Pensions minister Ros Altmann has launched a blistering attack on Hymans Robertson, accused the firm of publishing misleading research on the new state pension for the purpose of generating publicity.
Altmann has accused Hymans of ‘scaremongering’ for publishing details of how the new single-tier pensions, which reduces the state pension of many low income contracted-in workers by around a quarter, will impact different groups of individuals.
In a statement to The Guardian newspaper this morning, Altmann said Hymans had published the report, which sets out winners as well as losers, with the primary aim of generating publicity for a private actuarial firm.
Hymans has hit back at Altmann’s astonishing attack, saying it stands by its research, which has not been questioned by any other stakeholder in the pensions sector.
Altmann’s own communications campaign, launched on September 19 under the tagline ‘our state pension is changing’ included a statement that 650,000 women will be better off under the new rules, without any reference to the number of losers under the new regime. The DWP has refused Corporate Adviser Freedom of Information Act requests for details of the number of losers.
The Hymans report, covered in Corporate Adviser yesterday, argued that most people would be worse off under the new single-tier pension. It identified three key groups of losers – those whose foundation amount is less than the full single tier and who don’t have enough years left between now and SPA to get up to the full 35 years required under the new regime; those mainly contracted-in individuals who would have gone on to accrue more than the single-tier amount but who will be capped at £151 a week and those with contracted-out periods in the late 1980s and 1990s who are hit by a punitive indexation regime.
Altmann told The Guardian: “This ‘research’ has been produced for the primary purpose of generating publicity for a private actuarial firm. It is misleading and represents irresponsible scaremongering. Millions of people including women and self-employed workers stand to benefit from the new rules and around three-quarters of those who reach State Pension age in 2020 will have a higher State Pension than they would have done under the current system.”
Hymans Robertson partner Sue Waite says: “We don’t think we are scaremongering. It has to be the case that most people are worse off – the policy saves the government money in the long run.
“Some of the biggest losers are the contracted-in. You are going to carry on paying NI at the same rate as those who were contracted out, but will not build up any more pension while they will.
“There are many people who have been contracted in all their life who could well lose more state pension as a result of these changes than they will get back from being auto-enrolled.
“(Former pensions minister) Steve Webb has tried to defend the changes by saying you can’t compare what you would have got out of the old system in the future because it might have changed. But if that is the case how can anyone plan for their future?”