UK - Leading consultants are joining forces to confront the TUC over compulsory employer pension contributions.
Mercer Human Resource Consulting and Watson Wyatt insist compulsion will not solve any of the UK’s pension issues.
Mercer European partner Matthew Demwell said: “Employees are beginning to take more responsibility for their own financial health. Inthis environment, they need better education and advice, encouragement and flexibility – not compulsion and regulation.”
Watson Wyatt pensions benefit specialist Colin Singer added: “If you contribute much less than 20% of pay it will be insufficient – getting employers to contribute will be miles too much for political acceptability.”
But TUC pensions officer Michelle Lewis said: “We recommend starting contributions at a lower level and increasing them over time. We also recognise that employees must contribute too.”
Lewis also dismissed Mercer’s suggestion that an increase in state benefit to £140 a week would provide a more realistic level of basic provision.
She said a “significant increase” in the state element of pension provision was unlikely given that the government’s stated aim is to reduce the state’s responsibility.
- The Pickering Report proposed compulsory membership of occupational pension schemes although lawyers say such a move could breach human rights laws.
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.