ICAS policy positions on pensions

ICAS has the following policy positions on pensions:

1. UK government policy on pensions should be set with the long-term in mind. It should seek to achieve long-term stability for the UK pension system and cross-party consensus.


2. We support the Exempt, Exempt, Tax (EET) approach to pension taxation and advocate for a long-term approach to the setting of pension tax allowances, including the uprating of allowances by inflation. The UK’s approach to pension taxation should:
   • Include an approach to tax allowances which simplifies their application to both Defined Benefit (DB) pensions and Defined Contribution (DC) savings and doesn’t disadvantage DC saving relative to DB pensions.
   • Incentivise employers to contribute to employee pensions and incentivise employees and the self-employed to save for retirement.
   • Consider existing employment arrangements to avoid creating additional complexity which can be exploited by unscrupulous financial advisers.


3. We support a robust but proportionate legal and regulatory environment which encourages innovation in the pensions industry. Thus enabling the industry, scheme trustees and other fiduciaries to focus on providing pension savers with good outcomes in retirement. To achieve this, policymakers and regulators must be mindful of the differences between DB and DC, recognising that in future DC is going to be the pension saving option for the majority those working in the private sector.


4. Sustainability governance and reporting requirements, currently placed on pension schemes with assets of over £1 billion and providers of contract-based workplace pensions, should be kept under review by the UK government and regulators. This will ensure that lessons can be learned following the initial roll out of requirements in 2021 and 2022. The UK government and regulators should take a proportionate and less onerous approach to sustainability governance and reporting requirements which may, in future, be placed on smaller pensions schemes.


5. We would like to see a review and rationalisation of the annual reporting requirements placed on pension schemes which considers the separation of governance and investment information solely relevant to The Pensions Regulator (TPR) from the annual reports of pension schemes. Consideration should be given to the relevance of information currently prepared to ensure it meets the needs of its intended audience and that the cost of producing information, including audit and adviser fees, does not outweigh its value. Related regulations should be reviewed and updated to ensure that the reporting requirements are clear to avoid undue complexity resulting in a tick box approach to compliance.


6. We support lifelong access to financial education, starting in primary schools. Making financial education available in both primary and secondary schools will give children from all backgrounds the opportunity to develop good money habits. This will better prepare them for managing money throughout their life - benefitting them, their families and communities. Access to financial education at key points in a person’s life beyond their school years is also needed to support good financial decision-making. The implementation of pension dashboards provides risks as well as opportunities and people need to be able to understand the information provided by these dashboards. Key to this will be providing separate information on a person’s DB and DC pensions.