UK - Coverage of high-profile scheme funding crises has diverted ministers from radical pensions reform, Simplification Report author Alan Pickering (pictured) claims.
And he warned that the government’s prescriptive approach would “inevitably lead to less pension”.
Pickering – speaking at a reception at law firm Norton Rose – claimed the Pensions Bill had moved away from deregulation outlined in his report and was instead bringing “micromanagment” of occupational pension schemes.
He believed the Bill’s current passage through parliament which was adding “amendment to amendments to amendments” would result in having “an old kind of Pensions Act with a vengeance”.
He added: “It is messy, ill-considered and complicated. More prescription will inevitably lead to less pension. We are in danger of providing more and more security for fewer and fewer people.
“Saddest of all, the Bill continues to tip the playing field against those employers who are prepared to share pension risks with their employees. An own goal if ever there was one.”
Pickering said the government had been diverted from simplification by coverage of a number of funding problems – such as ASW – where employees had lost pension savings when their firms collapsed, and shipping giant Maersk where a solvent company initially refused to cover a shortfall in a subsidiary’s scheme.
But instead of looking “through the windscreen” to find a system that could last 20 to 30 years, Pickering said the government was looking in the “rear view mirror”.
Pickering said this was a flawed approach, not least because while there was a lot of talk of companies “doing a Maersk” – walking away from pension commitments – Maersk had, in the end, done no such thing.
But he praised the government’s tax simplification reforms which exceeded his wildest expectations.
He particularly welcomed the scrapping of contribution limits, which meant that someone could boost their pension pot later in life by making one-off contributions from any windfalls, such as an inheritance.
He said this would also apply to employees in flexible benefits schemes who could choose to concentrate on other benefits or needs in their 20s and build up their pension later in life.
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