UK - The Government has proposed scrapping compulsory retirement ages as the cornerstone of its long-awaited Green Paper.
In a series of measures outlined by the Secretary of State for Work and Pensions, Andrew Smith, he suggested allowing people to work part-time and draw a pension from the same employer.
No changes were made to the State pension age which stays at 65. However, people who defer taking their State pension for five years or more could see a 50% increase in their weekly payment.
The Paper proposed raising the pension age in the public sector for all new entrants to 65 from 60. It also suggested drawing up new legislation to combat age discrimination which, if passed, will form part of a single, consolidated Act.
“We are determined to help more people carry on working until they are 65 and even beyond,” said Smith.
“At the moment a wealth of talent and experience in the work place is lost as people stop working too early. The Green Paper proposes to crack down on discrimination and sharpen incentives to help older people remain in work.”
The paper also promised the biggest ever shake-up of the pension tax regime. Proposals included introducing a single lifetime limit on the amount of tax-privileged pension saving - with a lifetime ceiling of around £1.4m and an annual limit of £200,000.
A reduction in red-tape was also put forward - this is expected to save employers some £150m-200m a year in administration costs.
The Paper also highlighted the need for more saver education among employers and their workforce.
Proposals also included junking the Minimum Funding Requirement in favour of more tailored investment practices. Trustees would also be subject to greater expertise.
The Paper responded to the recent spate of final salary closures by stating that employees must be consulted before any changes are made. It also proposed a new regulator to focus on protecting scheme members, particularly where there was a high risk of fraud or maladministration.
Despite an emphasis on voluntarism, the formation of an independent commission was also suggested to examine the issue of compulsion.
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