Some of our older followers, or those with a keen interest in political history, will recall that Ted Heath, then Prime Minister of the UK, asked exactly the above question in the General Election campaign of 1974. Unfortunately for Mr Heath, the reply from the electorate was; “Not you!”.
But the question could be equally applied today in the world of workplace pensions, and in particular the application of the Retail Distribution Review (RDR). For on this area, there does appear to be something of a disconnect between The Department of Work and Pensions (DWP), and The Financial Services Authority (FSA), both of which have a role to play in workplace savings.
The DWP is responsible for all things pensions in the UK. Indeed their ‘about us’ page says:
“The Department for Work and Pensions is responsible for welfare and pension policy”
Whereas the FSA, who are in the reporting line of The Treasury rather than the DWP, are responsible for financial regulation. And their ‘about us’ page states:
“We are the independent body that regulates the financial services industry in the UK.
So what’s the problem here?
One particular issue, Consultancy Charging (the expected replacement to commission options from the 1st January 2013), seems to have fallen somewhere between the two departments. And this issue has some real relevance to employers in the UK, given that it impacts on the cost of providing a pension scheme.
For those not up to speed on this, frankly rather techie, story, you can probably gain some good generic background from the two links below. The first is an article I penned for Corproate Adviser magazine for November, the second an update on the issue from the blog in November:
https://www.jelfgroup.com/blog/2012/11/as-i-was-saying/
So why am I writing about this again, when a more sensible individual would be concentrating on getting ready for the festivities?
Well, although this is an FSA created issue, the DWP now seem to have become increasingly involved as well. Following the letter from The Minster (in the second link above) the DWP have now opened an informal consultation (to which I was asked to contribute) on this point as well.
But I have to say that whilst the DWP consultation is well intentioned, I am not really sure what it can achieve.
Should the DWP find that Consultancy Charging is a good thing, then they are still likely to be overruled on this by the FSA who give the impression of firmly believing the opposite.
Alternatively, if the DWP also find against Consultancy Charging, then there is no real change from the current FSA position (albeit the legislation might be tightened further).
Who Governs on this point? To be honest, it’s kind of hard to say.
But either way, and on balance, an 11th hour change to the current FSA position would appear rather unlikely. Will continue to monitor this of course.
See you all in 2013.
Best regards
Steve
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