It's pitch-black and freezing outside, much of the country remains on an extended Christmas holiday and those people who have gone back to work are almost all still fast asleep. Joanne Segars, on the other hand, is up and about in her Hackney home. The National Association of Pension Funds, of which she is chief executive, today publishes its annual survey of the state of the UK's private pension provision. Ms Segars is shortly due at the BBC's studio at the London Stock Exchange for a series of interviews.
Ms Segars prepares for a live link-up with the presenters of BBC Five Live's Wake up to Money show and an interview with the Today programme. The point she wants to get across is that after years of announcements of pension scheme cut-backs from major employers, the occupational pension sector finally seems to have settled.
The headline figure is that just 31 per cent of NAPF members now have final salary pension schemes that are open to new members, but this is only marginally down on last year's 33 per cent. Two-thirds of these schemes have commitments from their sponsoring employers that they will remain open in their current or very slightly modified form for the next five years.
"There does seem to be a group of employers who remain committed to final salary provision from a high-water mark for scheme closures in 2002, we have reached a position of stability," she says.
On her journey to the NAPF's offices in Victoria, Ms Segars is satisfied that her interviews went well. Employers closing final salary schemes often face anger from staff and a hostile press but the NAPF believes pension schemes have endured an incredibly difficult 10 years.
Ms Segars also points out that when an employer cuts back on final salary scheme benefits, it is not always looking to save money. "Among the defined contribution schemes [to which many employers have switched for new staff], the average employer contribution has edged up to 7 per cent over the past year," she says. "A good number are offering 10 per cent or more."
Nevertheless, she accepts that one reason fewer employers have felt compelled to rein back on pension benefits over the past year has been the benign state of investment markets. As a result, pension scheme deficits at most final salary scheme have narrowed significantly indeed, many are now in surplus.
Ms Segars is by now conducting a series of telephone conferences with members around the country. "We're a member-driven organisation and it's crucial for us to know what as many as possible of our 1,300 members are thinking," she says.
Currently, the main worry for pension scheme managers is the Government's pensions reform package. On Monday, the Pensions Bill is due for its second reading in the House of Commons and while the NAPF is supportive of many of the reforms, it also has some serious concerns.
At the heart of the Pensions Bill is the Government's determination to drive up the number of people saving privately for old age. One mechanism for achieving this goal is that from 2012, people will be automatically enrolled in their employer's pension scheme (they currently have to opt in).
The NAPF believes this measure will cost employers 1bn to 2bn a year. Not only will there be the costs of changing administrative procedures, but scheme membership is certain to shoot up. "If you go from contributing to 50 per cent of your employees' pensions to, say, 90 per cent, there are going to be some major cost implications," she warns.
It's time for Ms Segars to take a short trip across to the Department for Work and Pensions in Westminster, to again press home the pension industry's concerns about the knock-on effects of the Pensions Bill. One major concern that the NAPF shares with consumer groups, pension scheme consultants and business organisations is that there will be "levelling down" of benefits from 2012 onwards.
Ms Segars points out that all employers will then be required to contribute at least 3 per cent of pay to staff pensions either to an employee's personal account within the new National Pension Saving Scheme or to their own occupational scheme. Some employers are bound to see this new rule as a licence to reduce the contributions they currently make to the minimum level.
"Levelling down will simply be a reflection of employers' increased costs," Ms Segars says. This is why the NAPF has been lobbying hard for the Pensions Bill to eliminate as much red tape as possible for schemes, reducing their costs elsewhere.
On this aim, the NAPF has found ministers prepared to listen. "The Government has taken some of our advice and the dialogue has been genuine and valuable," she adds. The new legislation will, for example, include some simplification of the rules on index-linking of benefits, as well as a commitment to more principles-based regulation. But Ms Segars would like to see more concessions the option for employers to take back surpluses from pension funds in certain circumstances, for example.
Over lunch back in the office, Ms Segars and her team work on co-ordinating the views of members about the Pensions Bill. Many of those views are positive, but employers are weary of the continual change with which the pensions sector has had to cope.
Ms Segars sets off for the East Midlands, to meet up with one of the NAPF's local groups, which meet every couple of months to exchange views about issues and concerns. One issue that has repeatedly come up at such meetings and which she hopes has now finally been put to bed is the treatment of the 120,000 employees who lost their pensions when their employers went bust.
Just before Christmas, the Government announced that these employees would receive a decent level of compensation, a victory for campaigners after a five-year battle.
Ms Segars says the affair has been an issue for NAPF members because it has undermined confidence unfairly in her view in the whole occupational pensions sector. "The UK pensions system is broadly safe and secure, but people need to have confidence in it," she says.
On the train back to London, Ms Segars is looking forward to the end of a very long day. The message she has heard from local group members today has reinforced the views expressed by NAPF members in the organisation's annual survey. Pensions reform is a major challenge for schemes already coping with much-increased workloads and regulatory responsibilities.
Costs too have increased administration costs are up by 50 per cent since 2005, while fund management fees have doubled. The introduction of an industry compensation scheme for future victims of pension scheme failures has led to a 530 per cent increase in the cost of levies over the same period.
Next week, Ms Segars will be back making this case to government. "We're broadly happy with the new legislative framework," she says. "But there is plenty more that can be done to help employers go on offering decent pension schemes to staff."
Name: Joanne Segars
Personal: Lives in Hackney in East London. Awarded OBE for services to pensions industry in 2003.
Education: Degree in economics from John Moores University; MA industrial relations, University of Warwick.
Career: 1987: Incomes Data Services, researcher; 1988: Trades Union Congress pensions officer/ senior pensions officer; 2001: Association of British Insurers, head of pensions; 2005: National Association of Pension Funds (joined as director of policy, before becoming chief executive in 2006).Reuse content