UK - Legislation designed to protect pensions has the "perverse" consequence of leaving fewer defined benefit pensions to protect, the Pensions Management Institute (PMI) conference heard yesterday.
Hewitt consultant Kevin Wesbroom warned delegates that protective legislation was in fact causing employers to retreat to the safety of defined contribution schemes.
But DC carried its own problems, said Wesbroom, problems which would become increasingly apparent as the impact of age discrimination legislation started to bite.
In a pithy aside, Wesbroom added: “Pensions may no longer be needed since we will all work ‘till we drop!!”
Wesbroom was speaking with regards to the Pensions Act 2004, and pensions legislation associated with it.
While he allowed that a positive consequence of this legislation had been the higher level of funding resulting from the activities of the Pensions Regulator and the Pension Protection Fund, he said a downside had been the the shortage of index linked gilts.
Problems were often caused by the way legislation moved the goalposts, he said, “a habit which just had to stop!”
Minister for pensions reform Stephen Timms called on the industry to help the government solve what he called “the pension challenge”.
“Our task now is to lay the foundations for a clear and lasting deal between citizens and the state, and one which is safe from being pulled apart by successive governments,” he said. By Lisa Haines
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.