A hurdle for UK retirement plan

Just six months to go before new rules requiring employers in Britain to help staff save for retirement are rolled out, and one big challenge remains. Not for the employers —many of whom still have several challenges before they are ready to put pension auto-enrolment into practice — but for the life assurance industry.

As a response to "market failure" by the life sector, auto-enrolment is never going to be a comfortable subject for the industry. But if the life assurers can manage to see off MPs' recommendations lifting constraints on the National Employment Savings Trust (Nest), the government scheme created to give people on modest earnings access to a low-cost, low-risk and simple choice of pension savings, then they can start the new regime with a spring in their step.

This outcome would, however, be a serious misstep for the new arrangement. There are powerful reasons why the MPs' work and pensions committee said that the limit on how much the Nest could accept from savers each year should be lifted. It also said the ban on Nest's accepting transfers from other retirement savings scheme should end.

The first restriction makes Nest less attractive to employers with any workers earning more than £53,000 (Dh 194,629), since it could not be used for all staff. The second means that savers cannot consolidate separate pots of pension savings that they may accumulate over a working life. This leaves them exposed to multiple charges, which can increase if a savings scheme becomes inactive.

Against this, the Association of British Insurers argues that Nest should stick to its original focus on the low-paid, and not be given extra freedoms at least until a planned review in 2017. But by then, many employers will already have made their plans, and those for whom the limit is a barrier will have chosen elsewhere.

The MPs said the changes should be made urgently: the government has not yet made up its mind. Since speed really matters, delay could pre-empt decision.

Auto-enrolment is one big experiment. Experience to date about how ready people are to persist with long-term savings for retirement is generally discouraging. Nest needs all the help it can get if it is to fly.

Some big Trinity Mirror investors are still cross, and the targets in their crosshairs are multiplying.

The drama is not playing out as it is supposed to.

Act 1: Investors who feel angered at levels of executive bonuses talk to the company.

Act 2: If they feel it is deaf, they make their discontent public.

Act 3: The non-executives listen to them, cutting or abandoning bonuses in response. Cue display of unity at the annual meeting.

Here, the third act has gone wrong. Maybe the RemCo felt it could not refuse to pay a cash bonus based on operating profit targets when some of these had already been met. If so, that exposes its real failure, during the course of its various reviews in 2011, not to look again at a cash bonus based on operating profit alone. The group had already seen that such targets could be met and yet shareholders still miss out on a dividend.

Writing to big shareholders, the board said it welcomed feedback. Too late to be careful what you wish for.

The Knight's tale

The plot of "Angela Knight — voice of UK banking" has not disappointed. It is dominated by the global financial crisis, but still finds room for scandal over the mis-selling of payment protection insurance; and finishes with the cliffhanger of how to resolve the allegations that the London interbank offered rates may have been manipulated.

Yet the tone is unsatisfying. Knight's willingness to be first over the top in defence of her flock has had its admirable aspects. But it is a routine that needs to be fleshed out, at least on occasion, with a more thoughtful approach that leaves no room for charges of complacency.

Moreover, her exit does not represent a happy ending. Instead, it brings into focus the difficulties for a trade association whose 200-plus members face in many different directions. Perhaps it is the nature of how trade associations work, but even in response to an open question, the BBA found it hard to enumerate much in the way of successes over the past half-decade. Its best suggestion was a set of initiatives involving a dozen or so of its high street banking members to improve help for financing businesses. Knight's successor needs a stronger narrative.

— Financial Times