UK advisory panel set up
UK pensions minister Malcolm Wicks has asked the Pensions Management Institute to co-ordinate the setting up of an independent trustees’ panel to advise the government.
“The government is keen to take into account trustees’ thinking on occupational pension issues, as well as giving them the support and acknowledgement that is their due,” Wicks told delegates of a conference organized by the PMI called ‘Pensions on the Precipice’.
The panel will advise the government about trustees’ views on themes such as investment decisions in a post-Myners environment and conflicts of interest within the trustee body.
“The strength of this panel will lie in the fact that it will be completely independent of government, but will have access to me on a regular basis and as such give a voice to trustees of all sorts at the highest level,” Wicks said.
PMI president Roger Cobley said: “We want to work with the government to implement all the changes as recommended in the Pensions Act.
“We want to restore public confidence in pensions and ensure that pensioners are able to enjoy financial security in retirement.”
The Trade Unions Congress, the National Association of Pension Funds and the Occupational Pension Defence Union were cooperating.
Meanwhile, pensions minister Alan Johnson has called for radical reform to end the “scandal” over single women’s pensions discrimination.
“I believe we need radical reform in order to tackle the scandal of women’s pensions – where, on average, today’s single women pensioners have an income £24 (e34) a week lower than single male pensioners,” Johnson said at a conference organised by the Association of British Insurers. He pointed out that only 16% of newly retiring women qualified for a full basic
state pension on the basis of their own contributions.
Caroline Slocock, chief executive of the of the Equal Opportunities Commission, also spoke of the pension disparity between the sexes.
She explained that the state pension system is still based on a “male bread-winner” social model with women still having “the lion’s share of caring” for children and the elderly.
Those who manage to keep working and do so part-time face a 40% pay gap an hour.
Slocock suggested an earning-linked pensions model with some elements of the current second-tier state pension as well as simplyfying the system and incentivise savings.
“This problem is not going away. It is a national scandal and we do need action,” she said.
“There is pension poverty out there and if anyone knows a better way of tackling it without means testing, please let me know,” said pension minister Wicks.
Wicks also commented on the private sector, saying that that 4.5 million workers with access to a pension scheme have failed to join.
He added that the next Turner report, due to be presented by the Pension Commission, headed by Adair Turner, next October would help the government to decide whether to “grasp the nettle of compulsion”.
He told delegates there were “many, many advantages” but stressed that the government had not yet decided and the issue needed careful
“It has to work,” he said adding that the solution could lay with “voluntarism with an edge”.
“This is not a left-or-right issue,” the minister said.