| Pension schemes urge more radical reforms |
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| 02/08/2002 | |
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by James Whitwell UK pension schemes broadly welcome the proposals outlined in the recent Pickering report, but feel reforms should go even further, according to the latest survey by the National Association of Pension Funds (NAPF). In a telephone survey of 100 NAPF members, including some of Britain's biggest company pension schemes, 72 per cent said the report's proposals, if implemented, would lead to a simplification of the pensions framework. However, 75 per cent said the Pickering proposals do not go far enough in addressing the problems facing the industry. NAPF says the survey counters fears that additional benefits would be slashed, with 81 per cent of respondents saying they would keep widows' benefits, and 76 per cent index linking, even if the requirement to do so were abolished. "There is a genuine demand from pension schemes for radical change," said NAPF Chief Executive Christine Farnish. "The message from this survey is that the Pickering proposals would do much to simplify the pensions regime, but that more must be done to encourage retirement saving." Farnish believes it is reassuring that the majority of schemes want to retain the additional benefits which many commentators feared might be jeopardised under the Pickering proposals. "This is welcome evidence that employers are committed to providing good quality workplace pensions benefits, and would continue to do so even if the current rules were relaxed," she said. "We would hope that many employers not currently providing pensions would be encouraged to do so if the rules were relaxed, thus giving more people access to a company pension scheme. It is now vital that the Government takes radical action to support employers who clearly have a commitment to good workplace pensions." The key findings: · 72 per cent thought that the report's proposals, if adopted, would lead to a simplification of the current framework. · 75 per cent thought that the proposals do not go far enough in addressing the problems facing the industry. · Members welcomed the simplification aspect of the report, but were concerned that the proposals would do little to encourage people to save more. · The majority of respondents (76 per cent and 81 per cent respectively) said that they would still continue to provide indexation and survivor's benefits if the obligation to do so were removed. · 65 per cent were in favour of compulsory immediate vesting (with an accompanying change in the transfer rules). · 64 per cent thought it unlikely that the Government would give employers the right to make scheme membership compulsory, but 61 per cent said that they would consider the option if offered. |
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