Pensions in the age of austerity: 10 proposals

Against a backdrop of austerity, pensions are at a crossroads. Regulatory change and a "collective effort" from employers, individuals and the government are needed to restore trust in pensions.

The roll out of auto-enrolment, problems with defined benefit funding, regulation and nervousness about savings were all examined at the NAPF conference in Liverpool this week.

In response to these pressures, law firm Squire Sanders put forward a set of “core recommendations” on the back of a recent white paper to ensure the long-term viability of defined contribution (DC) pension schemes.

Continued...

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Comments

lack of trust & knowledge    1 thanks

david5541 | | Permalink

recent research has shown that savers would be willing to top up their pension pots , but like the financial sector generally there is a lack of knowledge and awareness in the market and mistrust in the sector in the light of:

banking misselling scandals

commission driven sales men(& banks to their detriment in selecting only one provider because the banks lack expertise and wish to drive commision earnings)

the unavailability and lack of willingness amongst IFA-indepedent financial adviser-providers to serve the larger market because of a delight in fee bases only.-rather than commision refunds/disclosure.

changing accountancy disclosure rules in the light of the mirror group pensions scandal

regularly changing government pension rules following underfunded civil service/other public sector defined benefit schemes leading to total confusion following the abolition of serps.

the complete change and deterioration in private sector pension rights and employment rights generally in the light of the macro-economic decline since the 1970s.

Pensions are an example of    1 thanks

Knight Rider | | Permalink

Pensions are an example of the old adage that there is no problem so bad that Government intervention cannot make it worse.

Defined benefit schemes were the norm until legislation heaped extra burden on employers and the tax credit was removed in 1997. Since then tens of thousands have lost their pensions as there employers/former employers simply walked away from their pension liabilities.Legislation on MFR and Guaranteed Minimum Pension(which turned out to be neither guaranteed nor minimum) has proved a total failure and people have lost faith in both the Government and financial services industry as a result.

Faced with this the Government (with the support of the industry who stand to make vast sums in commissions) have decided to make saving compulsory. Auto enrolment is a smokescreen for a tax increase, a state sponsored subsidy to the financial services industry.

 

memyself-eye's picture

Remember Stakeholder pensions?

memyself-eye | | Permalink

The last doomed attempt to get people to save in a pension. Aimed at the lower paid, hardly anyone took up this daft idea and it quietly died - although I believe even now employers must offer a stakeholder pension scheme.

As for this latest farce, anyone who thinks 1% towards a pension is going to provide anything is delusional. I doubt even the commissions on this paltry sum will be worth the effort for the pensions industry.

Oh for the days of my (non contributory) final salary pensions - all three of them. 

Stakeholder failed because

Knight Rider | | Permalink

Stakeholder failed because they were not compulsory.

It may only be 1% now but this is just the start of another stealth tax.

Employees NI was 6.5% in 1978.

Worse still this is a regressive tax that falls disproportionately on the low paid many of whom will gain nothing from a pension. They will simply receive lower benefits.

Phasing out means tested retirement benefits would be an incentive to save.