Towards a New Pensions Commission
- 1. Towards a New Pensions Commission 23rd February 2015 #pensionscommission
- 4. Towards a new pensions commission Ben Franklin ILC-UK #pensionscomission
- 5. Consensus revisited The case for a new Pensions Commission Ben Franklin, Senior Research Fellow, International Longevity Centre @ilcuk @bjafranklin
- 6. The case for a new Commission • Policy change • Progress since the last Pensions Commission • Continued macroeconomic uncertainty • Rising life expectancy
- 7. Policy change… • Auto-enrolment • Changes to State Pension: – SPA – Move towards flat rate • New pension freedoms • Extending working lives • Public sector pension reforms • Long-term care funding reforms
- 8. Progress since the last Pensions Commission …saving more? Yes but from a low base Active members of occupational pension schemes, 1953 to 2013 (millions) Source: ONS
- 9. Progress since the last Pensions Commission
- 10. Progress since the last Pensions Commission Probability of meeting target replacement rates at 8% contribution levels
- 11. An economic recovery unconducive to saving
- 12. An economic recovery unconducive to saving
- 13. An economic recovery unconducive to saving
- 14. Continued rising life expectancy
- 15. Continued rising life expectancy
- 16. Continued rising life expectancy Projected changes in the State Pension age over the next 50 years State Pension age Legislated Young age Central Old age 66 2020 2020 2020 2020 67 2028 2028 2028 2028 68 2046 2036 2031 69 2049 2034 70 2063 2037 71 2040 72 2045 73 2051 74 2057 75 2064 Source: OBR Year within which the rise is fully implemented Population variant
- 17. Summarising the case for a new commission • Retirement planning is difficult with numerous moving parts to consider. • It has been made more complicated as savers have faced constant policy change. • Combined with the perfect storm of falling real incomes, low investment returns and rising life expectancy. • A new Pensions Commission is needed to rebuild consensus via broad consultation and tackle the challenge of income inadequacy in retirement.
- 18. A blueprint for a new commission • Central focus on ensuring adequate retirement incomes for the long term. • Based on consensus-based policymaking. • Specifically focus on: 1) defining target outcomes for savings and extending working lives. 2) developing a mechanism to regularly monitor progress 3) deciding on whether new policy reforms are needed. • Commission should set out the rights and responsibilities of individuals, employers and government with respect to long term retirement income adequacy. • Report to Secretary of State for Work and Pensions, Chancellor and Prime Minister. • Headed by a group of 4 experts from; academia, charity sector, industry and employees. • Not become a permanent body. • Be set up immediately after the election but not seek to make recommendations until 2017.
- 19. Many thanks Ben Franklin Senior Research Fellow International Longevity Centre - UK benfranklin@ilcuk.org.uk 02073400440 Twitter: @ilcuk @bjafranklin
- 20. Rt Hon Steve Webb MP Minister of State for Pensions #pensionscomission
- 21. Graham Vidler National Association of Pension Funds #pensionscomission
- 23. Towards a New Pensions Commission 23rd February 2015 #pensionscommission