first_imgThe Lifetime ISA announced in Wednesday’s UK Budget introduces a rival savings vehicle to the traditional pension fund. Jonathan Williams argues that the brand recognition of the Lifetime ISA risks undermining the success of auto-enrolmentFor months, the UK pensions industry has been preparing for chancellor of the Exchequer George Osborne to overhaul pension taxation, switching from a system whereby savings are taxed upon drawdown (EET) to one where you get taxed when paying in (TEE).While Wednesday’s Budget did not see these changes materialise, the proposal for a Lifetime ISA potentially heralds the beginning of a much more dangerous trend – one that continues to place the onus on the individual to act, while undermining a decade-long consensus about the need for ‘inertia’ to get people saving into pensions.The success of auto-enrolment is beyond doubt. As the Pensions Regulator (TPR) and the Office for National Statistics show with the release of each new batch of data on pension saving, millions of workers are now putting aside money for retirement. The numbers show 6m new savers compared with 2012, according to TPR’s most recent report. The government has been vocally backing the reforms, first with their terrible (and terribly catchy) workplace pension rap, and more recently through a campaign that regularly sees a 2-metre tall furry purple monster called Workie smiling down from the side of a bus, or lumbering around inner-city parks, reminding people to save into an occupational pension.So most people would have assumed, based on the evidence, that the government supported auto-enrolment, and the associated pension providers, as the best means as saving for retirement. So why does the chancellor seem intent on questioning their role, and, in effect, stabbing Workie in the back?The end of the Turner consensusThe answer is an ideological one. The political consensus carefully built from 2004 onwards by the Turner Commission, which recommended auto-enrolment as a way of forcing the hand of uninformed consumers, has been crumbling since its 10th anniversary.The 2014 Budget saw the revolutionary pension freedoms introduced, supposedly without the prior knowledge of the then-pensions minister Steve Webb, whose own proposals for collective DC akin to the Dutch system were crippled by a member’s ability to draw down pensions savings from 55 onwards.The ability to draw down money as members wished, without needing to buy an annuity, placed the emphasis on an informed and educated individual to act, and to navigate the complex world of finance associated with it by finding a drawdown product. As David Blake, an academic at the Pensions Institute recently noted, the changes effectively saw members brought into an institutional system through inertia, only to be thrown back into the retail market when they had to make decisions that would impact their finances for the rest of their lives.This focus on the individual operating within the retail market is set to continue with the introduction of the Lifetime ISA. While the ISA product and auto-enrolment both survive what Keith Ambachtsheer, the Canadian pension academic, calls the ‘Elevator Test’, once it comes to the drawdown phase, it is less likely you can explain to a pension saver during the trip to the 6th floor how to access a drawdown product. With an ISA, you simply take the money.The ISA also has the advantage of brand recognition and, in the Lifetime ISA, the selling point that you can use the savings – and the 25% top-up – to finance your first home. Pension savings, in the meantime, remain locked away for the future. Which product would, therefore, be more attractive to a cash-strapped saver under 40, even if by using an ISA she misses out on the 3% employers pay in as part of auto-enrolment?The answer may seem obvious to someone who understands the benefit of getting ‘free money’ from the employer, but the lure of the 25% bonus might win over many who do not understand that the minimum 3% contribution under auto-enrolment is actually a better deal than the ISA top-up, and that you get more by contributing less.NEST unboundThe real question, in this new world with a focus on individuals, is whether Osborne will see reforms through to their logical end and allow savers to dictate into which provider an employer has to place contributions. The approach, already in place in Australia to some extent, might trigger an advertising war between providers, but it would also unleash the free market on providers failing to offer value for money, or those investing in a way that’s not aligned with members.If the Conservative government really wants to put the onus on the individual, it must give savers full control and let choice drive consolidation, either towards the National Employment Savings Trusts, Now: Pensions and People’s Pensions in the market, or the insurer-backed master trusts.Such competition would require strong, sustainable and well-governed pension providers. Further, in an industry that has well-run not-for-profit trusts schemes, it would boost funds investing with the sole aim of the best outcome for members, not the dual goal of profits and returns.Jonathan Williams is deputy news editor at IPElast_img read more


