I have several observations about these amendments and what the Minister described as novel concepts. It strikes me from reading part 3 that we are putting a lot of authority and responsibility in the hands of actuaries. That comes across clearly in the clauses. Actuarial science is a noble profession in this country and others, but it is worth reflecting on the responsibility being placed in actuaries’ hands. Actuaries have a lot of responsibility anyway, and certainly in defined-benefit pension schemes. It is inevitable that actuaries will play a significant role in any form of pension scheme other than defined contribution, but how would the Minister describe the role that actuaries will play?
This relates to a previous theme of our discussions, which is that this form of pension scheme requires savers to place significant trust in experts. It strikes me that it is a little like a doctor-patient relationship. We know that patients put a lot of trust in doctors to get them the best outcome for their health problems. Such are the complexities of medicine that someone with expertise and training must make such fundamental decisions. The actuary’s role in these schemes feels a little like that, and it brings the wider issue of governance into focus. We will undoubtedly discuss that more when we come to other amendments, but my initial observation is that this form of pension scheme saving puts a lot of emphasis on actuaries making good decisions. As I said, actuarial science is a noble profession, but actuaries have not always got things right in the past, which casts doubt on the scientific aspect in some respects.
The Minister described this as complicated stuff, and he is right. We must consider how much complexity a pension scheme can bear when communicating with its members. Complexity is an issue with pensions generally, and communication with scheme members is always a challenge. That brings into view how to explain to scheme members how collective defined-contribution schemes might work. He had a stab at explaining it, manfully—and probably, to experts outside this room, successfully—but the Government’s approach is to put into legislation a necessity for the probability that a target will be met, not the probability that the target will be met plus a funding ratio requirement, as in New Brunswick, for example.
It would be useful if the Minister elaborated on that in terms that might be understood more widely. It is difficult; I am asking him to do something that I am not prepared to try myself—that is the luxury of being in opposition—but I think that if we are to communicate the advantages of that type of pension scheme outside this place and to people other than actuaries, pension consultants and the like, he must try.
The Minister’s explanation of these amendments brought again into purview the issue of placing lots of decisions into secondary legislation. There might well be good reasons for that, but it is a feature of recent pensions Bills and perhaps less recent ones, too. Will he explain the rationale for that approach? On that note, I will be delighted to hear what other Committee members have to say and specifically the Minister’s response to those points.