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REGULATION/LEGISLATION

U.K. pensions minister delaying initiatives set out by predecessor

Ros Altmann
Ros Altmann

The U.K.’s minister for pensions announced that work has been “put on hold” on the development of defined ambition plans, collective defined contribution plans and the automatic transfer of small pension pots, as she focuses on other priorities.

Ros Altmann told delegates at the annual National Association of Pension Funds conference in Manchester, England, that she has inherited “a large number of initiatives” from her predecessor, Steve Webb. “I have had to make some strategic and tactical decisions — these are more about timing rather than policy itself. Of course, I’m passionate about ensuring good value pension products for consumers, and we cannot compromise on that,” she said.

However, she highlighted that it is also important to be “conscious of the impact of all the changes on the providers, and the industry as a whole. I’ve had to decide what needs to be done now, to protect savers … and what perhaps can wait longer. In other words, what is the right timing for further changes?”

Regarding the concept of automatic transfer of small pension pots, where a member leaving one employer takes their savings with them, Ms. Altmann said: “We have to protect DB … millions of people with billions of pounds need that to be looked after well. We have to develop DC, in the ongoing landscape as that rolls out.” She said she is also interested in an option that has both DB and DC elements — known as a defined ambition plan — but that it and collective DC “will be for future reform.” On collective DC, Ms. Altmann said “either we are a bit too early, or we are quite a lot too late. I don’t think it is a priority for now. If it happened 10 years ago, I think we would already be on the way. But even if we worked full pelt on trying to get (defined ambition) and collectives in,” she said she has been told that regulation would not even be in place “before 2018.”

Ms. Altmann added that she has not “abolished” or “abandoned” these ideas: “I do believe collective benefits will have a place — that some kind of risk sharing may well be very popular actually in the future … this is on hold for the moment with all the other changes.”