Pensions White Paper

So here we are with the long awaited white paper. The executive summary is 42 pages long. Lets summarise the summary and follow their headings and paragraph numbers.

Progress since 1997
1-4.
Until 1997 pensioners were all miserably poor and regularly froze to death in mid -summer. After 1997 everything got a lot better. There is no explanation of why things suddenly got better just then.

Improving the pensions system
7.
The government spends lots of money on pensions. Why arent you grateful?
The state second pension (S2P) was introduced in 2002. This makes lots of people better off. Unfortunately it is so complicated no-one knows that.
Stakeholder pensions have been introduced. Middle class grandparents are immensely grateful for this as they can now set up tax-efficient savings schemes for grandchildren - and be sure the litte buggers cannot spend it until they are too old spend it on alchopops, no, they will spend it on claret.

8.
"The Pensions Act 2004 has improved security and confidence for occupational pension scheme members. " ...
9.
"The Pensions Regulator will help to protect members’ benefits"
Priceless. This is newspeak for

• Occupational pension scheme members will not have noticed any changes at all
• There is increased job security in the Pensions industry as what was touted as Simplification rapidly became Complication
• When a Scheme falls into the PPF, all the advisors are able to charge the fund at their full hourly rate for whatever they do...
  
• There is increased confidence in the Pensions industry as we know that this government only makes more complicated regulation - producing bigger fees for us. We made a packet out of the 6 april changes. We will make another packet out of the Age Discrimination changes in December.
• The increasing costs of running Pension Schemes cause them to be shut down. The number of people in pension scheme are dropping by around 200,000 a year.
  

14.
People live longer and will continue to do so.
One thing we all know is that in common with most other predictions, the government will have underestimated the increase in mortality.

20.
People are not saving enough for retirement.
Not because they are not paying enough of course - it is not their fault. It is all because we are all so much better off that they will feel poor.

21.
Occupational pension scheme membership is dropping because people live longer and markets dropped in the 90s.
Absolute rubbish. At the end of the 80's the government placed a cap on the salary that could count for a pension. The directors had larger salaries and so were not so concerned about paying money into the pension scheme because they would not benefit.
The government also passed legislation that forced the company to state the defecit in the accounts. If there was a surplus, it could not be kept for bad years.
Later on the government mandated that any defecit be paid off very quickly.
I am not so sure that other things like share options or contingent director bonuses are exposed to the same level of scrutiny.
Not surprisingly, company directors decided that they are not there to run a pension scheme.

Proposals for reform

Exactly as trailed. The document could have started here.

More later.