Pensions Expert Annual Conference: the challenges reshaping Britain’s retirement landscape
Industry leaders at the Pensions Expert Annual Conference debated ambitious government reforms, with opinion sharply divided on whether the changes go far enough to secure adequate retirement incomes for millions of undersavers
When The Pensions Regulator’s chief executive Nausicaa Delfas took to the stage at the Pensions Expert Annual Conference, her opening words struck a sobering chord: 4.6 million people in the UK are undersaving for retirement – more than the combined populations of London, Manchester and Liverpool.
Without intervention, she warned, “we face a generation facing a retirement it cannot afford.”
Held at the Pennyhill Park hotel in Surrey during the same week as the UK Budget, the conference brought together trustees, pension professionals, and policymakers to grapple with ambitious reform plans, consolidation pressures and the perennial challenge of delivering adequate retirement incomes in an increasingly complex landscape.
The reform agenda: ambitious or overwhelming?
The government’s reform programme dominated the agenda. When delegates were polled on their view of the government’s approach to UK pensions, responses were remarkably divided.
Some felt it wasn’t radical enough, others praised it as sensible and well-judged, while a significant portion saw it as either too ambitious or actively unhelpful. This split opinion reflected the challenges of reforming a system serving millions whilst balancing multiple, sometimes competing, objectives.
Guy Opperman, former pensions minister, offered a positive assessment of the current government’s direction.
“Their approach to pension reform and the work they’ve done in the last 18 months is good,” he argued, citing progress on scale in DC schemes, super funds in DB, and LGPS consolidation.
He also pushed back against critics of the 13-year-old auto-enrolment system, comparing it to a stroppy teenager that will mature over time, much as Australia’s system – now more than 30 years old – has done.
Yet Delfas was clear that success depends on execution, describing the Pension Schemes Bill as something that represents “a once in a generation opportunity” to course-correct the system.
She did, however, warn that implementation would be critical. Her priorities were unambiguous: improving governance, delivering value for money, and ensuring savers are well-informed about retirement choices.
The value for money battleground
Perhaps no topic generated more discussion than value for money. Philip Brown, Director of Policy at Nest, noted that while auto-enrolment has been successful to date, “how we look at contribution rates has to be looked at very carefully.”
The challenge isn’t simply increasing contributions across the board – low earners might actually over-contribute if blanket increases were imposed.
Opperman was more forthright, calling for value for money assessments to extend beyond DC into DB and LGPS schemes.
“It is frankly a scandal that some schemes in all three sectors are getting sub-performance returns, and the member has no idea,” he said. His vision: within five years, net performance metrics should be public across all pension types, creating transparency and accountability.
Catherine McFadyen from Hymans Robertson, speaking from an LGPS perspective, emphasised that while the local government scheme doesn’t face DC’s adequacy challenges, it still grapples with a significant gender pensions gap and the bandwidth constraints of implementing major reforms whilst managing day-to-day operations.
The UK investment question
The government’s ambition for pensions to invest more in UK productive capital sparked robust debate. When asked whether a lack of suitable opportunities was the main barrier, responses were nuanced.
RailPen’s Julia Diaz’s view was emphatic – namely that there were opportunities available, but many were turning to capital from aboard.
Wyndham North from the British Business Bank highlighted a stark statistic: in the US, around 70% of venture capital funding comes from pension funds, compared to just 10% in the UK. UK pension contributions to VC represent merely three to four percent.
The panellists identified several barriers: cost structures that DC schemes struggle to accommodate, lack of in-house capability to assess private market investments, and regulatory frameworks that have historically pushed DB schemes toward de-risking.
Yet proof of concept exists. USS has 25% of its DC default fund in private markets, with 12% in UK private markets. Nest has reached 18% in private markets, with 8% in UK assets.
Patrick Keesley from People’s Partnership emphasised that the market must shift from obsessing over cost to evaluating value. “Until we can change the market dynamic, I think that then allows us to consider a much wider portfolio of asset classes,” he said.
The Pension Schemes Bill’s focus on value for money, rather than simply price, could be transformative.
The governance challenge
Running through discussions was a recognition that better outcomes require better governance. Delfas announced TPR’s shift toward “prudential-style regulation” for professional trustee firms.
The goal: ensuring all schemes benefit from highly skilled trustees who meet professional standards.
Opperman advocated strongly for professional trustees, citing Australian evidence that they deliver better outcomes across multiple dimensions – not just investment performance but also stewardship and member relationships.
Yet this sparked debate about the value of member and employer voices on trustee boards, particularly in sector-based schemes like USS where understanding employers and members remains crucial.
As delegates departed the conference, the scale of the challenge ahead was clear. The pension system stands at a crossroads, with reforms progressing through Parliament that could reshape retirement provision for decades.
Success will require not just legislative change but cultural shifts in how the market values pension schemes, unprecedented collaboration between consolidating funds, and trustees willing to embrace more sophisticated investment approaches.
Delfas’s closing words captured both the urgency and opportunity: “Meeting these challenges will shape how we move towards a more sustainable pension system, and I know that together, we can ensure a higher quality of life for millions of people for decades to come.”
Whether the industry can deliver on that promise – whilst navigating political uncertainty, technological disruption and global economic volatility – will define the pensions landscape for the next generation. Based on the spirited debates at Pennyhill Park, one thing is certain: the journey ahead will be anything but straightforward.
Further reading
For more information on the event, visit the Pensions Expert Annual Conference website.
