In depth: Legislation will put a spanner in the works.
Years ago my dad had a Ford Popular. Today we'd call it a car, but back then it was called a motor car. Most weekends he spent his time with the car's bonnet up, taking bits and pieces off of the engine and polishing them up, or decoking 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 that's more or less what he did, and 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 dad's 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 car's bonnet says is: "This is nothing to do with you; don't touch anything or fiddle about with anything at all or the thing will never, ever work again and you'll only have yourself to blame."
Just lately I've 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 cars. It may have been possible long ago for employers to take a hands-on approach to their pensions, but these days I just don't see how it will be possible any more. It's 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, I've got no more insight into the future than anyone else, but all I'd say is just two things really: first, this is what I think; and second, I'm usually right.
First published in Pensions Week, 8 June 2009
Bookmark this article what are these?
We are not responsible for the contents of any website, or any changes or updates to these sites, other than those owned by us. We are providing these website addresses only as a convenience, and does not imply our endorsement of the sites.