UK - The National Pension Saving Scheme (NPSS) could cause "lethal damage" to the nation's existing pension arrangements and should not be viewed as a cure-all solution, Watson Wyatt partner Alan Pickering (pictured) is expected to tell delegates at a pensions conference in Edinburgh.
The NPSS should rather be seen as one recommendation among many, Pickering is expected to say.
It should take account of collateral damage that its introduction could cause to those parts of the UK pension system already working well and that could work even better if only they had a more sensible legislative framework within which to operate.
“The NPSS could do lethal damage to the fabric of existing pension arrangements in the UK,” he is expected to tell delegates at this week’s National Association of Pension Funds (NAPF) Investment Conference. “Successive governments have sought to launch a “sound bite” pension product that is seen as a cure-all.“
According to Pickering, diversity was a strength and not a weakness of the UK pension system, and there is a need to consider all propositions. “There is a place for the NAPF’s super trusts, and there is a role for good quality pension products provided by the financial services industry.”
“Traditional single employer-based schemes are definitely not passed their sell-by date either. The NPSS is not a silver bullet but could do lethal damage to the existing fabric of occupational and personal pension arrangements.”
Pickering is also expected to call for the government to weigh the merits of all the recommendations coming from the Pensions Commission.
“The NPSS is but one recommendation and to me, the most unattractive recommendation. If introduced as proposed, it could do damage to existing provision, fail to play to the UK strength of diversity and lead to planning blight.”
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