CBI’s contribution to the pensions debate is welcome, but leaves some questions
unanswered, according to the Chartered Institute of Personnel and Development
Cotton, pensions adviser at the CIPD, called for a wider debate to reach a workable
consensus on the future of retirement.
said: "In our response to the Government’s 2002 Green Paper, we called on
the Government to review the existing scheme to provide a simple safety net and
for a debate around the level at which the net should be pitched, and how it
should be funded. Today’s contribution
to that debate from the CBI is welcome.
there are no quick fixes to the pensions conundrum. The CBI’s own response appears to offer little to counter
inevitable criticisms that their solution will lead to backwards steps in
efforts to tackle pensioner poverty.
is clear, is that further work is needed from all interested parties to ensure
that a workable consensus can be reached before the pensions issue really does
become a crisis."
CIPD has contributed to the debate by supporting the work of the Tomorrow
Project by a research organisation in its publication Reshaping Retirement. It
advocates a ‘flexible state pension’ that is:
Paid to everyone, irrespective of contribution records, on a residency basis
and at a flat rate
Set significantly above the pensioner poverty line
Indexed to earnings
Linked to other measures to ensure individuals have increased choice over when
they start to receive their flexible pension
Flexible enough to ensure it can be received at a reduced rate 10 years before
the state pension age, or an enhanced one for 10 years afterwards
Funded by a rise in the state pension age, probably to around 70
Phased in over a 10-year period, starting in 2030.