UK - Many companies are no longer willing to meet the regulatory and funding burdens of maintaining a pension scheme, the National Association of Pension Funds claims.
And in its response to the Department for Work and Pensions simplification review, the NAPF says greater flexibility in regulations would enable schemes to slash costs.
Suggestions to overcome these problems include eliminating duplicated regulation, giving watchdog OPRA more flexibility and simplifying disclosure requirements.
The NAPF said: “Given the large amount of goodwill in the pensions community, we request a greater degree of flexibility in the regulation of schemes. There is a need for recognition by the regulator that mistakes will happen.
“However, all regulation is a question of balance: the need to balance the protection of the public and the cost to the regulated.”
OPRA’s response highlighted the areas of benefit security and member understanding where standardisation would simplify significantly the requirements placed on trustees and employers.
The watchdog also highlighted the high level of repetition of pension products, and said that there was no need for both money purchase occupational schemes as well as GPPs or for AVCs and FSAVCs.
Meanwhile, the Industrial Society recommended that industrywide schemes – giving benefits of scale and modelled along the lines of the Dutch system – should be actively encouraged.
Industrial Society policy specialist Yvonne Bennion said: “We need to learn from research and from other countries innovations, rather than assume we know best. Working through a partnership to standardise benefits, communication and administration, would deliver the economies of scale we currently lack.”
By Jonathan Stapleton
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