first_imgThe Premier County will appear in their first ever All-Ireland final at Under 21 level this Saturday in Parnell Park when they take a Tyrone side going for their 5th title in this grade. Canavan, who himself won two All-Irelands at under-age level with the Northern county says it’ll be difficult to stem the tide of Tipp’s centre field pairing. Throw-in on Saturday is at 6 o’clock and Tipp FM will have full live coverage in association with John Kennedy Motors, Main Toyota Dealer, Clonmel.last_img read more


first_imgFormer Dallas Stars head coach Jim Montgomery spoke publicly for the first time since he was fired by the team on Dec. 10 for “unprofessional conduct.” In an interview with TSN’s Pierre LeBrun, Montgomery revealed his battle with and recovery from alcoholism. He said the team was justified in its decision to remove him as head coach.”When I looked in the mirror, people wonder why I’m thankful for the Dallas Stars and (general manager) Jim Nill for what they did even though I understand that I disappointed Jim Nill, the staff I worked with and the players especially. I let them down,” Montgomery reflected. “That firing was deserved. I wasn’t doing the right things. “I felt I was being a hypocrite. I was asking my players to do the right thing and yet I wasn’t. I think it’s important to know that as I did before I went through all of this undertaking, of understanding science and what alcohol does to you.”MORE: Stars players react to Montgomery’s firingOn Dec. 10, Nill wouldn’t go into specifics for why Montgomery was fired when speaking with reporters at a press conference. Montgomery told LeBrun that he was warned a couple of times by Nill and his wife about getting himself in trouble due to alcohol. “That’s when you know the disease is progressive because in my 20s and 30s, I didn’t think it was but in my 40s, when I look at it now, never did I believe it was a problem because I’m going to fix this myself,” Montgomery said. “I had fixed everything in my life myself and I could not fix my problem with alcohol and I needed to go get help.”Montgomery said it took getting firing by the Stars for him to realize he was an alcoholic. He said since college, he would drink once a week.”You celebrate your victories on Saturday night and went hard, partied hard,” Montgomery described. “I didn’t have any problems with alcohol until I was 38. I got a DUI at a coaches’ retreat in Florida and that was the first time that drinking had led to me having problems, although there were several nights previously that I know I drank too much. That DUI led me to do some soul-searching.”Since his firing, Montgomery has been going to intensive therapy in Dallas and has a daily program, which he calls “conditioning to my sobriety.””I’ve sought that help and that’s why I talk about that daily conditioning allows me to have a sober life and my life is much better,” Montgomery detailed. “I tell you that a lot of people have told me that your life is going to get better and now that I’m coming up on six months, it does get better.”I’m just thankful for all those reasons for the Stars letting me go.”MORE: NHL enters Phase 2 in return-to-play protocolMontgomery described what it was like for his family the day he got fired by Dallas. “The day I was let go by the Stars, incredible shame and guilt to have my family name, to tell your wife who has warned you that you lost your job because of this,” Montgomery said choking up. “My two oldest children are boys, 10 and eight, and I have to tell them you lost your job, not because the team was losing but because of your own actions and behaviors and your addiction to alcohol is really, really hard.”In two seasons with the Stars, Montgomery led the team to a 61-43-10 record taking Dallas to the second round of the Stanley Cup playoffs last year, losing to the eventual champion St. Louis Blues. Right now, Montgomery is focusing on his recovery and his family but is optimistic he’ll return behind the bench.”I am hopeful to coach again,” Montgomery said. “It’s my passion. It’s what I love to do. I don’t control the opportunities that are going to come my way and I do not worry about the future. I just focus on right now and what I control.”last_img read more