75% of UK pension funds would keep index-linking
UK - Three quarters of UK pension funds would keep index-linking of pensions in payment even if this were no longer compulsory, according the National Association of Pension Funds. The association carried out a telephone survey of 100 funds to gauge their reactions to the proposals put forward in the recent Pickering Report to simplify pensions in the UK.
Pension schemes broadly welcome the proposals, but feel reforms should go even further, according to the survey, with 72% saying the report’s proposals, if implemented, would lead to a simplification of the pensions framework. However, 75% say the proposals do not go far enough in addressing the problems facing the industry.
The survey counters fears that additional benefits would be slashed, with 81% of respondents saying they would keep widows’ benefits, and 76% index linking, even if the requirement to do so were abolished.
Two thirds (65%) were in favour of compulsory immediate vesting, with an accompanying change in the transfer rules and 64% thought it unlikely that the government would give employers the right to make scheme membership compulsory, but 61% said that they would consider the option if offered.
Says NAPF chief executive Christine Farnish: “It is reassuring that the majority of schemes want to retain the additional benefits which many commentators feared might be jeopardised under the Pickering proposals.”
She adds: “We would hope that many employers not currently providing pensions would be encouraged to do so if the rules were relaxed, thus giving more people access to a company pension scheme.” It is vital that the government takes radical action to support employers committed to good pensions