DOD’s blog: my week in benefits

Debi O’Donovan’s musings on the key events of 5-10 January 2013

Why are we waiting – it’s getting aggravating (as we used to say at school).

Two years on from the pensions green paper there is still no sign of regulations to bring in a flat-rate state pension (proposed at £140 a week).

Until we have a flat rate, those at the bottom end of the earnings scale will see little point in staying opted in under auto-enrolment. And who can blame them, when means testing is still in place.

Some hoped we would see a pensions white paper this week (it was promised last autumn). Instead we got the mid-term review from the government which, by its very nature, contained nothing we didn’t know already.

See: Review targets childcare and pensions

Come on, Mr Webb. You want a flat rate, we want a flat rate – what’s causing the jam up?


On a more positive note were the proposals put forward by The Pensions Regulator (TPR) on Wednesday afternoon to improve the quality of defined contribution (DC) schemes.

See: Regulator consults on DC pensions

This was a good start, but focussed only on trust-based DC. So the really interesting piece will be the work TPR does with the Financial Services Authority (FSA) to set standards for contract-based DC plans.

These are the fastest growing type of schemes, but have long been poor cousins to trust-based schemes. Many do not offer the best possible default investment choices, reasonable charges or good contribution rates to staff. If they are not held to higher standards millions of employees will be very let down in decades to come.

Let’s hope TPR’s work with the FSA to raise the standards of workplace pension hits the mark – we will find out when the consultation is published in the spring.