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IPE special report May 2018

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UK sets out six pension reform principles

UK – Pensions minister Alan Johnson has set out six principles to underpin the reform of state and private pensions.

The Department for Work and Pensions said the principles would be the criteria against which further reform, including the recommendations from the Pensions Commission, will be evaluated.

The principles are: the pensions system must tackle poverty effectively; the opportunity to build an adequate retirement income for all; public pensions provision must remain sustainable; fair outcomes for women and carers; a better understood system; to go forward, where possible, in consensus.

"Pension policy spans Parliaments, governments and generations,” Johnson said. “As the Pensions Commission made clear, the full impact of the ageing society won't be felt for two decades so the last thing we need are knee jerk reactions offering instant solutions for today but no recognition of the burdens imposed on future generations.

The head of the employers’ group, the Confederation of British Industry, welcomed the move.

"The government's new principles for pension reform are welcome,” said CBI director general Sir Digby Jones. “The six principles are clearly ones to which we all aspire but as this paper demonstrates there is no silver bullet to solve the emerging pensions crisis.

"Ideas like compulsory employer contributions and the citizens' pension are too
expensive and could reduce individuals' savings - they are not the panacea many
are searching for and could do more harm than good.

"No one questions the need for a 'pensions' solution - and the CBI is fully behind efforts to build a consensus on a way forward - but getting agreement on how to meet the Government's objectives will involve some tough choices and require political will."

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