PLSA IC 24: 2024 even busier than 2023, Maynard says

Pensions Minister, Paul Maynard, has suggested that 2024 will be “even busier” for both politicians and the pensions industry, confirming that the government is looking to both launch, and respond, to a number of key industry consultations this year.

Speaking at the PLSA Investment Conference 2024, Maynard acknowledged that there is an "awful lot" going on in the industry, with "endless consultations", a number of which the government has been working to respond to.

"Now you may have thought 2023 was busy, 2024 will be even busier," he stated, "both for politicians for reasons that might be obvious to you, but also for consultation response writers."

Building on auto-enrolment successes

During his speech, Maynard stated that while auto-enrolment has been “transformational”, it is a "work in progress" and there is “much much more” to do.

"The architecture and the hidden wiring that lies behind auto-enrolment, in my view at least, opens up great avenues and scope for innovation," he continued.

“We're committed to expanding the benefits of auto enrolment to younger people and helping all workers save more for their retirement, and we intend to consult on the detailed implementation of these measures at the right time that we judge most viable.“

The government previously committed to consulting on the implementation of the new measures "as soon as humanly possible", but despite hopes this could be seen before the end of 2023, the consultation has yet to be launched.

When pressed on this issue by Pensions Age, however, the minister said that this is “utterly still a priority”.

"We have to take into account a range of factors, in terms of what's the state of the economy, how is cost of living doing? How are employees finding it?" he clarified.

"What you don't want to do is raise contributions and find vast numbers of people drop out - that would be counterintuitive and counterproductive, and that why I say the right time, in the right way.

"But I do recognise the importance in terms of addressing adequacy, and that's why it matters so much."

During his speech, Maynard also suggested that the pensions industry could be doing more to encourage savers to contribute higher amounts, stating: "You as an industry can encourage people to contribute more where they can afford to do so, because I think that does help."

When asked by Pensions Age whether minimum contributions increases is something that the government expects the industry to lead on, Maynard clarified that “it’s a joint effort”, emphasising however, that it "doesn't just have to depend on the government upping the minimum contributions".

“The UK pension system will always have to be joined up, the government can't do everything and the industry can do lots and indeed wants to do lots without the government getting involved necessarily," he stated.

"So it is a team effort, and I'm always happy to discuss with pension funds what more they can do to communicate with members on the benefits of even a small increase in contributions, as well as the fact that many employees go over and above that, the legal minimum as well."

Dashboards remain a priority

Maynard also stressed the importance of helping savers to make informed decisions, arguing that pensions dashboards are “critical in my view” in this area.

He stated: "They have the potential to change how savers plan for their retirement by allowing customers to view their pension information, including the state pension, all in one place online.

"I know that our collective commitment to delivering dashboards is shared across the pensions industry, so I urge all pension schemes and providers to get their data ready ahead of connection."

And the minister warned that whilst he may seem "cuddly" now, industry professionals "don't wait for me to come knocking at your door".

"If I have to come to your door when it comes to dashboards, you will not enjoy the experience," he joked.

Asked by Pensions Age about how the government is looking to prioritise work on pensions dashboards, especially given the amount of work facing the industry, Maynard said that whilst there has been a “hiccup” in the dashboards programme, following the 2023 pensions dashboards reset, “I’ve dealt with a few projects that have had hiccups and ups and downs, so I know what I'm looking for when I'm discussing this with the Pensions Dashboards Programme (PDP) and other officials".

"New chief executive of the Money and Pensions Service (Maps), Oliver Morley, is just as enthusiastic as I am to grip this and get it to a proper conclusion," he continued.

"I know that pension funds out there want to understand the drum beat of progress, and that that is important because that breeds confidence.

"So there will be guidance coming out soon and I think we will see a rapid acceleration of the programme before too long, and I'm confident it's on track for where I where I would want it to be."

Lifetime Provider Model?

Maynard also provided an update on the government’s recent call for evidence on the potential for a lifetime provider model, acknowledging that “there are strong views on the matter”.

“The feedback is in, the consultation has closed," he stated, confirming that the government would look to respond "in due course".

Asked about the potential timescales for a lifetime provider model by The Pensions Regulator (TPR) chair, Sarah Smart, Maynard suggested that more detail on this issue could be revealed at the Spring Budget in March, emphasising however that this is not something that could be done instantly, even if wanted, given the complex behind the scenes work required.

Maynard also reassured the industry that "one does not embark upon this lightly", acknowledging that this is a "complex and revolutionary change".

"So there is an important debate to be had, because whatever the outcome is, it illuminates different bits of the system and how they interact."

Work on CDC to continue

Maynard confirmed that work on collective defined contribution (CDC) remains on track, emphasising that he is keen to broaden the broaden the options have and ensure they have “meaningful choice”

“I'm pleased to see that TPR has authorised its first CDC scheme and I understand that scheme will launch later this year, but we also intend to consult on legislation later in the year to extend this to whole life multiple-employer schemes, including master trust," he stated.

“We've also been working with various organisations that are actively seeking right now to establish a multiproduct CDC scheme, once the new legislation is implemented.

However, Maynard admitted that "there is much more work to do to improve awareness of CDC's amongst both employers and individuals".

"The knowledge base is indeed low, and communication will be a challenge that will have to be overcome as part of designing any scheme. As part of my departments research program, we're currently developing the evidence we need to help inform the policy and those decisions," he stated.

Push to productive finance

The minister also provided updates on efforts to encourage greater pension investment in productive finance, emphasising his commitment to "make sure pension assets are working as effectively as possible without compromising the security of members".

He stated: "We want to enhance the growth potential of pension funds and make it easier for them to invest in a wider range of high growth companies to help improve returns for pension savers, grow businesses and help the UK economy."

Timing is everything

With so much work ongoing, the minister also stressed the importance of timing and industry engagement.

He stated: "Underpinning my approach is timing and sequencing. I met very many stakeholders over recent weeks and I understand that delivering these things effectively and sustainably, the lead in time, the sequencing and the safe delivery of the time scales is critical.

"It isn't just what I choose to say at lecterns, at the dispatch box in the Commons or in the media, it's the hidden wiring and plumbing that will make all of this work."

And, speaking to Pensions Age, Maynard emphasised that while there is an “awful lot going on”, a key message to the industry is “don’t panic, work with us and never be afraid to tell us when you think we're right and when you think we're wrong".

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