Written Evidence to be reported to the House
Pensions Bill
12:00 pm
Dick Saunders: I would support what Stephen has said on this. Clearly, the best solution would be to negotiate an acceptable outcome in Brussels. This is, quite clearly, an unintended consequence of the directive. Between the two alternatives, I think it is very easy to underestimate the cost to the financial services industry of imposing a so-called master trust system. I think that that would need to be thought through very carefully indeed. It is not just the life insurance industry that would face those costs, but the fund management industry as well. Bear in mind that what we have here is, in essence, a transitional problem. It will not be a problem for anybody joining a scheme after 2012 because it will be impossible to incorporate it into their contract of employment. Assuming we cannot negotiate a solution in Europe, I would suggest that some kind of short-term, flexible, transitional remedy, perhaps based around streamlined joining, would be the way forward.