NAPF changes stance on pension accounts
UK - The National Association of Pension Funds, under new chief executive Joanne Segars, has changed its mind on plans to introduce individual pension accounts by 2012.
Outgoing NAPF CEO Christine Farnish caused a stir when she described the proposal - put forward by the Pensions Commission - as reeking of Stalinism and "big government".
Now the organisation under CEO-designate Segars has, somewhat reluctantly, come round to the idea.
"The NAPF considers that there are weaknesses and risks in both the delivery options for Personal Accounts proposed in the White Paper - a single National Pensions Saving Scheme (NPSS) or an Industry Model based around competing financial services companies," the NAPF said.
"Of the government's two options the NAPF has concluded that, on balance, the NPSS is more likely to meet the needs of the target group."
The government has invited the NAPF to explore how its "Super Trusts" idea could function alongside Personal Accounts.
"The NAPF supports the introduction of simple, low-cost, Personal Accounts - they could help millions of people save for retirement and help reverse the decline in pensions saving. But how they are delivered will be of critical importance in increasing the UK's retirement saving," Segars said.
It has put forward a five-point plan, covering a workplace pension quality mark, financial incentives for employers, ring-fencing Personal Accounts, a flexible "suitable alternative scheme test" and transitional measures on contribution ceilings.
Segars said: "The gvernment has said it wants to see a step change in the UK's retirement saving. We agree. So we cannot sit by and see good quality schemes, in which millions of hard-working Britons are saving, level down in favour of Personal Accounts.
"If that happens, moderate earners could save more themselves and still end up with 30% less than they would have got from a typical DC pension.
"Our Five Point Plan for Better Pensions will help target Personal Accounts on those who do not have access to a workplace pension and encourage employers to maintain and develop good quality workplace schemes."