UK - Incentives must be offered to safeguard the future of employer-sponsored pension schemes, the Society of Pension Consultants' new president claims.
Robert Birmingham – an actuary and managing director of Entegria – urged the government to offer “some sort of sweetener” to ease the additional burdens within the Pensions Bill.
Birmingham – who took over the presidency from Aon Consulting head of professional practice Donald Duval in June – does not expect any late amendments.
But he said employer backing was critical to the future of pension provision.
Birmingham added: “There is a lot of additional responsibility and administration in the proposals but no encouragement. Tax relief is the obvious area to concentrate on with financial aspects the prime, although not sole, driver of all of this.
“Granting tax relief to employers who invest over a certain amount in their scheme may be a solution, but in the mean time a few words of encouragement for occupational schemes would go a long way.”
Birmingham believes final salary schemes have “served us well but served their purpose” and sees defined contribution as the future of pension provision.
He said: “DB has become an anachronism – it does not fit with today’s business paradigm. But there is nothing wrong with a good DC plan with a decent rate of contribution and well presented investment options understood by members who subsequently can plan better for retirement.”
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