Session 2005-06 1 March 2006
The design of a National Pension Savings Scheme and the role of financial services regulation
The Treasury Committee has decided undertake a short inquiry into The design of a National Pension Savings Scheme and the role of financial services regulation in the Spring of 2006. As part of this inquiry the Committee expects in particular to consider the following issues:
1. factors affecting the operational costs for pension measures arising from the proposals by the Pensions Commission for a National Pension Savings Scheme and the timing of any Government or regulatory decisions relating to such costs;
2. approaches to the regulation of a pension measures arising from the proposals for a National Pension Savings Scheme and the possible role of the Financial Services Authority in such regulation;
3. the roles to be played by the Financial Services Authority and the Treasury in taking forward pension measures arising from proposals for a National Pension Savings Scheme; and
4. lessons for the design and implementation of pension measures arising from the proposals for a National Pension Savings Scheme from the regulation of, and decisions on charge caps for, Stakeholder Pensions.
The Committee will expect to consider certain matters relating to the feasibility of a National Pension Savings Scheme, but will be aiming to report its findings at an early stage and in advance of the White Paper if at all possible. The Committee will not therefore be examining some of the wider issues arising from the Second Report of the Pensions Commission in the present inquiry.
Request for evidence
The Committee wishes to receive written evidence by
3.00 pm on Thursday 30 March. Further details about the submission of written evidence are set out below. The Committee expects to hold evidence sessions in the latter part of April.
The Pensions Commission's second report was published on 30 November 2005. Following its publication, the Government has launched a consultation process, leading to the publication of a White Paper in the Spring which will "seek to lay the basis for a consensus on a lasting pension settlement".
A wider scale and longer term inquiry into the proposals contained in the Turner Report is currently being undertaken by the Work and Pensions Select Committee of the House of Commons. A press notice announcing the terms of reference of that inquiry was issued on 8 February and can be found on the Work and Pensions Committee website:
The Second Report of the Pensions Commission recommended the creation of a National Pension Savings Scheme (NPSS), with employees enrolled automatically, but retaining the right to opt-out. Total default contributions into such a scheme would be around 8% of earnings, made up of 4% contribution from the employee, 1% from the Government in the form of tax relief and 3% from matching compulsory employer contribution. The scheme should aim to deliver an Annual Management Charge of 0.3%.
Alternative proposals have been put forward by the Association of British Insurers, the National Association of Pension Funds, the Investment Management Association and the Pensions Reform Group.
In the last Parliament the Treasury Committee examined issues surrounding stakeholder products, price caps and the selling and advice process as part of its inquiry into Restoring Confidence in Long-Term Savings. The then Committee's Report on Restoring confidence in long-term savings was published on 28 July 2004:
NOTES FOR SUBMITTERS
Written evidence should be in Word or rich text format and sent by e-mail to [email protected] The body of the e-mail must include a contact name, telephone number and postal address. The e-mail should also make clear who the submission is from.
The deadline is 3.00 pm on Thursday 30 March 2006.
Submissions should be in the format of a self-contained memorandum and should not be of undue length. Paragraphs should be numbered for ease of reference, and the document must include an executive summary, ideally no more than one page long.
Committees make public much of the evidence they receive during inquiries. If you do not wish your submission to be published, you must clearly say so. If you wish to include private or confidential information in your submission to the Committee, please contact the Clerk of the Committee to discuss this. Please bear in mind that Committees are not able to investigate individual cases.
Personal information, such as address and contact details, should be provided separately from the body of your submission. You should be aware that there may be circumstances in which the House of Commons will be required to communicate information to third parties on request, in order to comply with its obligations under the Freedom of Information Act 2000.
Submissions should be original work, not previously published or circulated elsewhere. Once submitted, no public use should be made of the submission unless you have first obtained permission from the Clerk of the Committee.
The Treasury Committee is a Select Committee of the House of Commons, appointed to examine the expenditure, administration and policy of the Treasury, HM Revenue and Customs and associated public bodies. All Members of the Committee are Members of the Sub-Committee.
Rt Hon John McFall (Chairman), L, West Dunbartonshire
Lorely Burt, Lib Dem, Solihull
Mr Jim Cousins, L, Newcastle upon Tyne Central
Angela Eagle, L, Wallasey
Mr Michael Fallon, C, Sevenoaks, (Chairman , Sub-Committee)
Mr David Gauke, C, South West Hertfordshire
Ms Sally Keeble, L, Northampton North
Susan Kramer, Lib Dem, Richmond Park
Mr Andrew Love, L, Edmonton
Kerry McCarthy, L, Bristol East
Mr George Mudie, L, Leeds East
Mr Brooks Newmark, C, Braintree
Mr Mark Todd, L, South Derbyshire
Peter Viggers, C, Gosport