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The opdu Report - Issue 20, June 2006 A-Day – the 6th April 2006 – was a significant date in the pensions calendar. It seems to have been a long time coming and there was always the possibility of it feeling like a bit of a damp squib when it eventually arrived. This was because, in media terms, the build-up to it had been fairly relentless. For months the financial press and others had been telling us about the birth of a new dawn, the day when all the shackles would be removed from pensions planning, when 8 tax regimes would be merged into one and so on. Almost without exception journalists and broadcasters had singularly failed to emphasise in the run-up to A-Day that most of the changes were permissive, that is to say that they did not have to be brought in all at once, or even at all, and in the case of occupational schemes were subject to the agreement of the trustees and the employer. Notwithstanding all of this, I expected there to be a bit of a flurry and a fanfare to greet A-Day when we actually got there. And, I suppose, initially at least, I was not disappointed. On the evening of 5 April 2006, I had a film crew come to see me from ITN to film an interview for that evening’s 10.30 p.m.news bulletin. They had already got “in the can” footage of a man lost and wandering around Hampton Court maze – a suitable back drop, I was told, for my contribution. I duly recited my piece explaining the A-Day changes and underlining the welcome flexibilities that were now available. At 10.25 p.m. that night I received a phone call from the producer to say that they were terribly sorry but they would be unable to include the item due to a major breaking news story that had literally just arisen. A dead swan had been discovered in a fishing village in Scotland with the much anticipated and feared deadly strain of avian flu. That would take up a significant proportion of the news bulletin and we had to be edged out in consequence. Effectively, we had become the first UK victims of bird-flu – fortunately still alive and kicking but with a story much less potent and dramatic than that the news bulletins would all now wish to major on. The following morning I went into White City to take part in BBC’s early morning Radio 5 programme “Wake-up to Money” – broadcast live at 5.30 a.m.! Yes – in case you were wondering, there were people listening in at that ungodly hour and were emailing and texting in questions about A-Day. The first question was a very basic one – What did the “A” in the title stand for? Just the sort of question which could make you look pretty silly if you were unable to answer it. I suggested that the “A” stood for Appointed day – hopefully correct – and not necessarily the “Action” day some writers had suggested. Encouragingly enough though, most callers appeared to welcome the changes and appreciate the work that the Inland Revenue (now HMRC) had put in. Back in the office later on in the morning our Helpline was extremely busy. Most of the calls were from people wanting to know more about the new arrangements for cashing in trivial pensions and the increased tax free lump sum. At mid-day it was back to White City to appear on BBC2’s Working Lunch programme. Again there was a range of questions sent in by viewers about the A-Day changes very similar to the ones we were receiving on the Helpline. As always, giving out our number on Working Lunch produced extra calls to the Helpline for the rest of the afternoon. Overall, our calls were double what they would have been on a normal day. We also had calls from various other media outlets seeking a reaction to the changes with particular reference to what the public thought. I was also filmed in the office by a film crew from the Press Association for distribution I know not where. After all the hype, my abiding memory of A-Day is that it was the start of the process rather than the end of it. Whatever the original intentions, I cannot believe that the changes warrant the title of “Simplification”. They are clearly not that, although the flexibilities and greater freedom that HMRC is now permitting are a major step forward and are very welcome. It is now up to schemes to take advantage of the new rules to enable members to share in the flexibilities and freedoms on offer. It will be particularly interesting to see whether and to what extent employers will sanction flexible retirement and the opportunities that ought to provide to facilitate the gradual move from work to retirement for many older workers. As memories of A-Day itself start to fade, we can but wait and see how all this beds down and what impact it will actually have on the ground. Perhaps in a year’s time we will be able to look back and say that was the turning point for pensions reform. Its time there was some good news on pensions. Let’s hope this is it. Malcolm McLean OBE
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