The Friday Takeaway: Building resilience for the UK's pension system
This week I am reflecting on a fascinating two days of debates and discussions at the DG Publishing Private & Public Pensions Summit.
Throughout the conference, expertly chaired by John Harrison , experts from the worlds of defined contribution, defined benefit, local government and institutional investment explored some of the biggest issues facing the UK’s pensions industry.
We heard from Nausicaa Delfas , chief executive of The Pensions Regulator , about its shift to a prudential approach as schemes get larger and more systemically important. Pensions minister Emma Reynolds gave a video address reminding us of the ambitious scale of the government’s planned reforms.
“We are entering a different era of regulation which protects, enhances and innovates in savers’ interests, so that all savers – from every walk of life – can get good retirement outcomes from pensions.” - Nausicaa Delfas, TPR
Paul Johnson , director at the Institute For Fiscal Studies , gave an eye-opening assessment of the public finances and the government’s aims to address shortfalls, while former pensions minister Guy Opperman and others debated the benefits and drawbacks of copying the Australian pension system.
Towards the end of the conference, delegates watched a short video put together by Phil Triggs , tri-borough director of treasury and pensions at Westminster City Council.
It was ostensibly a whistle-stop tour of major national and global events that had taken place during Phil’s 25 years working in the Local Government Pension Scheme, but as one person later pointed out it was also a useful demonstration of some of the significant challenges faced by pension schemes in that same period.
Resilience has been key to delivering on pension promises through periods such as the global financial crisis of 2007-09, the dotcom crash and the pandemic. And, as delegates and panellists discussed over two days at Pennyhill Park in Surrey, that resilience will be called upon again in the months and years ahead.
Whether it is resilience to protect members’ benefits against a changing climate, resilience against rising geopolitical tensions and uncertainty, or resilience in the face of new regulatory (and political) demands, it will be needed.
What was most encouraging from this week’s conference was the air of positivity despite the challenges ahead. There will always be disagreements on some issues but collaboration and co-operation seem set to win out as everyone works to get the optimum outcomes for pension scheme members.
Have a good weekend.
Story of the week: Question marks over government's private markets data
Increasing pension schemes’ allocations to private markets may only boost pension pots by 2% at most, according to the government’s own analysis. Analysis by the Government Actuary’s Department found that raising pension schemes’ exposure to private markets “may deliver slightly improved outcomes to members”.
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Appointments: Guy Opperman joins Smart
Former pensions minister Guy Opperman - who lost his seat at the general election in the summer - has joined Smart Pension as a senior adviser.
Elsewhere, Helena Morrissey is to become chair of Barnett Waddingham , the pensions minister has made a series of appointments to the board of Nest pensions , and Mark Cliff will take over as chair of the Fidelity International master trust next year.
Pensions Expert's UK Investment Summit, 16 January 2025
With the government having set out a range of measures and proposals to increase capital flowing into UK infrastructure and unlisted companies, focus is turning to where these investment opportunities will come from.
To facilitate these conversations, Pensions Expert is hosting the UK Investment Summit in January in London, bringing together representatives of government bodies, pension providers, institutional investors, asset managers and others to discuss how to invest in domestic assets for the benefit of pension savers and the economy.
Visit our dedicated website for more information and to register your interest.