Pensions and Lifetime Savings Association comments on the Spending Review and Autumn Statement 2015

The Pensions and Lifetime Savings Association today commented on the Spending Review and Autumn Statement 2015.

DELAYS TO INCREASES IN AUTOMATIC ENROLMENT MINIMUM CONTRIBUTION RATES

Joanne Segars, Chief Executive, Pensions and Lifetime Savings Association, said:

“The delay to the phased increases in automatic enrolment contributions will save the Exchequer a forecast £390m in 2017-18 and £450m in 2018-19. We understand the fiscal pressures the country faces and also the pressures on business as a result of the new national living wage.

“This is, however, the second delay to phasing – following on from the amendment to staging and phasing in late 2011. The Government has to ensure that automatic enrolment proceeds as originally planned. There should be no further change to either the staging or the phasing timetables so that the right workers are included and they can begin to build up the pensions they deserve and will need.”

LGPS INVESTMENT REFORM CRITERIA

Joanne Segars commented:

“The publication of the criteria for pooling Local Government Pension Scheme (LGPS) investments, alongside the consultation on the backstop legislation and draft amendments to the scheme’s investment regulations, is welcome.

“We support the development of pooled investment vehicles that generate economies of scale and enable smaller LGPS funds to access new and novel investments. It is critical that the proposals for pooling help in the ultimate aim of the Scheme, securing members benefits. And they can only do so if these proposals improve the governance of the Scheme as a whole, and its investment in particular, so we welcome the specific inclusion of a ‘strong governance’ criterion.

“That said the timetable for submitting proposals is tight. We are committed to working with our members and the Government to ensure the outcome supports the long-term sustainability of the Scheme.”

LGPS INVESTMENT REGULATIONS CONSULTATION

Joanne Segars said:

“The Association welcomes the proposal to move towards a ‘prudent person’ approach to investment in the LGPS. The Association has long fought for LGPS investment rules to mirror those of trust based pension schemes in the private sector and we are pleased to see the Government has listened.”