Alan Pickering has called on the government to draft a new pensions act to implement the changes he proposes in his report for the UK government on simplifying pensions. Pickering, also chairman of the European Federation for Retirement Provision, says the new act should repeal or consolidate any existing private pensions legislation.
The report lays out proposals to simplify the pensions industry including a recommendation that employers be given more scope to design the pensions they offer employees.
Among the more controversial recommendations are scrapping employers obligation to provide index-link pensions and survivors’ benefits. Pickering has also called for the creation of a new, proactive regulatory and advisory body and new codes of practice.
Work and pensions minister, Andrew Smith, says the government will produce a green paper to look at occupational and private pensions policy in the autumn.
Chairman of the National Association of Pension Funds, Peter Thompson, says the review shows effective ways to reduce red tape and will help promote greater flexibility in company schemes. “The report highlights the problems that have all too often pushed employers out of providing good occupational schemes.”.
The Trades Union Congress, the body representing seven million UK workers, says it would be wrong to suppose the report will solve the pensions crisis and it attacks some of its proposals.
“Ending indexation of salary related pensions will lead to poverty in old age and women in particular will be affected by the removal of survivors’ benefits, as they tend to have smaller pensions and survive their partners,” says Brendan Barber, the TUC’s deputy general secretary.