UK - Restoring confidence in the pensions industry must start with changes to the state system, a report by the Pensions Policy Institute claims.
PPI director Alison O’Connell said private pensions could not flourish unless they were built on a “secure foundation”.
PPI’s ‘A Guide to State Pension Reform’ reiterates calls from key industry figures who previously told the government that it must revamp the state pension system as part of its pensions reform.
The comments mirrored those by industry heavyweights such as Society of Pension Consultants president Donald Duval and former NAPF chairman Peter Thompson, made in response to the department for work and pensions’ Green Paper.
Liberal Democrat pensions spokesman Steve Webb said the government would be building on a “sinking foundation” if it ignored the state system in its pension reforms.
“The state pension needs to form a solid bedrock of income in retirement, and I welcome the PPI’s attempt to push the issue back on to the agenda,” he said.
Conservative pensions spokesman David Willetts added that the consensus on reform of the state system now included almost everyone except the government.
“Ministers are imposing new policies on the industry, but they won’t tackle the problem in their own back yard.”
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.