Pensions remain prominent while backbenchers revolt
Pensions remain prominent while backbenchers revolt
Published: 15 May, 2007
Press day is here again, and despite the usual fatigue and eye strain, I can’t help but feel very privileged indeed, as my letter to you has practically written itself for the second month in row.
Last month, the chancellor’s Budget announcement confirmed that despite all the months and years of consultation it has forced the industry through, it only hears, and never listens.
Although HM Revenue & Customs has moved somewhat on its position towards pension term assurance – see page 4 – it is still being shut down.
The same goes for alternatively secured pension, and it makes me wonder how much time and effort, not to mention resource, has been expended in fighting an unnecessary battle with the industry and consumers over a process that would affect a relatively tiny number of individuals. Individuals who would still be contributing to the exchequer through inheritance tax or income tax when benefits are drawn. I hope it was worth it, but I fear it wasn’t.
Anyway, occupational pensions are currently at the forefront of Brown’s mind, thanks in part to a frosty reception to his announced augmentation of the Financial Assistance Scheme.
Only today during prime minister’s questions, David Cameron called for the government to amend the pensions bill to offer greater assistance to those who have lost their occupational pensions.
Tony Blair responded by saying that there would be no “unfunded commitment” of more help to those whose schemes went under between 1997 and 2005. He added that the “cruellest thing” the government could do would be to tell people it “can make that commitment and bail them out when it transpires we cannot.”
During the pensions bill debate, pensions minister James Purnell said: “The government should not write a blank cheque, but organise a remedy.”
But what could be crueller than offering something that you know makes two look like three and calling it a “remedy”?
A remedy it is, but of the kind peddled by mountebanks. And we all know how long they last – just long enough for those selling them to clear town.
Still, the government faces a tough time over this, with around 30 backbenchers believed to be prepared to back the opposition’s amendments to the bill.
And there’s more. The debate on the impact of the decision to abolish ACT relief (see page 5) is inseparable from this issue and there is plenty of life left in it yet. Who ever said that pensions were boring?
This issue has the first of a series of surveys looking at the life and pensions outsourcing market. This one surveys the attitudes of senior execs to BPO (see page 26).
As life offices in particular ready themselves for the new, fast-approaching DC world, we look at how systems will be used to service the occupational market (page 48).
Pádraig Floyd, editor