UK - The UK pension system does not live up to what should be expected of such a system in a wealthy democracy, according to left-wing think tank The Industrial Society in its response to the Private Pensions Simplification Review.
Yvonne Bennion, policy specialist, said: “It is important to maximise the proportion of every pension contribution to finance any final benefit. Working through a partnership to standardise benefits, communication and administration, would deliver the economies of scale we currently lack. We need to learn from research and from other countries' innovations, rather than assume we know best.
The Society's conclusions and recommendations include:
* Drawing a line under contracting-out from a certain date, with schemes from then on sitting on top of State provision.
* The State should take action to equalise guaranteed minimum pensions, since nothing satisfactory can be done by pension schemes within the current statutory framework.
* The combined benefits forecast project needs to be more ambitious, and needs a common platform to be created within the pensions industry. * Current protection for members with deferred or transferred pensions is weak. The Government could provide tailor-made securities to allow schemes to get deferred pensions off the books.
* Instead of requiring every scheme to draft its own communications material, standard statements should be provided which each scheme could customise as necessary.
* There needs to be a programme of encouraging the large number of tiny schemes to convert to personal pensions, with the threat of full enforcement of all the occupational regulations if they do not.
* Opra's role as a reactive regulator requiring whistleblowers to inform it of breaches of the law is not satisfactory, and is more onerous on employers than requiring them to submit an annual return would be.
* The MFR is fundamentally flawed and should be replaced by a government-backed system of mutual insurance.
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