The government should urgently produce a roadmap for the Mansion House pension reform package to avoid “mindboggling complexity and chaos”, according to Aegon.

Following the package of papers and consultations, including on the value for money framework, small pots and collective defined contribution (CDC) pensions, Aegon called on the government and regulators to give urgent consideration to a “sensible and workable” implementation roadmap.

It noted that the Mansion House reforms also come at a time when the industry is preparing for the launch of pensions dashboards and extensions to auto-enrolment policy.

“Aegon welcomes the government’s drive to boost investments made by defined contribution (DC) pension schemes in private equity and other illiquid investments,” Aegon pensions director, Steven Cameron stated.

“This is an underpinning aim behind a massive ‘all guns blazing’ package of proposals unveiled the day after the Chancellor’s Mansion House speech.”

He noted that while each of the policy proposals had their own admirable aims and merits, they also posed challenges and questions.

Furthermore, Cameron highlighted that they were all interlinked and their success would be impacted by other ongoing developments.

“Charging ahead without a well thought-through over-arching plan could lead to chaos,” he warned.

Aegon urged the government and regulators to engage with the industry to develop an implementation roadmap that takes into account interdependencies and priorities.

“We see great value in getting pension dashboards up and running, to allow individuals to see all of their pensions in one place, online,” Cameron continued.

“This should be done before attempting to contact millions of customers as part of a sweep up of pots under £1,000 into a small number of consolidators.

“Getting the value for money framework agreed and bedded in should also be a priority, with particularly widespread benefits in assuring many millions of the value of their pension scheme.

“It needs to be fully aligned with the FCA’s Consumer Duty, which goes live at the end of July. The framework will be needed to assess any scheme for authorisation as a ‘high value’ small pot consolidator.”

Furthermore, Cameron argued that it would make sense for scheme consolidation to happen before attempting to consolidate small pots at an individual level, describing the concept of attempting individual and scheme consolidation at the same time at mind-boggingly complex.

“We support making early improvements to the range of retirement options offered to members of trust-based schemes,” he added.

“But it’s too early to be consulting on offering them access to a decumulation only CDC arrangement when these haven’t yet been legislated for, let alone fully designed or set up in practice.

“Pensions are some of the longest-term investments individuals make, and while government, regulators and industry should always be looking for improvements, a mad rush to implement too much, too soon without a full understanding of the consequences could be highly risky.”

Share Story: