Lord John McFall, former MP and chair of the Work Retirement Income Commission, spoke to Pension Funds Insider(on 23 February 2011)about hiswide-ranging investigation into the UK's retirement savings crisis

With help from the industry, the commission, chaired by Lord McFall, is committed to release the review's initial findings, about how to reinvigorate occupational pensions by July. The final report is planned to be released at the NAPF annual conference which takes place in October. With just under nine months to review the system, does this leave enough time to not just analyse but to give constructive evidence-based solutions to the industry as well?

"The important thing to remember is that we are not reviewing the whole pension landscape," says Lord McFall. "Lord Hutton is looking at the issue of public pensions for the government, the government themselves are looking at reform of the state pension system, we are looking at the area of private pensions and workplace pensions and want to provide recommendations that will lead the way forward there.That is a big enough area for us, otherwise we wouldn't have the focus or the coherence and we would not be able to have the same impact."

Having been initiated by the National Association of Pension Funds (NAPF) does Lord McFall believe the commission will be able to focus on the employees as much as it will focus on the employers? After all, with rising longevity, low returns on investments and equally low state pensions, it is they who are facing up to what Lord McFall himself called 'a long retirement in poverty'.

"We will focus on the employers but will definitely also include employees and people in society in general," he says. "One of the things I found when I worked for the Treasury Select Committee during the banking crisis was the importance of engaging the views of the public. We need to get people's views so we can put those forward to help shape policy. Our investigation is very open and we put out a very wide call for evidence."

Unlike many other commissions there seems to be a desire to involve information from all stakeholders, large and small, public or private. "If you want to restore trust in general saving you need to engage with as wide a group as possible," Lord McFall explains. "That is why we said we are going out into the country to get the evidence from various people, but, it is also for this reason that we have decided to open up social media such as Facebook, Twitter and our website, just so that all information can come to us."

Crossover

There certainly appears to be a strong crossover with Lord McFall's work for the Treasury Select Committee, and with inside information about motives for saving and spending, he appears to be well placed to make a judgement on who is best placed to get more individuals saving for the long-term through the workplace. But he feels as if he is almost treading on old ground.

"I remember that in 2004 when I was chairman of the committee I initialized an investigation into the restoring confidence in long-term savings; there were at the time a number of recommendations that were taken up by the industry," says Lord McFall. However, since the financial crisis, there has been a catastrophic drop in confidence and he sees bringing that trust as part of the commission's overall goal.

With much change already in place in the UK, or on the verge of being implemented, accusations have been made that yet another review has only served to highlight the gaps that exist in the system. But Lord McFall sees his final recommendations adding further fuel to the debate and providing legislators with vital data that they can base new reforms on.

"There is a huge gap in public policy for private pensions, such is undoubted. But one thing I have learned is that policy should never be segmented, there should be an overlapping element. So while a number of reforms have been introduced, we are looking at a dynamic landscape so that we can recommend for the future and the shape of that future can be changed as a result."

"Government is always lacking in the quality of evidence that it gets. Remember that even today, decisions that are being made are going to affect people in thirty years time, it is already set in stone. That is why I have taken on this challenge to insure that we have the best informed debate for government."

azeevalkink@wilmington.co.uk