Brendan Barber, general secretary, TUC
The TUC believes the time is right to move beyond the pre-sent voluntary model of workplace pensions provision.
We support greater compulsion because we believe it would significantly improve both the extent and quality of pensions coverage. Occupational pension schemes have never covered more than half the workforce.
In addition, we can see that under a voluntary approach, the level of contributions into defined contribution schemes will be far too low to provide decent pensions. We believe that compulsion on employer and employee to pay into a pension would tackle both of these current failings.
Look at Australia, where the compulsory superannuation system has successfully increased both savings and the coverage of pension schemes. For example, 75 per cent of part-time female staff in Australia are covered by superannuation – more than double the number covered here.
And while individuals must be given greater flexibility around retirement and the chance to work longer if they desire, people should not be forced to work into their old age.
Brendan Barber is speaking at the next Personnel Today HR Directors Club event on 16 November GO TO www.hrdirectorsclub.com
Alan Johnson, secretary of state for work and pensions
We are not in a crisis now; the importance of [the Turner Report – released this month] is to help us lay the foundations for not reaching that crisis in 15 to 25 years’ time.
It would be nave to think that employers would contribute more out of the kindness of their corporate hearts. We have to reinvigorate the business case for employers providing and contributing to their employees’ pensions.
This means a protection agenda that restores confidence in pensions savings, and a simplification agenda that makes it both easier for employers to provide and contribute to pensions, and for individuals to save.
[We need] an information agenda which encourages individuals to take up and recognise the benefits that their employers are offering: an equal opportunities agenda that breaks down barriers that prevent people getting into work and staying there for longer.
The Turner Report emphasises that more people working for longer must be a crucial part of the response to longer lives. In the Pensions Bill we are increasing the rewards of working longer through state pension deferral.
Digby Jones, general secretary, the Confederation of British Industry (CBI)
All employers should automatically opt in all staff to a pension scheme and then give them the choice to opt out – inertia will automatically get more people in.
Employees need to see that employers have done their utmost to provide innovative schemes that share the risk. It comes down to communication, information and explanation. I would like it to be mandatory on the school curriculum, so teenagers understand that you can’t save too early for retirement.
Compulsion is not the panacea that many, including the unions, blindly lust after. At the 10 per cent compulsion rate that the TUC recommends, we reckon that would cost 22bn a year. Where will it come from? Most individuals will see compulsion as a tax. When it is a tax, everybody tries to avoid it – so instead of getting saving into the DNA of the nation, you get it into the ‘let’s get out of this’ compartment.
Employees and unions have to leave behind the old culture of early retirement. We should encourage more people to work longer and pay for most of the cost of a higher state pension by raising the pension age to 70 [by 2030].