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DWP seeks pensions compromise. By Dan Martin

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5th Apr 2006
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Ministers are believed to be considering a compromise over how a National Pension Saving Scheme (NPSS) would work aimed at satisfying the concerns of insurers.

The Pensions Commission, which released its final report on Tuesday, said the scheme should be run by the government which angered insurance companies.

It has been reported that the Department for Work and Pensions (DWP) is considering adopting a "hybrid scheme" under which a government-run agency would collect employee contributions but would let workers choose their pension provider and type of investment.

Christine Farnish, chief executive of the National Association for Pension Funds, said: "A single NPSS run by a government appointed body, responsible for a complex new computer system and the design of a lifestyle fund into which many millions of people will be defaulted, is not the best way to do it.

"We believe that a pluralistic model run by not for profit Super Trusts would give people a better deal, with fewer risks to government"

News of the plan came after chancellor Gordon Brown appeared to soften his stance towards Lord Turner's proposals.

It has been widely reported that Brown is strongly opposed to implementing the proposals claiming they are unaffordable. Tony Blair however is thought to be keen to put them into practice.

But yesterday the chancellor sought to undermine claims of a growing rift by saying he and the prime minster agree "90% to 95%" on the proposals.

"The issue which has still to be resolved ' affordability ' is one on which Tony Blair and I are absolutely at one," Brown said.

"We know that the country looks to us to manage the public finances in a prudent way."

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