UK – Members of the BT and Royal Mail pension funds are backing the Pension Commission’s proposal for a National Pensions Savings Scheme.
Unite, the National Federation of Royal Mail & BT Pensioners, says it wants the proposals “dealt with as a package and not filleted to remove the costlier parts that might offend the Treasury”.
“The Pensions Commission has put forward radical and sensible proposals to establish a fair, affordable and sustainable system,” said general secretary Roger Turner on behalf of 104,000 members.
Members are being asked to write to their Member of Parliament asking that the proposals are not “cherry picked”.
Unite is calling for the reinstatment for an earnings link to state pensions, the universal payment of a state pension to all those over 75 and the introduction of the NPSS with compulsory employer contributions and automatic enrolment.
The call comes ahead of a closed-door pensions summit hosted by pensions minister Stephen Timms at which the Commission’s proposals will be discussed.
Watson Wyatt today said that he annual income a pension saver receives has been cut by nearly 80% in the last 10 years.
“Lower returns on investments mean that the pension pot after saving for 20 years is less than half what it would have been 10 years ago and annuity rates used to convert pension pots into income have also reduced by nearly half over the same period,” the consultant said.
“Once these two cuts are combined, the resulting income is down by 78%, for savings of identical amounts.”
"People on above average incomes, or those saving with the benefit of a significant employer contribution may be able to tolerate such wide fluctuations, but it is less clear that NPSS will provide pensions that are suitable for the vast bulk of savers who need the proceeds from NPSS in order to provide even a basic standard of living in retirement,” said senior consultant Stephen Yeo.
“If the government opts for a system where individuals bear all the investment and longevity risk there is a good chance that a significant number of them will end up with inadequate pensions.”