The new coalition government has published the agreements it has come to on policies, with few surprises for the pensions industry.

The parties have pledged to establish an independent commission to review the long-term affordability of public sector pensions, an idea that has been bandied about in the months running up to the election by the National Association of Pension Funds (NAPF) in particular.

The Conservative-Liberal Democrats government has also promised to restore the earnings link for the basic state pension from April 2011, which will carry a "triple guarantee" that pensions are raised by the higher of earnings, prices or 2.5 per cent. This was an idea proposed by the Liberal Democrats in its election manifesto.

It will also not come as a surprise that the coalition agreement features the phasing out of the default retirement age. There has also been the promise of a review to set the date at which the state pension age begins to rise to 66, although this will be sooner than the 2016 for men and 2020 for women that was set out by the Tories. This date was already ten years earlier than proposals by the outgoing Labour government.

The compulsion to buy an annuity by age 75 has also been scrapped, an idea agreed upon in both parties' manifestos, and the coalition government has promised to follow through with recommendations to compensate those affected by the Equitable Life debacle.

However, there has been no mention of limiting tax relief on pensions to the basic rate, an idea clearly set out in the Liberal Democrats' proposals.

And tasked with these responsibilities will be Iain Duncan Smith, who has been named Secretary of State for Work and Pensions.

Ian Bell, Baker Tilly's Head of Pensions, was less than enthusiastic over the appointment. "There were two things the pensions industry and change-weary trustees could have hoped for in a new minister. One was experience with pensions and the other was someone with party influence. We partly got the latter.

"The coming months will tell us if 'The Quiet Man' has something to say to his own party and especially his coalition partners on the revival of the pensions industry after the difficulties of the last few years," he said.

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