Sense and sensibility

Mark Lisle, compliance manager at Rowanmoor Pensions, calls for ‘realistic’ rules under a new government.

The formation of the new government comes a year after details of the outlandish, ridiculous and, on occasion, embarrassing expenses claims made by our elected representatives became public knowledge. We remain hopeful that the new regime will have the sense to conduct itself with more dignity, but rest assured, the domain of the ludicrous request for what may be an eligible expense is not exclusive to the world of politics.

Now, I know in most organisations the technical services team enjoys a reputation for both its intricate and detailed knowledge of its field, allied to a certain quirky but endearing eccentricity. It is a bit like District 9: you are never sure when you visit their manor whether you are communing with a higher form of life, or you will turn up unexpectedly and catch them eating cat food.

Acting as the gatekeepers for all the chance, speculative, and darn right ill-informed enquiries regarding eligible investments that come in from clients, intermediaries and consultants alike, one can see a comparison between their position, and that of the Legg Commission. The fixed look of consternation, for one.

It is difficult to believe the eyes on occasion. For every claim for a 59p chocolate Santa there is a request to slip a grand piano into a SSAS (on the proviso one of the members keeps it at home); for every pack of Pampers the taxpayer is asked to bear the cost of, there is an enquiry whether the pension can foot the cost of toilet rolls in the scheme property. However, some of the rules our technocrats have to interpret are somewhat fantastic in themselves.

Parliamentary pensioners

Even more outlandish is the continuing insistence that pensions must have commenced by age 75. I was interested to read that the number of MPs aged over 70 elected in 2005 – 14 to be precise – was as high as at any previous election since 1974. Despite the younger face of politics purveyed by the leaders of the Lib Dems and the Tories, and with the oldest previous member, The Rt Hon and Rev Ian Paisley not seeking re-election, it will be interesting to see if the age profile of the newly elected house will have any bearing upon future pensions policy.

Equally bizarre is the ability to mitigate tax by benefiting unconnected scheme members upon death while receiving scheme pension, yet no provision is available to pass residual benefit on to ones family without a draconian 82% penalty. Add to this the inconsistency that, under ASP in such a situation there is the ability to pass the remaining fund to charity which does not exist for scheme pension.

Let us hope that this government will apply some consistency to its policy-making and day-to-day operations. Whether it be a 1p claim for a telephone call, or £1,645 for a duck house, the principle is the same. A sensible, moral approach to the practical application of realistic, understandable rules is the way forward.