Pensions brain drain in Westminster worries experts
The general election has dealt a blow to the bank of pensions knowledge and expertise in Westminster. We have seen the departure of the Pensions Minister, the Shadow Pensions Minister, and the Chair of the Work and Pensions Committee, and the experts are concerned at this sudden and unexpected loss of expertise at a crucial time for pensions.
Last night we saw the departure of a huge number of pensions experts of all political persuasions. Steve Webb, the Pensions Minister, was one of the most shocking defeats, while Gregg McClymont, Shadow Pensions Minister, also lost his seat, as did Dame Anne Begg, the Chair of the Work and Pensions Committee.
More broadly, there was wealth of economic experience and knowledge wiped out overnight, including Ed Balls, the Shadow Chancellor, Danny Alexander, the Chief Secretary to the Treasury, and Cathy Jamieson, Shadow Economic Secretary to the Treasury.
Tom McPhail, Head of Pensions Research at Hargreaves Lansdown told AOL: "We have been spoiled for the last five years, because we have had some very engaged politicians in the pensions arena, who really understood the issues and devoted enormous energy to driving pensions policy. Of course Webb and McClymont were in conflict, but they both played vital roles and they both cared about the issues and took the time to understand them."
Before Webb took the helm, he highlights, there was a "revolving door" of ministers presiding over pensions, and constant change in policies, which caused uncertainty and insecurity in an area that needs to be stable enough to enable people to plan for their future.
There are concerns that a return to a period of uncertainty and change would do more damage. Already the industry is worried. Richard Parkin Head of Retirement at Fidelity Worldwide Investment said in a statement "Any future pensions minister must maintain the new freedoms and pension saving must remain attractive for all"
However, as McPhail points out, the loss of well-known experts does not mean new MPs don't bring knowledge of their own. There are MPs whose backgrounds look promising. Notably former pensions manager Richard Graham has been elected, along with former fund manager Mark Garnier and former financial services lawyer David Gauke.
McPhail adds that pension expert Ros Altmann is also in the House of Lords, so could be 'reversed into government' in some role. He says: "There are people who understand the fundamentals that the government can call on. Whether they end up in the right departments remains to be seen."
In the midst of change
At the very least, there are concerns that bringing in a raft of new personnel is going to take a while to bed in. McPhail described it as having to take a few steps backwards before we can move forward again.
And this isn't a good time to be going backwards - in the middle of some of the most dramatic changes to pensions in living memory. McPhail says: "There is still work to be done on auto enrolment, pension freedoms and the state pension. The new pensions minister is going to have to get up to speed very fast."
In future, the experts hope that this kind of sudden brain drain can be prevented, with the introduction of an independent pensions commission. McPhail says he would like to see this established as soon as possible, and it's something that the National Association of Pension Funds, the Association of British Insurers, and the TUC have all called for recently.
This result would seem to make it even more of a priority, which would mean yet another burden for the new Pensions Minister to grapple with.
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