Adair Turner's Independent Pensions Commission represents something of a turning point, not for its ...
Adair Turner's Independent Pensions Commission represents something of a turning point, not for its contents which are hardly novel, but for the political and press reaction to it. Turner's work is the latest in a long line of research to state the obvious: people are not saving enough for retirement. But this time around the news coverage suggests pensions are finally going to be treated by the politicians as being of importance - similar to health, education and law and order.
With pensions appearing on the front pages of every paper in the last few weeks, the Commission has finally achieved what its many predecessors could not: bringing retirement planning into the mainstream.
The current political currency of pensions is obvious from the message coming down from the very top, with Tony Blair talking about giving people more options on saving for retirement and working beyond the traditional age of 65 as a core part of Labour's third-term policy in a speech last week.
Even the Conservative Party is looking to get in on the pensions act, despite its policies on taking unclaimed money in bank and building societies to make up shortfalls incurring the wrath of these industries' unconsulted trade bodies. In essence however, beyond the reams of facts and figures in the report, its actual conclusions are not particularly revolutionary.
Faced with an increasing proportion of the population aged over 65, the four options in the report are blindingly obvious: pensioners will either become poorer relative to the rest of society, taxes and national insurance devoted to pensions must increase, savings must rise or people will have to retire later. With the first obviously unattractive on several levels, Turner said any move forward will likely involve a combination of the other three.
The real work of Turner's Commission will be to translate all of this into recommendations palatable to politicians and the public alike.
On compulsion in particular, which consensus suggests will form some part of the solution, research has already shown widespread dislike of this measure, with support falling away as soon as people realise it will affect them materially. In addition, if people are forced to commit part of their earnings to private schemes, surely there must be additional responsibility for providers to offer decent pensions products.
After all, why should investors be forced to put hard-earned money into pensions linked to underperforming stock market balanced funds? With many investors traditionally shoved into such default funds, this also brings into focus the huge role advisers will have to play if private pensions do become compulsory.
Several pension providers are broadening their pension fund ranges, with the onset of open architecture and third-party links, but until every scheme can offer top-quality links, compulsory private pension saving faces a further hurdle.
Now pensions are firmly on the political agenda, it is vitally important advisers lobby effectively to get their point of view heard.