UK - The government is piloting the pensions world "almost" blind and without instruments, Tory leader Iain Duncan Smith told the party's pensions summit.
At the meeting, which was attended by the TUC, the CBI, the NAPF and the Association of British Insurers, he resumed his party’s attack on the government’s £5bn a year “tax raid” on pension funds.
And he called into question prime minister Tony Blair’s claims that pension scheme gains from the bull market years were still intact.
Duncan Smith said: “The truth is that the stock market is well below the level it was when the ‘pensions tax’ was introduced in 1997 and surpluses are all but gone, but £25bn has still been taken from our pension funds and continues to go at the rate of £5bn a year.”
He then went on to claim that the “miserly” uprating of contracted out rebates were in fact a lesser known “stealth tax” by the government.Duncan Smith quoted Mercer Investment Consulting figures which estimate that the rebates are 15% below the level necessary to provide contracted-out benefits.
He said that as rebates for all forms of pension run at approximately £11bn, this 15% shortfall represented an additional tax of £1.5bn a year on pensions.
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