This SPP response explains that the PPF continues to levy £100m annually from the pensions industry which it readily admits it does not expect to ever need given it has a multi-billion pound surplus. Existing legislation prevents any future increases beyond 25% but the levy could be immediately reduced to zero whilst legislative change is sought (either now or in the future).
The SPP supports many of the proposals being put forward within this consultation and the overarching objective of improving Value for Money but is concerned about the volume of data that the proposed framework will require providers to collect and communicate, which in some cases appears disproportionate. There are many improvements that could be made to these proposals, as we have sought to constructively explain in this response.
Amongst other productive finance issues, this response highlights that the SPP agrees that scale can deliver improved investment but that there are risks, which must be guarded against; that legislative change is necessary to better facilitate consolidation and that for the LGPS, asset pooling has been successful but there is more to do. Read on for further information...
The SPP members report widespread use of the PSIG Code of Good Practice and that the Pension Scams Industry Forum is useful. However, greater clarity on PSIGs remit and activities is essential and SPP does not believe that now is the right time to consider funding arrangements.
The SPP highlights the potential for unintended consequences for pension professionals and recommends exempting certain pensions work form the proposed new regime.
The SPP strongly supports the ambition to deliver a Pensions Dashboard but there is a risk to its success if the information consumers are presented with on first usage is limited and if they are provided with little to support their decision-making beyond signposting.
The SPP broadly welcomes these proposals because of the additional flexibility that they will provide but there is a risk that they could lead to circumstances where schemes enter the PPF when they could otherwise have secured a higher benefit in the market.
The SPP welcomes the desire to make returning surpluses to employers easier for those that wish to but the proposals are not without risk; we have serious reservations about the implementation of a 100% underpin from the Pension Protection Fund (PPF); and whilst a public sector consolidator has many potential benefits, the precise rationale for such a consolidator remains unclear.
The SPP believes that much of the information requested by TPR in the Statement of Strategy is pragmatic and supports the use of a standard template. However, TPR should consider making changes that better reflect the needs of particular types of scheme and requesting less information.
The SPP believes that the FCA’s proposal to create a new targeted support regime, which sits between guidance and regulated activity, could create an opportunity for firms to be able to better support consumers but only if properly considered and carefully implemented.