UK pension commission to report in two years
UK – The head of the new commission charged with reviewing the UK’s pension system, says the group will make its final report in two years’ time.
Adair Turner, the head of the new Pension Commission, said the commission would make its interim report in June/July 2004 and its full report in the autumn of 2005 – after the expected date of the next general election. He said the timing was significant, to avoid arousing passionate debate at election time.
Turner, a former head of the employers’ body the Confederation of British Industry, said the UK must recognise that it has similar pension problems to France, Sweden and the Netherlands.
“In the last five years there has been a large shift in risk bearing in our society,” he said. He made it clear that, due to “fundamental macroeconomics”, retirement ages will have to rise. “We have to find ways to employ older people,” Turner said.
He told delegates to a conference organised by the CBI and Mercer Human Resource Consulting that businesses have to think in a flexible way about pensions, and avoid either/or decisions about defined benefit or defined contribution. He talked of shifting the actuarial risk to the employee on the model of the Swedish state system. “The more flexibly business thinks the better for society,” he said.
Turner’s comments came after a top advisor to chancellor Gordon Brown said that the UK is well placed to deal with demographic ageing.
“The UK is … well placed relative to other G7 countries to deal with the challenges created by an ageing population,” said Treasury economic advisor Ed Balls in a speech.
“Demographics and the UK’s combination of a large private pension provision and a targeted system of state support will help to keep public pension spending under control in the coming decades,” he said. Spending was projected to remain “more or less stable” in the UK compared to between four and eight percent of gross domestic product projected elsewhere.