The Department for Work and Pensions (DWP) has appointed former NAPF Chairman Alan Pickering, a partner in Watson Wyatt, to investigate what scope there might be to simplify social security law pertaining to UK private pension schemes. This study will run in conjunction with the work already under way at the DWP to simplify and clarify the regulations on preservation, transfer rules and scheme rule modifications. It must also take account of what is going on with the MFR ‘reform’, the Inland Revenue simplification review, and implementation of the Myners Review. Mr Pickering has been given until July 2002 to come up with ideas.
His terms of reference state that proposals should be aimed at reducing compliance costs but must "not compromise the security of individuals’ investments". As an indication that this might turn out to be yet another attempt by the Government to square the circle, constraints imposed from the start include the need to "have regard to ... wider economic and exchequer effects". Thus it can be safely said that this rules out from the start what would be arguably the biggest potential gain of all, by far: namely, the abolition of contracting-out.
Aside from the objectives of greater clarity and simplicity of the wording, it might be argued that what is fundamentally needed in drafting new legislation is a radically different mindset. Too slavish adherence to the principle of protecting pension scheme members can lead to ridiculously convoluted legislation, as we have seen recently with the pension sharing regulations and before that the member-nominated trustee (MNT) regulations. It is to be hoped that one lesson learned from the MFR saga is that the Government can’t have it both ways.