- Retirement planning has become more complicated due to numerous policy changes, falling incomes, low investment returns, and rising life expectancy. - A new Pensions Commission is needed to rebuild consensus through broad consultation and tackle the challenge of inadequate retirement incomes. - The proposed new Pensions Commission would focus on defining savings and work targets, monitoring progress, deciding if new reforms are needed, and setting individual, employer, and government responsibilities for long-term retirement adequacy.

1. Towards a New Pensions
Commission
23rd February 2015
#pensionscommission

2. Welcome
Baroness Sally Greengross
ILC-UK
#pensionscomission

3. Welcome
Tim Fassam
Prudential
#pensionscomission

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

22. Q&A
#pensionscommission

23. Towards a New Pensions
Commission
23rd February 2015
#pensionscommission