UK - The National Association of Pension Funds (NAPF) has warned against the "bureaucratic nightmare" of early access to pension savings, urging the government to instead focus on the successful implementation of auto-enrolment.
Allowing pensioners to access savings ahead of retirement will serve as a distraction and increase dependency on the state pension, the organisation's chief executive Joanne Segars said.
She praised the government's willingness to explore more flexible approaches to workplace pensions as an incentive toward saving, but warned that allowing early access would only serve as a "distraction, not a solution".
"People will be tempted to dip into their pensions as a quick fix and instead end up with a serious, long-term problem years down the line," she said.
Segars added that the government would be better served by the successful implementation of auto enrolment, rather than adding additional layers of complexity to the country's pension system.
The organisation said that withdrawal of funds would be particularly complicated for defined benefit schemes, where it would impact funding levels and actuarial forecasts, potentially prompting further fund closures.
Consultancy Barnett Waddingham questioned whether there would be much demand for early access to pensions, pointing to the NAPF's own research in the US - where members can access money in their 401k plans - saying only few were interested in drawing down funds ahead of retirement.
Malcolm McLean added: "Whether that would in turn amount to a 'bureaucratic nightmare' as the NAPF describes is debatable, but it would certainly cause administrative problems for schemes, the extent of which would depend on exactly how the rules were to apply.
"The ball is now in the government's court, and it will be interesting to see which way they decide to jump.
"The arguments for and against are finely balanced, but, given the level of opposition from the pensions industry, as represented by the NAPF, and unless or until it can be shown conclusively that more people, not less, would be accumulating pension savings as a result, it would be surprising if they chose to go ahead."
Meanwhile, State Street has been reappointed as global custodian of the Pension Protection Fund (PPF).
State Street, which was named custodian and administration provider at the £5bn (€5.8bn) lifeboat funds' inception in 2005, was later asked to assist with risk analytics, as well as valuation of over-the-counter derivates.
With the new five-year contract, which came into effect at the beginning of the year, the PPF has further asked it to take charge of securities lending.
Martin Clarke, executive director of financial risk at the PPF, said it was important for the appointment to select a firm to best meet their interests, especially at a time when the scheme was diversifying into new assets.
Securities lending was included as one of several new assets allowed by the PPF when an updated Statement of Investment Principles was unveiled last year.