The Big Question

-

Roger Sanders OBE, managing director, Lighthouse GEB

No. Although I support any proposal that increases education and awareness in the pensions arena, I am troubled by the possibility of IBM having a vested interest in this project, quite apart from the issue of who pays for the service – surely not “the industry” again?

One only has to recall the enormous bill to the tax payer of the unusable central data system for the NHS, to reflect on how putting all ones faith in a single system to deliver positive consumer outcomes is like staring at a mirage – it looks real but upon closer inspection doesn’t exist, but everyone pays to find out!

This is not to say that the ”One Big Pension Pot” idea does not deserve our full support, particularly as there is clear evidence that, once the size of a pot exceeds a person’s annual pay, the level of public engagement increases dramatically. But access to a databank that pulls all of an individual’s pension pots together can best be provided either by pension providers themselves, pooling and sharing data for access on demand via any provider’s website, or by an industry initiative that physically transfers all of an individual’s small pots in to one big one.

-

Andy Cheseldine, consultant, LCP

Yes. The principle sounds really interesting. Anything that makes life simpler for the public has to be a good thing. But there will be lots of questions to be answered for it to be successfully implemented.

If there is an intention that individuals buy off this system like a corporate wrap then the FSA, or its successor, will want to know precisely how it operates.

There may be challenges in getting all of the providers’ technology to supply information all of the time. And how do you deal with things like with-profits where there are not daily valuations. Work would also need to be done around how discretionary increases in DB benefits are expressed.

But the ability to enact transfers through such a system sounds very attractive, particularly in light of the lack of access to advice that will exist after the RDR takes effect.

Some providers, like Resolution and Phoenix, would probably hate it.

But I am clutching at straws to come up with reasons as to why it would be a bad idea.

-

Pete Glancy, head of corporate pensions, Scottish Widows

Yes. We are very supportive of this type of proposal. Our goal as an industry has to be the drive towards improved outcomes for employees at retirement and this is best achieved through improved engagement, empowerment and informed choice for employees.

Giving employees the information they need regarding their current and legacy pension savings in one place, will allow them to better project what this means for them at retirement and critically to determine the level of additional saving that is required between now and their planned retirement date. The ability to show the costs and also the benefits, including guarantees, which apply to each legacy arrangement in an intuitive format would empower employees to take control of legacy pension pots, instructing a move to a better product where this is available.

In many ways this is a better solution than proposals being considered by Government,which bear the risk of movement of money into a pension product with higher charges or lower investment returns and therefore risk enforced consumer detriment.