UK - Government plans for pensions reform have been criticised by a leading economist for lacking an economic overview.
In a paper, entitled ‘Pensions’ Crisis! What Crisis!’, the economist Robert McDowell says the government has not properly considered the beneficial effect on the economy of it increasing its spending on pensions.
And he points out that current government spending on pensions is lower in most other European countries.
He said: “The truth is that doubling the provision in government spending for pensions is affordable by the economy, would be good for the economy and could reduce pensioner poverty dramatically.”
He added that the effect on tax rates would be small – as pensioners would be taxed on any additional income they rec-eived – and that the effect could be “zero” if the government made more bonds available.
This would be very cheap for the government as it currently holds around £125bn of pension money in gilts that it could market to release additional cash for pensions.
But others in the industry have questioned this approach.
Standard Life senior technical manager John Lawson said that any additional income raised by the government should be used to meet projected deficits in future tax revenue that would arise through a future decline in the working population.
The Salvus Master Trust will welcome another 1,200 members and 20 employers as it absorbs the £7m Complete Master Trust.
Aon has appointed Emma Adair to lead client service for its UK investment team.
The Competition and Markets Authority (CMA) has published three working papers as part of its probe into investment consultants and fiduciary managers - saying it has no concerns over concentration in these markets.
In this week's Pensions Buzz, we wanted to know whether contract-based, trust-based or a master trust arrangement would be best for a new defined contribution (DC) scheme.