The Association of Consulting Actuaries (ACA) has urged the government to engage with the pensions industry “early” in the legislative process, to ensure policies in the Pension Bill consider the “holistic link” between pensions, financial policies and taxation.

In a letter to the new Pensions Minister, Emma Reynolds, and Economic Secretary, Tulip Siddiq, the ACA said that the interwoven impact of financial policies and taxation on pension fund investment and attitudes surrounding private pension savings and outcomes presents a key challenge, but also a key opportunity, for the new government.

Commenting on the letter, ACA chair, Stewart Hastie, said that the association looks forward to working with both the Department for Work and Pensions (DWP) and the Treasury on the “important” areas on pensions and investment outlined in the Labour manifesto, arguing however, that this can only be “successfully” pursued by taking the pensions industry, trustees and business with them.

“We are looking for early clarity from ministers to understand more details on their key priorities and how the pensions review outlined in their manifesto might progress both in scope and timing,” Hastie continued.

“Whilst today’s announcement of a Pensions Bill is welcome, notably important initiatives to improve outcomes for defined contribution (DC) members and the introduction of the long-awaited legislation for superfunds, keeping momentum on outstanding issues is essential, such as the publication of the new defined benefit (DB) Funding Code and delivery of pensions dashboards.”

The letter also highlighted other existing pension policies that the ACA was keen to see progress by the new government, that had been held up because of the general election.

These included the "urgent" clarification of several outstanding regulatory issues concerning the abolition of the lifetime allowance, as well as plans to expand the coverage of collective defined contribution (CDC) schemes, through the introduction of legislation for whole-life multi-employer schemes.

In the letter, the ACA also urged the government to complete the value for money initiatives that are practical to implement and to extend auto-enrolment coverage, as previously agreed by parliament.

Hastie added that the ACA sees an “important holistic link” between pensions and the financial policies pursued by the government, and supports the joint department appointment for the new Pensions Minister, stressing the importance of “closer links between the priorities of both the Treasury and DWP”.

He stated: “Given the wide industry consensus, we also see the opportunity for the new government speedily progressing steps to encourage greater long-term investment flexibility for DB schemes and their ability to share surpluses with sponsors and members where appropriate.

“With the right safeguards, utilising current and future surplus assets in the £1.4trn of UK DB pensions, schemes can make a meaningful difference to employers and the resources available to invest in their businesses and improve long-term savings for their current workers.

“At the same time, new flexibility for DB schemes could help bring additional benefits to their members.

“Safeguards including legislative and regulatory measures can be accommodated within the existing frameworks.

“Industry estimates suggest from £100bn to £250bn of surplus assets could be released from DB schemes over the next 10 years to support employers, members, and current employees if legislative changes are forthcoming in the near term.”

On consolidation for very small DB schemes and a limited group of very poorly funded schemes that are already well-known to The Pensions Regulator, ACA suggested that the introduction of the Pension Protection Fund as a public sector consolidator could be useful.

However, given the effective commercial markets for endgame solutions that are already in place, the ACA emphasised that the role of any public sector consolidator should be strictly limited to those schemes that would be unable to access a commercially available solution in the future.

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