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UK's Turner warns on obesity and pensions

UK - The chairman of the Pensions Commission, Adair Turner, has warned that rising obesity could hit pension dependency ratios in the future.

He said that obesity and infectious diseases like AIDS "could make the problem of dependency ratios worse" in that they could kill or incapacitate productive workers.

Speaking at an event at the Cass Business School organised by Watson Wyatt, Turner stated: "This whole issue of life expectancy is important for us on the Pension Commission."

He cited the "evidence of my own eyes" that there are more active 67-year-olds nowadays - although there was not enough scientific evidence. He said: "That is the evidence for the raising of the retirement age."

Turner was responding to a lecture by University of Chicago professor Jay Olshansky, who said there is "whole suite arguments" why human longevity is unlikely to continue to rise.

These included bio-demographic, bio-mechanical, biological and stochastic factors - as well as the rise of obesity and infectious diseases.

Olshansky, who expects life expectancy to fall in the US in this century, is engaged in an academic dispute with James Vaupel, founding director of the Max Planck Institute for Demographic Research. Vaupel is to present a second Watson Wyatt lecture - entitled "Broken Limits to Life Expectancy" - on March 23.

Meanwhile, Cass's Pensions Institute has released research that UK's stakeholder pensions are a "lottery".

"Individuals with a lack of investment knowledge should feel confident that their money is being invested in the best possible way," said Professor David Blake, director of the institute.

"Instead they enter into a lottery. They assume that the default option has been selected to meet their requirements, but it appears that in many schemes the choice has been quite arbitrary.

"This lack of consensus about the best investment strategy suggests that many of these schemes are poorly designed."

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