Pensions minister Stephen Timms has challenged the pensions industry to come up with details of an industry-led alternative model to Turner’s National Pensions Savings Scheme. The pensions industry has broadly welcomed the principle of personal accounts, but questioned Turner’s preferred model of a National Pensions Saving Scheme, announced last week. The Association of British Insurers believes it can put together an industry-led model which will do a better job than the model Turner proposed. The minister invited the industry to work up the details of an alternative approach by February. Timms said: “The voice of the industry has always been at the heart of our consultations on reform and we need it to be at the heart of our response to Turner.” He spelled out the two principle criteria that any alternative model has to meet: a radical extension of coverage, including lower and moderate earners, the self-employed and those working for small employers; and a radical reduction in cost, in terms of low management charges and reduced administration costs for business. “If you can design a detailed, workable model that meets these criteria and can match the Turner version for a broadly comparable level of charging, then that will be very attractive to us,” Timms said.
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