Peter Thompson, the incoming chairman of the UK National Association of Pension Funds (NAPF) warned this year’s annual conference in Birmingham (May 17/18) that one of the principal difficulties lying ahead for the UK pensions industry was to ensure that freedom of investment did not become eroded as part of a ‘Euro-integration process’.
In his inaugural speech as NAPF chairman, Thompson said that Europe, alongside developments on the minimum funding requirement (MFR) and the recently published Myners Report, would be one of the: “major and highly significant issues which will occupy a good deal of our attention in the coming months and years.” Thompson added: “ We can give a general welcome to developments in the areas of pension taxation, freedom of investment, and the unfortunately named IORPs (Institutions for Occupational Retirement Provision).
“Our principle difficulty, it seems to me, lies in ensuring that those freedoms which I have already touched upon are not eroded as part of a Euro-integration process.”
Incumbent NAPF chairman Alan Pickering in his last speech heading up the association, called for European pension systems to be based on four cornerstones – diversity, inclusiveness, simplicity and stability.
Pickering warned the conference that taking the wrong path for future pension provision could spell not only retirement disaster but also lead to future economic and social problems.
“Make the wrong choice and not only will poverty and old age go hand in hand but the resultant social fragmentation will lead to economic underperformance which will itself create political and social strife.”
Choose correctly, however, said Pickering, and the result could be a virtuous circle, with efficient pensions systems helping create efficient economies, which he called: “the foundation upon which retirement security is based.”
Outlining his own views on the European pensions arena, Pickering commented: “Within each country, there should be a variety of pension opportunities. These opportunities should not, however, be confused by marketing hype. Differences should be generic and real not merely branding reflected by smoke and mirrors.”