UK - Only one in 10 public sector workers have saved enough for a comfortable retirement according to a local government pensions expert.
The claim was made by Prudential - the largest provider of AVC schemes in the local authority market - head of public sector pensions Richard Harrison at the Local Government Pension Committee’s Annual Trustees’ Conference in York.
He said that the vast majority of people are concerned about their ability to enjoy their time in retirement and yet less than 5% were contributing to AVCs of top-up years.
Other speakers at the conference blamed “confusion” over pensions information for this lack of action by employees in the public sector.They saw the consultation document on the future of the Local Government Pension Scheme published last month as a chance to improve communication on pensions.
Office of the deputy prime minister, local government pension division head Terry Crossley said: “Top notch communications are vital. Too often the rationale for change has not been communicated accurately and effectively.
“Ministers would like to retain the intrinsic, essential elements of the current Local Government Pension Scheme, but develop new elements to produce a modernised scheme that is prescribed, final salary, attracts take-up from all staff, is easy to understand, flexible, includes partners and dependants and which has a fair and affordable benefits package.”
Employers’ Organisation for local government, assistant director (pensions) Terry Edwards said: ìIt is not just important to communicate the changes but also to explain why the changes have been necessary.
“One of the main things to get across is that these scheme changes are not for under-funding reasons but for demographic ones.”
He illustrated the changes by saying: “There are four workers for every pensioner today. By 2050 it is predicted there will be only two workers for every pensioner.”
This week's edition of Professional Pensions is out now.
Ben Gunnee reflects on 2018 and talks about the Fiduciary Management trends to keep an eye on in 2019
Lloyds Banking Group secured 630,000 new pension customers last year, according to its 2018 annual results.
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.