UK – Mercer Human Resource Consulting says the UK government has made misleading claims about the level of pension incentives in the tax system.

Mercer’s Paul Greenwood said pensions minister Andrew Smith “dissembeled outrageously” in a recent newspaper article on the UK pension system.

Greenwood said Smith had claimed that 13 billion pounds (18.8 billion euros) of taxpayers’ subsidy was going to occupational pension via National insurance rebates, as if the rebates were in some way an incentive to private provision.

Greenwood - in a letter to the Financial Times – said says the rebates are a reduction in tax now in return for lower state benefits later. “A transfer of obligations is not the same as a subsidy.”

Greenwood adds that this is the latest in a series of gaffes by the government. “The common thread here is a foolish emphasis on short term cash flow.”

“The current incentive structure is inadequate and there needs to be a proper debate about improving it,” Greenwood concludes. “Misleading sound-bites are not a sufficient subsititute.”

Separately, Mercer said in a statement that it has been appointed to provide administration services to the 47 million pound pension scheme of parcels carrier Lynx Express, ousting Jardine Lloyd Thompson.

The scheme has both defined benefit and defined contribution sections and had around 2,000 members.