UK - Ending contracting out could be "extraordinarily damaging" for defined benefit schemes in the UK, the chief executive of the National Association of Pension Funds (NAPF) has warned.
Speaking in the current issue of IPE, Joanne Segars also gave her verdict on nearly a year and a half of coalition government pension policy, praising pensions minister Steve Webb, but saying that one area yet to see action was its pledge to reinvigorate occupational pension schemes.
However, she warned that the proposed end of contracting-out for DB schemes - a result of changes to the state pension system that will see a single-tier system, thereby ending the state second pension - needed to be treated with care.
She said discussions were underway with government on how best to implement the changes and that the approach taken would allow the coalition to fulfil its manifesto pledge to reinvigorate occupational schemes, "where we have yet to see significant action," Segars argued.
"The government can do abolishing DB contracting-out in a quite benign way," she said, admitting that while not straightforward, it could still be done relatively easy - "or they can do it in a way that is extraordinarily damaging for pension schemes".
The former head of pensions and savings at the Association of British Insurers was also critical of the government's approach to increasing women's state pension age, branding it "incredibly unfair".
She conceded that such increases were of course needed, but that sufficient notice was required so that workers could plan.
"We were disappointed when Iain Duncan Smith said there would be no further amendments, they would not push back the time scale, instead they would have transitional arrangements," she said.
However, Segars also praised the government, recalling that last summer had left her organisation "working flat-out" as it responded to the numerous consultations published on issues ranging from state pension reform to public sector changes.
"The government has been extraordinarily busy, and they deserve credit for having in the coalition agreement quite a commitment to pensions and in particular having a commitment to reinvigorating occupational pensions," she said.
For more from Joanne Segars, including her view on how the government handled the switch from RPI to CPI, see the September issue of IPE.