This year has been bursting with activity around pensions – what more could one want? Ah, well, thank you for asking...  

While DB surpluses were being eyed by sponsors, and once the lifetime pension model had been booed offstage, election fever took hold in the UK.  

Since Labour came to power in July, part one of a pensions review looked at investments, continuing the focus on private markets and UK assets. Politicians had been making soothing noises about adequacy being included in part two, but in a Christmas twist, it appears this has now been kicked into the long grass once again. Is this the final death-knell for the 2017 review recommendations? And is there still hope minimum contributions will rise at all? 

Adequacy is, let’s face it, clearly a lower priority in Westminster. If you were the chancellor promising growth, would you prefer to see voters’ money being spent now or in 30 years’ time? And if you’ve just been lambasted by businesses for imposing an unexpected tax hike on jobs, would you want to do something that feels similar in the near future?  

Perhaps chances for another look at pensions adequacy will be better closer to the next election, when higher AE contributions can be presented to voters as a plus. Much depends on whether that elusive growth makes an appearance, so that people feel they can actually afford to save more.  

Labour was always going to take a leaf out of Rishi Sunak’s big book of fiscal drag – why change a winning formula? Nearly all thresholds have now been put into the industrial-scale deep freezer. That’s not all. Closing tax ‘loopholes’, the Treasury has made unused pension pots subject to inheritance tax, in what is perhaps the only measure suggested by the IFS that the government has adopted. The Treasury is increasing its tax take from pensions while handily avoiding the wrath of public sector unions. It’s a win-win for Labour, after the BMA more or less forced it into U-turning on the lifetime allowance reintroduction. The tax changes made by Labour mean many businesses and individuals have cooled on the new government - temperatures could fall further next year, or relations could thaw, we will have to wait and see.

The proposals in the Mansion House consultations on DC and LGPS consolidation will seriously reshape those markets. The DC proposals are arguably more extreme than the LGPS ones, with default ‘funds’ potentially having to reach a minimum size of as much as £25bn to £50bn. Equally of interest to providers might be a proposal to ban differential pricing. Will this reduce profits or push prices up across the board? Comments please... 

Alongside these media-effective announcements, a number of other reforms are also in train. The new value for money framework has been proposed with a traffic-light self-evaluation system (and has already been criticised for being too binary etc). Will regulators walk the talk on comparison and value - or be walked all over by vested interests? 

The FCA is also undertaking a review of the guidance and advice boundary, consulting on the halfway house of ‘targeted support’. People could receive a recommendation about what to do with their pension based on limited information about them. Controversially, they could even be recommended specific products, while the question of redress could prove equally interesting. Are the proposals improving an untenable situation or introducing unacceptable risk? This one is bound to be divisive, but potentially transformative for outcomes. 

Pensions dashboards are also being developed, and developed, and... the hope is that they will reach consumers this decade, and one dashboard at least might, as the government has said the MaPS version will go live before its commercial rivals (perhaps this paragraph should have been in the ‘competition’ section). Pensions dashboards might be fun for an industry that is not spoilt with digital tools, but will they do what it says on the tin? Wait, what does it say on the tin again? 

The courts, every so often, drop a bombshell on the pensions world. This time, it’s in the form of Virgin Media v NTL Pension Trustees II. Will the DWP, or won’t it come to schemes’ rescue in the form of an override? Some lawyers now say public sector schemes could be affected too – perhaps that will speed things up in Westminster. If you have not found your s37 confirmation, you know what you’re doing over the holidays!  

WE HOPE YOU HAVE A RELAXING BREAK – NEXT YEAR WILL BE BUSY!