Newsletter 15 described how to find the Government's consultation paper on new pensions regulations and how to comment on it.  That consultation period is over.   For those interested in more than newspaper accounts of the responses, here are links to some of the written responses.  (There were also consultation "events" without formal documentation.  An anecdotal account of a couple of those can be found here.)

The reaction of the Trades Union Council can be found here.   Whatever you think of Unions, this one is valuable because it spells out mechanisms for areas where the Green Paper says too little.  One example is the question of what should replace the Minimum Funding Requirement, which the government has committed to abolish (and is fuzzy about its replacement).  Another is solvency insurance - protects the fund against company insolvency. Another is the Pension Protection Fund which would take on the assets and liabilities of discontinued schemes. 

There is an interesting appendix.  It is a graph showing savings rate and unemployment over time.  There is tendency for higher saving to be followed by higher unemployment; the correlation is strong.  It is possible to argue that this is cause and effect - greater saving leading to less consumption leading to unemployment.  Alternatively, it can be argued that the public is smart about knowing when unemployment is looming, and so saves more for the impending "rainy day".  The fact is, nobody knows very much about why people save, although there is evidence that fear is a factor.  (So too are incentives - pension schemes with an employer contribution have better take-up than those with no employer contribution.)

This response (linked to by GG on our message board) is from actuarial professionals  .  It also calls for a bigger state pension.  From members' point of view it presents a gloomy picture.  (£300bn shortfall in UK funds?)  It seems to suggest that members should take most of the pain from this at windup.  See if you can make sense of the statement "We do not believe that there should be a difference between solvent and insolvent employers, because of the possibility of company manipulation to avoid a proper funding obligation".  It appears to say that since insolvent companies are (necessarily) allowed to wind-up schemes without meeting their obligations to members in full then the solvent companies should also be allowed to!

The response from the Pensions Management Institution represents the views of the pensions industry as opposed to members of schemes.  It advocates a state pension "indexed in line with the growth in the economy".  (In practice that would probably be close to wage inflation - ie "restore the link".)  The general tone of this submission is close to the Pickering Report.  It still argues for Limited Price Indexation on pension earned post 1997 to be abolished, although the government has indicated that it will not follow that Pickering suggestion.  The tone is one of "leave it to us - take away all restrictions and companies will charitably run schemes that provide better pensions".   However, it doesn't go with Pickering on the matter of immediate vesting (ie joiners being in the pension scheme from day one).  The suggestion of immediate vesting has been widely welcomed but this document finds a reason against it.  On consumer protection the attitude is as you would expect from providers.  There is nothing about making the Pensions Ombudsman more effective.  The requirement for Member Trustees is disapproved of.  There is a suggestion that if Member Trustees are required by law the company should be allowed to hire "independent trustees" as fulfilling part of the the required quota of Member Trustees!  (One of the "independent" trustees on the board of IBM UK's pension trust is a director of an IBM company).  However, they do agree that what constitutes "fair and open" selection of Member Trustees should be decided by a regulator (as opposed to one of the Green Paper suggestions - that the company could appoint who they liked provided he/she was a member.)

The Work Foundation response is from an independent, not for profit, thinktank.  It is strongly critical of the Green Paper.  This is one of the few to challenge the government's view that it has no reason to promote final salary schemes over money purchase schemes.  "For the government to continue without a fundamental re-assessment of its policy is, in effect, to wash its hands of the already great, and accelerating, shift of risk by government and employers onto individuals".   There are statistics given on why basing policy on the proposition that people are at fault because their savings shortcomings will mean an inadequate pension is "unworkable".  It is concerned at the "low level of protection" for scheme members.

The Independent Pensions Research Group is a similar group of experts.  This response makes many of the same points as the Work Foundation does.

The response from the Confederation of Occupational Pensioners' Associations, an umbrella organisation that AMIPP belongs to, does not cover all aspects of the Green Paper but concentrates on issues of protection for consumers of occupational pensions (that's us).  It is strongly critical of the government for its indifference to these issues.  The first page is a synopsis - it portrays what COPAS regards as the overall issue; whether the government believes there is a "pensions promise" to be protected.

Here is the Pensions Ombudsman's Response on the technical paper.

No claim is made that the responses above are representative of all those the government received.  They are just a few of the responses available on the web.

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