UK - Creating a legislative "fortress" around those in pension schemes will condemn millions to live without a decent retirement income, Simplification Review chief Alan Pickering warns.
Pickering insisted that the best way for everyone to accumulate pensions was to slash the amount of legislation surrounding them.
Pickering said: “There is often great concentration on the needs of those who are in pension schemes without taking due regard to those who should be in pension schemes.”
He added: “If we build a protective fortress around those who are in pension schemes we will condemn millions to be on the outside looking in because we will create entry stakes which are too high for employers or individuals to pay.”
Pickering said three themes underpinned his review. These were:
- Basing the regulatory regime surrounding pensions more on principles than rigid prescriptive legislation.
- Reducing the number of types of pension schemes from more than 20 to just two or three and then minimising the difference between them – or, in Pickering’s words, “a pension is a pension, is a pension”.
- Making it as easy as possible for people to accumulate pensions through both the workplace and marketplace.
Pickering explained: “At the workplace we need to strike a fair balance between the employer’s ability to design the pension scheme and the members’ desire to have a pensions promise honoured.
“And in the marketplace we need to strike a balance between giving providers commercial freedom to sell appropriate products to appropriate people without condoning bad practice.”
Pickering is due to submit a final draft of his report to the Department for Work and Pensions by the end of this month.
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