Almost every time I write a blog about employers getting more proactive on workplace pensions, such as having a governance committee or reviewing default investments, I get comments from readers saying this is too much to expect from already overstretched, busy employers.
I understand their concern.
Except for those big enough to have a human resources department to pick up the pensions detail, the vast majority of employers find any extra requirements a responsibility too far.
We, as a country, did this with defined benefit pensions. They started off being relatively straightforward but as the years went by, in an effort to reduce risks, they were slowly strangled with red tape. They are now all but dead.
So while I welcome the Office of Fair Trading report that came out yesterday, and agree that, as a nation, we need to save more into decent-quality retirement plans. We also need to think carefully about who will pick up the responsibility for ensuring this happens.
Put too much onus on employers and they will recoil into doing the minimum they have to under the law. Not because they want to, but because they have to put their business first.
Simplicity and transparency much be the watch words for whatever we put in place to ensure that everyone saving into a pension is getting a fair deal for a fair price. That way, all employers and employees have a better chance of quickly getting to grips with their pensions deal, before getting back to their day jobs.
That said, the work done in recent years by both industry bodies and providers does mean that most workplace schemes are now pretty decent. It is only some older and some smaller schemes that need a bit of a kick.
One day, consumer awareness on pensions will be much greater in the UK (as it is in is many other countries). Let’s hope that when that happens the reaction will be to thank us pensions geeks for getting the pensions product right way back in 2013.
Debi O’Donovan
Editor
Employee Benefits
Twitter: @DebiODonovan