paul Lewis that the government’s pension reforms may be delayed, but in case you missed it I’ll go through what was said.

The interview on BBC Radio 4 was also written up as an article on the BBC website by Paul Lewis and there’s a link to that article at the end of this BeeLine if you’d like to read up on it.  From that link you can also get to listen to the radio interview too if you’d like.

You’ll know, I know, that the PADA is the body that’s been set-up by the government to deliver the new national scheme of Personal Accounts in 2012; the hard bit of the reforms I guess, now that the talking’s almost over.  Well, the gist of what the PADA’s chief exec said in the radio interview was that the 2012 target date might not be achievable and also that the proposed 4% employee contribution could be phased in over a three-year period in the way that the 3% employer contribution will be.  To me that says that the combination of a delay and the phasing-in of the full contribution level will effectively mean that the Personal Accounts won’t be fully with us until 2015 at the earliest.  That’s nearly three Olympic Games away!

Obviously plenty can happen in that length of time.  Indeed, one of the things that looks likely to happen is that Personal Accounts won’t be called Personal Accounts.  In the same interview Tim Jones, the PADA chief exec, also said that the name ‘Personal Accounts’ was being reviewed because it does not really explain what the new scheme will do.  Hmm!  That’s a good point I suppose.  Personal Accounts, which will be a national defined contribution occupational pension scheme could easily be confused by Joe and Josephine Public with Personal Pensions which are personal pensions.  Personal pensions, of course, are regulated by the Financial Services Authority, whereas occupational pension schemes are not.  So it’s probably better not to get the two things confused I’d say.  Pensions are fiddly enough as it is.

The original name for Personal Accounts, if you remember, was to be the National Pension Savings Scheme (or NPSS) which to me did a better job of explaining what it is all about, particularly as it is a national pension savings scheme.  So there may be some merit in the PADA (or the NPSSDA even) revisiting that.  Thinking about it, it could be doubly good in that the scheme is being designed to help some people accumulate meaningful pensions, but others may find that the value of their savings in the scheme will be of little, or even no, use to them because of the way their entitlement to means-tested benefits will be reduced by saving.  The NPSS acronym could work well for both groups I think.  For those for whom saving is a good idea the scheme would be the National Pension Savings Scheme and for those who through the mystery of ‘100% Withdrawal’ lose the entire value of their savings it could be the No Point in Saving Scheme.  That would work well wouldn’t it?  I really think I’m on to something here…

Anyway, before I get going with my piano lessons and punching out the people who annoyed me yesterday, if any of you would like to read the BBC article on all this you can get to it by clicking on the link here:

http://news.bbc.co.uk/1/hi/programmes/moneybox/7163257.stm

Steve Bee

3 January 2008

 

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