The government will press ahead with the creation of a public body to develop and administer the IT systems for a national pension savings scheme, despite opposition from the pensions industry.
Yesterday’s pensions White Paper made clear the government’s preference for a personal account scheme run by a centralised public organisation.
The state agency would develop and run the systems for automatically enrolling customers with the service, and collecting and processing pension contributions.
The Association of British Insurers, which represents private sector insurance companies, said it would continue to press for a scheme run by the private sector that makes more use of the industry’s existing pensions technology and infrastructure.
“We remain convinced that the systems that are needed to run such a scheme already exist in our member companies and all that would be required is greater interconnectivity,” an ABI spokesman said.
Andrew Power, an insurance partner at consultancy group Deloitte, said insurers only had a brief opportunity to make a compelling and costed case for making more use of existing private-sector IT systems.
“I would say they have three to six months to make that case”, he said.
For the government to meet its timetable for a new pensions scheme by 2012, Power said there was much to be done.
All design issues would need to be resolved quickly to enable legislation next year, which would be followed by a complex procurement process that could take two years.
This would leave only another two years to build and develop the necessary infrastructure.