Reaction to Opperman's departure; new minister urged to 'get up to speed quickly'

The pensions industry has highlighted the news of Guy Opperman’s departure from the Department from Work and Pensions (DWP) as the end of a “period of stability”, with many warning that his successor will have "a lot on their plate".

Pensions Minister, Guy Opperman, was the longest serving Pensions Minister in the UK’s history but was not reappointed by Truss, confirming today (20 September) that he was “no longer a minister”, and would instead be focusing on his duties as a backbench MP.

Pensions Management Institute (PMI) director of policy and external affairs, Tim Middleton, noted that Opperman has overseen a number of important regulatory reforms, suggesting that "his greatest legacy will surely be the pensions dashboard".

"Whilst we have not always agreed with all of his ideas, we have never doubted his energy, determination and enthusiasm for the role and his clear desire to improve pension provision within the United Career," he continued. "We would like to offer him our very best wishes for the future.”

LCP partner, Steve Webb, also said that “after years of a revolving door for pensions ministers, it has been good to have a period of stability under Guy Opperman”.

“And he has made progress in some key areas, laying the groundwork for CDC schemes to be introduced in the UK, moving us five years nearer to pensions dashboards and getting pension schemes to focus more on how their funds are invested from an ESG perspective,” he continued.

However, Webb warned that the new minister will have much work to do, arguing that there has been "no progress" on the key area of boosting defined contribution (DC) savings rates, also raising “serious questions” about whether the new defined benefit (DB) funding regime is fit for purpose.

Aegon head of pensions, Kate Smith, echoed this, warning that "pensions can be a challenging topic, with many different angles".

“We hope there will be a smooth transition to the new Pension Minister, who will need to get up to speed quickly," she continued.

“The new Pensions Minister will have a lot on their plate with many issues vying for attention. Pension policy has been a hive of activity in recent years, and there’s still much unfinished business, but a new Minister will bring fresh thinking.

"Whoever gets the role, getting pensions dashboards over the line must be the top priority, nothing should be allowed to disrupt this.”

Broadstone technical director, David Brooks, also suggested that environmental, social and governance (ESG) issues, ongoing digitisation and rise in professionalisation will be “some of the big-ticket items for his successor to take forward.”

Adding to this, Hargreaves Lansdown senior pensions and retirement analyst, Helen Morrissey, said that the new minister will need to balance pressure to implement the 2017 auto-enrolment reviews with “sky high inflation putting pressure on people’s pockets today”.

“DWP has also been under increasing pressure with widespread issues of people not receiving their state pension on time or being underpaid," she continued.

"Some underpayments run into many thousands of pounds and stretch over several years. Whoever succeeds Opperman will be under pressure to fix these issues fast."

Indeed, AJ Bell head of retirement policy, Tom Selby, suggested that the next Pensions Minister will be entering the job “at one of the most challenging times in recent history”.

“Auto-enrolment faces arguably its biggest challenge, with rising prices squeezing household incomes and forcing millions to re-evaluate their finances – including their capacity to save for the long-term,” he said.

“Ensuring opt-outs are kept to a minimum will almost certainly be the main immediate priority for the next pensions minister. Over the medium-term the question of how to increase minimum contributions, without undermining participation, will need to be addressed.”

Aside from auto-enrolment considerations, Selby noted that the recent independent report into state pension age increases will be “a huge focus for DWP and the new pensions minister in 2023”.

“Recent data suggests life expectancy improvements have stalled, which should reduce the projected costs of paying state pensions to retirees," he continued.

"What that means for the state pension age will be a decision for government and, inevitably, one that will be influenced by politics as much as economics.

“It would certainly be a brave move to enter a general election on a pledge to hike the state pension age further or faster than previously announced.”

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