Although my dictionary tells me the word adequate means equating to – in most common usage now it tends to have a negative or niggardly slant of only just so. I don’t look forward to an “adequate” dinner or buy an “adequate” car, unless I am in the position of otherwise lacking those things. And so I think we need to approach this Pensions Review in the same way.

I greatly welcome this review, which gives us all the opportunities to ask difficult questions and hear original and varied solutions, all with the aim of achieving adequacy as a minimum for all those pension scheme members we as MNT’s represent.

We need to find ways to provide adequacy, in the sense of enough to live, for those for whom it is lacking, but we also need to be aware this is not what we want for ourselves and we need to be similarly ambitious for all our scheme members.

Among those for whom adequacy is lacking, probably the largest group is those in single or often multiple low income jobs. Neither the employer, nor the state, through tax, contribute anything to a pension, and those with low incomes therefore receive least help to provide for retirement, meaning almost total reliance on the state pension, which we know is below the Minimum PLSA level. And, many well- meaning employers match employee contributions, which are therefore biased to give most to those who earn most and often nothing to those who earn little. Adequacy calls for a careful balancing of who receives what tax rebates and (enhanced) employer contributions. Should employers pay a minimum (£ or %) contribution for all employees?

Adequacy issues such as this are clearly part of the gender pensions gap and the ethnicity pensions gap. However there are some specific considerations for the gender gap in how to create or maintain pension contributions during maternity leave or caring time outside employment. Should it be a priority, and a duty of care, for all advisers to discuss the apportionment of pension assets on divorce?

The other large group lacking adequate pensions is those in self employment who need an easy and effective way to make tax efficient pension savings, and for those who are freelance, gig or casual workers to receive employer contributions.

But these things only cover the system. We also urgently need to make better and more effective use of the savings within pension schemes – to make better use of the limited funds available. Those with the lowest pension savings are least well equipped to bear all the risks in Individual DC and so  they need Collective DC schemes. These are not only are predicted to give 30-50% better returns over the whole of life, including an income in retirement protected from longevity risk, but also don’t require individual decisions or paid for financial advice. We also need such schemes to be available to those who are self employed, or otherwise outside an employer’s scheme.

CDC savings also give trustees a much longer time horizon over which to invest to achieve the best outcomes for their members. Amidst all this conversation about pension pots it’s easy to lose sight of the fact that a given pot size will be of a different value to members depending on the economic environment and standard of living when they retire. Trustees need clarity on how they can apply their fiduciary duty to invest to avoid or diversify systemic risks with a view to the standard of living of their pensioners.

It has been estimated that a contribution rate of 12% in a CDC scheme could give a return close to the recommendations of the 2004 Pensions Commission which concluded that people on an average income would need two thirds of their pay as a pension to enjoy a comfortable retirement.  But this was at a time when most people were able to own their own homes. Now, as we look at the situation of “generation rent”, that two thirds will not suffice to also pay rent throughout retirement. The review therefore needs to bear this in mind.

Alongside suggesting greater savings so that pensioners can afford rent are various discussions about other pension linked products which also make use of the inertia effect. For example allowing employees to build up regular savings, perhaps initially in a short term emergency sidecar pot, which would help to achieve the financial security to incentivise greater pension savings. The next step could be another pot which could be used alongside pension saving to help build up a house deposit.

Whilst this could help to balance short and long term savings priorities and increase pension saving it needs realistically to address the other costs facing current generations compared to today’s pensioners, including student loans, childcare costs and spiralling rental costs.

And so the questions and topics in this review go back and forth. I sincerely hope we can move towards adequate pensions for those currently without and who are least well served by the current system, but also to create better pensions through maximising returns for all scheme members. Getting to this point is going to need lots of original thinking and discussion and AMNT looks forward to being fully involved and to bringing members voices into this review.

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