Addressing delegates in her keynote speech at the National Association of Pension Funds (NAPF) Conference in Manchester Central, Segars said: “The current system clearly isn’t working. People are mystified by and fearful of the complexity of pensions. Yet the decision to save should be a no brainer.
“So I’m calling on you as industry representatives, pension providers, consumer groups, unions and employer groups to join us... A Britain that saves for its future is a Britain with a future, enabling people to enjoy a dignified, secure and fulfilling retirement.”
Segars announced the launch of an NAPF initiative to push for more transparency for employers and employees on charges around pensions and will hold a “high level summit” to devise a code of practice around the issue.
Addressing pensions minister Steve Webb, preparing to give his own speech to the conference after her, Segars said: “One of the exciting things for this Government’s plans for pensions is its commitment to reinvigorate occupational pensions. But the poll we have been running throughout the conference shows 53% [of delegates] do not think the Government is meeting it’s commitment.”
Separate NAPF research found 88% of fund members think the regulatory burden on pensions has “significantly” over the last three years. But the Government is set to take its red tape challenge, currently attempting to reduce regulatory burden on employment law, to the pensions field later this year. Segars pledged to “hold the Government to account” on this.
Turning to the looming issue of pensions auto-enrolment, set to affect employers in less than a year when they will be legally obliged to place all staff into a qualifying pension scheme and contribute at least 3% of employee salary, Segars said: “The world in which auto-enrolment was devised – full employment, booming equity markets, low inflation and wage rises – seems like a cosy fantasy now.
“We live in times of great economic turbulence. But the retirement fortunes of our citizens are at stake as well as our current prosperity... Let’s not kid ourselves that auto-enrolment is going to be an easy ride. Just ask the people who are going to be auto-enrolled.”
She drew on NAPF findings published earlier this week revealing 60% of employees will join an occupational pension scheme after auto-enrolment – but this is a drop of 25% since the Department for Work and Pensions asked the same question in 2007. Segars said the research reveals some employees are considering extending their debts to contribute to pensions and save for retirement.
She said: “I’m not sure that kind of robbing Peter to pay Paul is quite what we had in mind. Neither is it ultimately helpful to the individuals or society. But these are tough choices people are faced with.”
She issued another challenge – to Government and employers - on the communication to staff and complexities of pensions going forward adding: “These are problems we must tackle now. Goodness knows we’ve been talking long enough. Now we need to see some serious action... The message is clear. We must do better. In the new world of auto-enrolment we cannot allow the old way of doing things to become the way we carry on doing things. We cannot afford to get things wrong.
“We have to do better.”
