PPI What should be the roles and objectives of the Personal - - PowerPoint PPT Presentation
PENSIONS POLICY INSTITUTE PPI What should be the roles and objectives of the Personal Accounts Delivery Authority and Board? Niki Cleal and Penny Beynon Pensions Policy Institute Nuffield Foundation, 02 May 2007
Niki Cleal and Penny Beynon Pensions Policy Institute Nuffield Foundation, 02 May 2007
www.pensionspolicyinstitute.org.uk
What should be the roles and
Accounts Delivery Authority and Board?
1
scheme
the Government’s proposed model
Agenda
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3-stage model, and identify differences and commonalities in views:
issues raised.
Research objectives
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and documents
Research methodology
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public confidence
Aims for setting up and delivering PAs
5
Broad agreement with scheme objectives
members and beneficiaries
should be in legislation
line with the scheme objectives, however these may not
be exactly the same
Scheme objectives: Stakeholder views
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target group
& honestly
charges that are fair between members 10.Ensuring that funds are invested in the best interests of members
Ten scheme objectives
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Three-stage model: Stakeholder views
Advisory Delivery Authority
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The Pensions Bill 2006 sets the:
do anything it thinks appropriate for preparing for the implementation of, or for advising on the modification of, any relevant proposals about personal accounts.
Advisory Delivery Authority
Executive Delivery Authority
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Government intends for:
executive powers
responsible for - procurement, project management, design and development of the investment strategy, engaging with stakeholders, marketing and comms, setting up arrangements for engaging with members.
Executive Delivery Authority
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Executive DA: Role options
Narrow Remit Broad Remit Hybrid Remit
Scheme set-up tasks Scheme set-up tasks Scheme set-up tasks
exempt schemes Advise on set-up for exempt schemes
enforcing employer compliance Advise on set-up for enforcing employer compliance
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Executive DA: Stakeholder views
In scope ‘Grey’ areas Out of scope
eg procuring services for administering PA, managing funds, developing IT systems
decisions
existing provision
should be set by either DA or Board
existing provision (eg designing exempt scheme test, registration process)
enforcement framework
policy decisions (eg defining target group, setting contribution cap)
scheme policy decisions
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Executive DA: Objectives
Narrow Remit Broad Remit Hybrid Remit
Scheme
Scheme
Scheme
deliver Additional
provide advice
Personal Accounts Board
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Government intends for:
framework for governing Personal Accounts
Board
management of the PA scheme, setting the strategic direction for achieving scheme objectives and investment strategy.
Personal Accounts Board
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Board: Role options
Narrow Remit Broad Remit Hybrid Remit
Scheme
Scheme
Scheme
schemes Advise on exempt schemes
employer compliance Advise on enforcement of employer compliance
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Board: Stakeholder views on role
In scope ‘Grey’ areas Out of scope
tasks eg fund management, contract management, customer service, monitoring scheme performance, information to members
setting the charging structure)
advice
enforcing employer compliance
schemes
decisions (eg changes to employer contribution limit)
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The Board needs to deliver scheme objectives, and additional objectives if it has a Broad or Hybrid remit
members and beneficiaries
prioritising the Board’s objectives
division of roles and responsibilities has been decided
Board: Objectives
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Government has opted for the PA Board to be a Non-Departmental Public Body
– it could also be a trust Occupational pension schemes are typically trusts:
fiduciary duty to members
scheme rules and trust law
Board: Legal status
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Personal Accounts Board will need to be accountable to:
Board: Accountability
Member and other stakeholder representation
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interests
Representation: Options
Transition options and issues
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Transition Options
A-Day handover Pre-2012 Handover Post-2012 Handover Parallel
responsibility from 2012. DA would: a) be disestablished & handover to the Board b) become the Board.
responsibility for all tasks prior to 2012. (ie set-up tasks & procurement duties that the DA had undertaken)
Personal Accounts scheme for the first 1-2 years of
Board
parallel with: a) different powers b) different remits.
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Conclusions
the best interests of its members
important to insulate investment decisions
Delivery Authority, and a narrow or hybrid remit for the Board
important through all phases of set-up and delivery of Personal Accounts
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Board?
member and stakeholder representation on the Board?
Authority, and if so how should they be framed?
Delivery Authority to the Board?
Issues for discussion
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role and remit for the Board?
Narrow Remit Broad Remit Hybrid Remit
Scheme
Scheme
Scheme
schemes Advise on exempt schemes
employer compliance Advise on enforcement of employer compliance
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interests
appropriate ways to ensure member and stakeholder representation on the Board?
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set objectives for the Delivery Authority, and if so how should they be framed?
Narrow Remit Broad Remit Hybrid Remit
Scheme
Scheme
Scheme
deliver Additional
provide advice
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to transition from the Delivery Authority to the Board?
A-Day handover Pre-2012 Handover Post-2012 Handover Parallel
responsibility from 2012. DA would: a) be disestablished & handover to the Board b) become the Board.
responsibility for all tasks prior to 2012. (ie set-up tasks & procurement duties that the DA had undertaken)
Personal Accounts scheme for the first 1-2 years of
Board
parallel with: a) different powers b) different remits.