UK - Liberal Democrat shadow work and pension secretary David Laws has criticised the new Pensions Bill for not narrowing the gulf between public and private sector pension schemes.
The Bill has drawn mixed reactions from the UK pension industry, with other players welcomed the new proposals - which will raise the retirement age from 2024, reduce the number of qualifying years needed to receive a full basic state pension and restore the link to earnings.
Laws, however, claimed the link may not be restored until 2015, which meant the bill was less effective than it seemed.
“The proposals will do nothing to deal with the huge unfairness in state pensions,” Laws continued. He added the poor foundation of state pensions could result in the failure of encouraging people to save for retirement.
The shadow secretary was not alone in expressing his displeasure over the new bill.
Hewitt Associates claimed the government had missed the opportunity to give support to corporate pension schemes in the UK.
Robert Meek, principal pensions consultant at Hewitt Associates, said: “While the easements in the bill are welcome, we would have liked to have seen some more imaginative support for schemes. The bill sets a strong framework for future pension provision, but it lacks detail.
Mark Duke, principal at Towers Perrin, noted that, while the rise in retirement age was "a step in the right direction", it could not guarantee pension provision in 2046 will be covered.
Although the bill brought about some simplification to the state pension system, industry players claimed not enough had been done.
Joanne Segars, chief executive of the National Association of Pension Funds, said further simplification of the system would be needed once the current reforms have been bedded down.
Duke added: "We are still facing a legislative minefield which distracts from the key aim to help people provide for retirement.”
The pensions bill also set up a personal accounts delivery authority to deal with technical issues over the course of the introduction of the much debated the system of personal accounts.
Segars said the authority would help the process, but reiterated its warning that personal accounts could have adverse effects on sound existing pension schemes.
“Personal accounts could have a significant impact on existing pension provision if poorly designed and therefore the government must include consideration of the impact on existing schemes in the authority’s terms of reference,” she said.
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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