Cross-party support from the U.K.'s dominant political parties for the Pension Schemes Bill unveiled Oct. 14 is vital to pass the legislation in 2020, delegates heard Thursday during the annual Pensions and Lifetime Savings Association's conference in Manchester.
"Next year we will take the bill forward," said Guy Opperman, the U.K. minister for pensions and financial inclusion and member of Parliament, in a video during the conference.
A panel discussion that followed the address from the U.K. minister, however, noted ambiguities and shortcomings of the proposal. The bill is set to introduce new powers for The Pensions Regulator to monitor defined benefit plans' funding levels, impose penalties on pension executives for reckless behavior, establish online retirement information dashboards and create an option to launch collective defined contribution plans.
"Auto-enrollment review was an obvious omission," said Gregg McClymont, director of policy at the £7 billion ($8.8 billion) The People's Pension, West Sussex, England, about the bill.
A 2017 review by the U.K. Department of Work and Pensions of the auto-enrollment legislation argued that getting workers to contribute to the master trust from the first pound sterling earned would be a significant advancement. Currently, there is a £10,000 threshold in annual earnings before savers can begin to enroll into a defined contribution plan.
The auto-enrollment threshold will be an area of focus, Mr. McClymont said. Women, who are three quarters of the low-income earners, aren't saving because the threshold is too high, he added.
Mr. McClymont was also skeptical about reaching consensus to launch both a government-backed public dashboard alongside other commercial dashboards. "The Labour Party's spokesman said that the party will only back the public dashboard," he said.
However, he said a bigger obstacle to pass the legislation is lack of majority on the part of the current government. "The bill will not be passed soon because the government has (no) majority," he added.
Speaking on the same panel, Carol Young, director of reward and employment at RBS, Edinburgh, said about the penalties that "there is some nervousness from (plan sponsors) who want to sustainably end their schemes."
"Understandably, there is a focus on (the plans') endgame and a long-term target. The bill meant to emphasize that," she said.
But Ms. Young said there are ambiguities about implementation expectations. Plans are questioning what their funding targets should be and who sets them up, she said.
Laura Myers, partner and head of defined contribution at Lane Clark & Peacock, who appeared on the same panel, also added that the bill doesn't change the limited appetite of DB funds to set up collective defined contribution plans. "There will be uptake, but CDC (plans) will not be widely adopted," she said.
