Industry experts remain divided over the government’s reserve power in the Pensions Schemes Bill, as highlighted in today’s ‘big debate’ session at the Pensions UK Annual Conference.

The session saw political economist, author, and academic, Will Hutton, speaking in favour of mandation, whilst Financial Times newsroom reporter and editor, Josephine Cumbo, stood against mandation, speaking in favour of savers.

Cumbo stressed the need to remember that pension savings are not public money, warning that defined contribution (DC) savers would be the ones taking a hit if these investments went wrong.

"These are the life savings of millions, not a lever for economic policy," she stated.

Cumbo also hit back at international comparisons, pointing out that Australia and Canada didn't force outcomes.

"They knew what was at stake, built scale over time, earned trust and used incentives to attract capital," she stated.

"Let's not pretend this power would be harmless. If it exists, it will be used, maybe not by this government, but one day, one minister, one crisis and private savings become political capital.

"Mandation powers don't eliminate risks, they shift it onto those least equipped to carry the burden of funding economic renewal. That's not reform, that's abdication. Because once you politicise pensions, you don't just lose returns, you lose trust.

"And once trust goes, the whole system is at risk. If the government wants pension support, earn it. Don't take control because persuasion failed.

Hutton, meanwhile, raised concerns over the broader economic climate in the UK currently, pointing out that the country is lagging behind its global peers in terms of domestic investment.

"We need to acknowledge the seriousness of the economic situation in Britain," he stated, arguing that if more capital had been available at the right time, "[the UK] could have had, in my view, a very vibrant tech economy".

"We cannot make that mistake going forward," he continued, emphasising that he is not calling for complete compulsion.

"I'm talking about the softest of touches, that actually DC default should have up to 25 per cent of their equity portfolio in UK equities, and it falls below 10 per cent, then they should be able to take a good loss of their tax privileges.

"There is a collective action problem and we need to solve it. We can build a £1trn economy in this country. We can turn around dismal performance on living standards. We can make our pension funds perform better. We can also produce better returns for our pensioners.

"It's there for us to do that, solve this collective action problem and move forward together."

But whilst both sides were passionate, there was no clear winner from the debate, with both sides remaining staunch in their positioning.

As session chair and IFM Investors executive director of public affairs, Greg McClymont, noted in his closing: "Based on the questions, and this is obviously unscientific, views definitely are divided, there is a reasonably even number of questions pointed towards both positions. I guess that's the fact that this debate will run and run."

This divide could also be seen as delegates filtered out of the hall, as conversations around the government's reserve power. Whilst some were now more sympathetic to the arguments on the other side, most remained on their initial side of the fence.

But with the Pensions Minister, Torsten Bell, seemingly staying strong on his stance on the reserve, suggesting that the industry just needs to "chillax", it seems like this is a debate that will continue to run on, at least until the clock runs out (or the Pensions Schemes Bill receives Royal Assent, with or without the mandation clause).

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