Improving pension adequacy tops PLSA policy priorities
13 January 2022
Advocating for a policy regime under which most people are likely to have an adequate income in retirement, with a specific focus on expanding the scope and level of automatic enrolment, is the top strategic policy objective for the Pensions and Lifetime Savings Association (PLSA) in 2022.
The Association’s policy priorities are reviewed annually by the PLSA Policy Board, a body comprising experts from a broad cross section of the PLSA’s membership, with responsibility for setting the policy agenda and positions, ensuring the PLSA is tackling the issues that matter most to its members.
Later this year the PLSA will produce a new report on the important issue of pension adequacy and the reform of automatic enrolment. In the meantime, it will be campaigning for the Government to follow through on its commitments made after the 2017 Automatic Enrolment Review to set a timeline to introduce pension saving on the first pound of salary, rather than only above the lower earnings band, and for AE to apply to 18- to 21-year-olds by the mid-2020s. The Association will also argue for the adoption of the PLSA’s vision in Hitting the Target for increasing contribution levels to 12% by 2030, with a 50/50 split between employer and employee.
In addition to the strategic priority of pension adequacy, the PLSA Policy Board has also targeted its top five regulatory policy areas of focus:
- Pensions Dashboards – The PLSA will seek to help the industry prepare for its new obligations to provide data to Pension Dashboards and ensure that the consumer protection regime is appropriate. Importantly, the PLSA will also articulate industry needs to regulatory bodies, related government sponsored organisations and other stakeholders.
- DB Funding Code – The PLSA will continue to represent the pensions industry in responding to TPR’s proposals for a reform of the funding regime for DB pensions, seeking to ensure the regime adopts a flexible approach to DB schemes that are not maturing.
- Responsible Investment & Stewardship – The PLSA will play its part in supporting measures adopted at COP26 and will follow through on joint industry initiatives with the Investment Association on Stewardship, and with the Investment Association and the Association of British Insurers on TCFD. The PLSA plans to continue to produce guidance and support to schemes on responsible investment and stewardship issues.
- Local Government Pension Scheme (LGPS): State of the Nation – The PLSA will complete and publish its research into the challenges facing the LGPS, including those related to the complex legislative and regulatory regime under which they operate, and propose follow-up action.
- DC Decumulation – The PLSA will be campaigning for the adoption of our Guided Retirement Income Choices (GRIC) proposals which aim to help members of DC schemes when they draw their pension. The proposals include introducing a statutory obligation on schemes to support members via signposting to suitable products, with appropriate and stringent standards for governance and effective communications.
Outside of these six targeted priorities, the PLSA will also undertake a wide range of other policy work, including responding to a large number of Government and regulatory consultations and various PLSA initiatives such as the promotion of the Retirement Living Standards, the maintenance of the Pension Quality Mark, and – with the Investment Association and the LGPS Scheme Advisory Board - the Cost Transparency Initiative.
The PLSA has also recently announced that recruitment is underway for industry experts representing PLSA member organisations to join the Policy Board and the various Policy Committees that help feed into policy decision-making. The deadline for applications is Monday 31 January 2022. To find out the criteria for selection and how to apply, visit the PLSA website.
John Chilman, Chair, PLSA Policy Board, said: “Through drawing on the wide expertise and insights of Policy Board members, we have developed an ambitious and broad work programme for 2022, which aims to meet the needs of our diverse pension scheme members, across the defined benefit, defined contribution, master trust and LGPS landscapes.”
Nigel Peaple, Director of Policy and Advocacy, PLSA, said: “This year we expect Government and Parliament to be undertaking some longer term thinking on automatic enrolment and the right regime for pensions. We will be making the case that pensions can play a key role in their levelling up agenda. As with last year, we expect a wave of further regulatory initiatives, not least on DB funding, pensions dashboards, and TCFD reporting.”
Mark Smith, Senior PR Manager
020 7601 1726 | [email protected]
Steven Kennedy, Senior PR Manager
020 7601 1737 | 07713 073024 | [email protected]