Industry concern over personal accounts scheme misplaced

PADA chief executive Tim Jones – who was the keynote speaker at Punter Southall’s pensions conference in London yesterday – said making the distinction between the scheme and employer duties is crucial.

"It’s not about personal accounts it’s about auto-enrolment. What is key is the new set of employer duties, auto-enrolment into a qualifying pension scheme.

"The issue the industry has is around this and not the personal accounts’ scheme. There will be a minimum contribution to meet a scheme’s requirements regardless what scheme you choose to do it in," Jones said.

He said it remained to be seen how this "new world" of pensions will pan out but added by 2050 there would be 50pc more pensioners than today – due to the retirement of the baby boomer generation – and at least two million people were under-saving for their retirement.

"PADA’s job is to create a low cost scheme, which employers should consider, because lifetime employment is a thing of the past. People move from jobs in large companies, to jobs in small companies – this is just the world of pension provision.

"Personal accounts’ one weapon is design. To create a great foundation for workplace pension provision, this is what is happening in 2012. The scheme will be designed for a target market to sit alongside workplace pensions," Jones said.