Likening pensions to football, Spence & Partners' Kevin Burge explores which of the recent pensions initiatives will be promoted and which will be relegated next May.
Now that the football World Cup is over and it will be another four years before England fans can in turn be optimistic, pessimistic and then suicidal, it is time to turn our attentions to the Premiership. The so called 'greatest league in the world' (arguably only due to the overseas players that ply their trade in it) returns to centre stage.
This of course leads to a frenzy of opinions on who will win, who will be relegated and who will be also-rans. If you are a betting man you can get very good odds on Burnley even reaching the top half of the table let alone anything else.
My mind then turned to the world of pensions and which of the recent initiatives will be at the forefront (for promotion) next May and which will be consigned to the also-ran pile.
A guaranteed winner is the change on what you can do with your defined contribution (DC) pot; a popular decision and one that has surged ahead of others. The cap on charges is also destined to finish near the top of the 'like lists', along with the ability to cash in any small pension pots. Indeed all three of these are almost guaranteed to finish in the top three places. For those that follow football, it is the fourth place that causes the most debate, as it is likely to do here.
Will it be the ability to transfer your defined benefit (DB) pot over to your DC pot? Or is it the pot follows member (more likely to be in the relegation spots, according to the popular press). How about the defined ambition pension, or is it the collective defined contribution scheme that will jump in popularity over the winter time. And of course, there is always the one that comes from nowhere – now what can that be? How about a change in the Pension Protection Fund (PPF) rules to allow an increase in payment for all pensions?
Whoever gets the fourth spot (be it in football, or pensions) there is no doubt there will be arguments, discussions, debates which will fill the respective column inches for many months to come. And of course there is the potential for a change in government which will make life even more interesting for the season after next... like football, this will run and run...
Written by Kevin Burge, relationship manager, Spence & Partners
Kevin_Burge@spenceandpartners.co.uk
