Employers and insurers broadly welcomed the publication of the long-awaited Pensions Bill last week.
The Bill proposes reinstating the link between earnings and pensions setting up a ‘delivery authority’ to design and plan a personal accounts savings system and gradually increasing the retirement age to 68.
A further White Paper on the savings scheme, which is likely to propose automatic enrolment, is due before the end of the year. This will propose that individuals contribute 4% of their salary and companies pay in 3%.
Stephen Haddrill, director general of the Association of British Insurers, supported the idea of a delivery authority for personal accounts, but said he had reservations.
“The White Paper should set out specific details of how the delivery authority will operate beyond the first 18 months, which is mapped out in the Bill,” he said.
“We will be looking for guarantees that the authority is genuinely independent and will be led by people who have real, practical expertise in the pensions field.”
The Bill states the authority will be kept at a distance from the government, as it is “not to be regarded as the servant or agent of the Crown”. But ministers will be able to give guidance, which it “must have regard to”.
The CBI said it was in favour of providing workers with a good state pension, as this would take the pressure off employers.
John Cridland, deputy director-general, said: “A good state pension will provide a solid foundation for the future, but the quid pro quo is that the entitlement age will have to rise.”