UK – Former pensions minister Frank Field has said the National Association of Pension Funds’ call for a withdrawal of a £9bn (€13bn) national insurance rebate into pensions is “mistaken”.

The NAPF earlier this week defended its proposals to ditch the state second pension and associated rebates that go into occupational and private schemes, according to a report in the Financial Times. It said the association argued the cash should be put towards a more generous, non-means-tested, basic state pension.

Field cited the fact that pension deficits at UK firms have hardly changed in the last year, and said: “It is crucial that the right hand of pension policy knows that its left hand is not undermining its long-term objectives.

“The NAPF's strategy is mistaken on a number of grounds.”

Writing in a letter to the FT, he said the NAPF proposal “constitutes a massive tax increase for those people currently helping fund their future pension entitlement”. And it moved policy away from reaching the government's objective of increasing funded pension entitlement. The NAPF did not respond to a request for comment.

Field was minister for welfare reform from 1997-98 and is currently chairman of the Pensions Reform Group.

He said: “The Pensions Reform Group does see a real new role for the contracted out rebate. We propose that it goes into a new funded scheme that would run alongside the state pay-as-you-go scheme to offer a basic entitlement which over time takes everybody above means-tested assistance.”