UK – The UK government says it will propose simpler regulation and better “information flows” in its long-awaited Green Paper on pension reform.
“The Green Paper will establish the parameters for discussion and set out important proposals on reducing and simplifying regulation, on improving information flows, and on increasing the level of saving,” said the government’s financial secretary Ruth Kelly.
The call for greater transparency comes after pension consultant Watson Wyatt highlighted the need for greater communication about defined contribution pension schemes to avoid the possibility of another pension “mis-selling” scandal.
Kelly told a conference in London: “The next step is to engage with the experts in accounting firms, solicitors, life offices, investment houses, investment performance measurers, consultants and actuaries, independent trustees, external pension administrators, and consumer groups, to take the proposals forward.”
“We want to widen access to employer sponsored pensions, and to drive down costs so more of the money goes into the pensions pot,” she said, adding that more than a million new stakeholder pensions have been sold already.
“Complex and opaque rules and regulations have not made it any cheaper for employers to run schemes or any easier for individuals to understand them,” Kelly said. “Our first task, as we work to increase the level of pension saving, must be to reduce the complexity of the rules which govern it.”
She said that employers must pay their part. “The best employers already operate transparently, work through consultation, offer information to their employees, and highlight the important part that pension contributions play in the overall remuneration package.” She said that employers who close schemes or cut contributions with little consultation and no warning are “quite simply unacceptable”.
The Green Paper is scheduled for release on December 17.