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The big question underpinning most things in 2019 is what is going to happen in relation to Brexit?
Are we really leaving the EU on 29 March? If so will it be with or without a deal and what will be the economic consequences as a result?
I feel certain we can count, in any scenario on at least some market turmoil and uncertainty for which pension funds will have to prepare and cope with as best they can.
Any current plans Ministers may have for pensions or tax legislation may also have to be reviewed.
"We may even be facing an emergency Spring Budget as well as an Autumn one later in the year."
The New Year sees the birth of the new Single Guidance Body (SGB). I would hope that, given the amount of time it has had to come together, the new body will be ready to hit the ground running insofar as pensions guidance at least is concerned. There is clearly a need to increase take-up of this free and independent service without sacrificing the quality provided by Pensions Wise/TPAS to date.
We now know that the cold calling ban is provided for in statute and will come into force imminently. It’s been a long time coming but we appear to have got there at last.
What is important now is that the ban and the potential consequences of breaching it are widely publicised not only as a warning to the would-be scammers but also for the benefit of the public at large to emphasise the risks they are facing and what they must continue to do to protect themselves.
We must also not kid ourselves that the ban is a complete answer to the problem of scamming. It will not prevent all such calls, e.g. those originating from abroad, and the scammers and fraudsters will be constantly on the lookout for even more devious ways to swindle us out of our money. We must all remain ever vigilant to a problem that is unlikely to fully go away.
"April and the start of the 2019/20 financial year will see the final piece in the auto-enrolment programme complete with the increase of total minimum contributions to 8 percent. "
Coming on top of last year’s hike, this could prompt an increase in opt-outs but given that enrolled members are now more used to pension saving through payroll I would not anticipate this will be too significant.
I would also hope and expect to see during 2019 more progress in facilitating self-employed people to save into a pension. This is a real problem with the numbers of unpensioned self-employed growing at an alarming rate. There has been some positive soundings of late from the government about “nudging” self-employed people into pension saving but they still seem reluctant to follow through with the Taylor recommendations to use auto-enrolment and the income tax collection arrangements for the purpose. We must continue to press for further action in this important respect.
We can look forward to further progress on the 2018 DB White Paper, always assuming of course there is space found in the legislative programme on the back of Brexit. The Paper made a number of proposals to better protect members’ benefits including an enforceable DB funding code, more powers for The Pensions Regulator (TPR) and a framework for consolidation of scheme operations. As there are already two new consolidators on the scene this has the potential to transform DB pensions and propel the ultimate move forward of more schemes into buy-outs.
Similarly now the blessing has been given by the government to Collective Defined Contribution (CDC) pension schemes, we can anticipate this new type of pension arrangement getting off the ground fairly quickly – first with Royal Mail and then with others that might be attracted to it.
It is also great news that a pensions dashboard will at last see the light of day later in the year. This is an important project which hopefully now has the full backing of the government and will help massively with assisting members keep track of their many and varied pension savings.
"The FCA has some significant reviews and other studies planned for 2019, not least in relation to its Retirement Outcomes Review remedies (investment pathways, cash defaults and actual charges information) and its on-going examination of the demand for, and debate, about DB transfer values and IFAs’ role in facilitating them."
The Pensions Regulator in turn under a new chief executive will continue to develop as a self-declared more proactive and tougher regulator, no doubt under the beady eye of the Work and Pensions Select Committee which has been more than a little critical of what it sees as the regulator’s inability to respond adequately to protect members’ benefits in a number of very high profile corporate failure cases.
Not least under a very busy change programme for the regulator in 2019 will be the completion of its authorisation programme of existing Master Trusts, the outcome of which I believe will see a significantly smaller number of Trusts operating in this market and being subject to much tighter regulation than previously. A very desirable change, in my view.
The Pensions Ombudsman is also contemplating a series of changes to his method of working to extend his jurisdiction and to provide for speedier resolution of cases without the need for a formal determination. This is all out for consultation at the moment and as some of the proposals will require primary legislation it is not certain how soon the new arrangements will come into force.
Finally let’s spare a thought for those poor souls administering occupational schemes who will probably have to spend an inordinate amount of their time this year “equalising GMPs” following the recent High Court ruling in the matter. A thankless task which will probably make little difference to the majority of their member’s benefits – but it has to be done.
This article first featured in Mallowstreet.