UK- Former chairman of the National Association of Pension Funds Alan Pickering has warned that the UK pension industry needs simplifying in order to encourage occupational pension provision.

Speaking at the Royal Institute for International Affairs in London, Pickering said the complexity of the UK system makes it inefficient. “Not only are state and private sector schemes independently complicated, their interface compounds the problem by being unduly complex too.

“The British government wants to increase the proportion of pension provision that is financed within the private sector. It has acknowledged that this hope will be frustrated if radical simplification is not rapidly forthcoming,” he said.

“Pension legislation in the UK is not only prescriptive but also intrusive. Layer upon layer of well-intentioned legislation governs the operation of private sector schemes. While each layer may independently be quite palatable, the cumulative effects of all these layers are toxic.”

He said that the government can either adopt a less prescriptive attitude to benefit design or that it may be necessary to reduce the regulations governing the manner in which pension plans operate.

Pickering is compiling a report on pensions simplification which will be presented to Alistair Darling, the secretary of state for work and pensions, in July.

The speech comes as the National Association of Pension Funds is calling for a simplification of pension fund legislation in order to promote occupational schemes.

In its response to the government’s regulation review, the NAPF said current legislation is incomprehensible to most employees. It argues this is a particularly salient point as the switch from DB to DC schemes places the onus to organise pension provision on the employee as opposed to the employer.

In the same submission, the NAPF also called for an end to contracting out of second tier state pensions.