The chairman of the Pensions Commission has warned employers that he will not budge on his plans for a national savings scheme.
Speaking at a Work Foundation conference yesterday, Lord Turner said the National Pensions Savings Scheme (NPSS) would cost 0.3% of the savings put into the scheme, and reiterated that employers must be obliged to contribute.
“We’re confident you can deliver the NPSS at something like a 0.3% management charge when people are investing in indexed funds,” he said. “We also believe that the costs to business will be relatively small.”
He was heading off expected criticism from the Association of British Insurers (ABI), the CBI and the National Association of Pension Funds (NAPF), which on Friday will present alternative national savings plans to the government.
Last November, the commission suggested that employers contribute 3% of workers’ wages to the NPSS.
The CBI has said that it wanted employers to be able to opt out of making NPSS contributions if they are financially stretched.
Christine Farnish, the NAPF chief executive, described the NPSS plan as a “monolithic quango” and a “throwback to the Stalinist era”.