Pension proposals meet with criticism

Proposals
that would allow organisations to insist on staff joining pension schemes have
been widely criticised by employers and trade groups.

The
recommendation, which would enable firms to insist staff join a scheme, is part
of a package of reforms contained in the Government-commissioned Pickering
report.

The
CBI said the proposals could help contain rising costs and stabilise final
salary schemes but warned that few companies would want to make pensions
compulsory.

Susan
Anderson, director of HR policy at the CBI, said forcing a scheme on employees
would be unpopular among those on short-term contracts or with existing
schemes.

Duncan
Brown, assistant director general of the CIPD, welcomed a more joined-up
approach to pensions but said he favoured a voluntary, high commitment model:
“You can see some companies where this wouldn’t do any good at all. I’d
question how effective it would be to force a pension scheme on to staff,” he
said.

Will
Hutton, chief executive of the Work Foundation also criticised the idea of
compulsory pension schemes, warning that it could compel people to make unwise
investments.

The
report also recommends greater flexibility for employers to design occupational
schemes and suggests that survivor benefits and index-linking should be
scrapped.

Pickering
also calls for minimum standards for all schemes, enforced by a new industry
regulator.

Work
and Pensions minister Andrew Smith said the Government would look at
Pickering’s recommendations as part of a wider pensions green paper due in the
Autumn.

Pickering’s
key proposals


More flexibility for firms to design occupational schemes


Right to insist staff join pension scheme


Scrapping of survivor benefits


A new pensions regulator/advisor


No index link

www.dwp.gov.uk

By Ross Wigham

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