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
"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