Plans to make it easier to retain older workers and reduce pensions red tape have been welcomed by employers.
The proposals outlined in the long-awaited pensions Green Paper will help organisations retain valued older staff by allowing them to continue to work for an employer while drawing part of their company pension.
As things stand, Inland Revenue rules prevent employees taking a pension and salary from the same employer unless they start a completely different job.
Niccola Swan, director of equality and diversity at Barclays Group, said the proposed changes in the Green Paper, which include the scrapping of compulsory retirement, will help employers hold on to valuable people and skills.
However, she warned that the proposals will need to be managed properly by HR.
"Currently, there is a natural end to a person's working life and people know where they stand," she said. "Now we will have to be really good at performance management, and ensure that people's careers end in a dignified way."
Sam Mercer, campaign director of the Employers Forum on Age, is confident that all organisations stand to benefit from the proposals through improved retention of their most experienced people.
"It is about stopping the enforced exit of individuals from the workplace for no other reason than their age," she said.
Proposals to cut red tape and simplify schemes by replacing the eight tax regimes for pensions with a single scheme have also been widely welcomed.
Duncan Brown, assistant director general at the Chartered Institute of Personnel and Develop- ment, said the paper recognises the need to provide both employees and their employers with choices over retirement and pension provision, within a simplified, flexible framework.
Although employers have welcomed some of the specific proposals in the Green Paper, pensions experts have voiced concerns over whether it will encourage people to save enough for their retirement.
Consultation on the paper closes on 28 March 2003.
By Quentin Reade