AUSTRALIA - Current proposals for the UK's national pensions savings scheme (NPSS) fail to address vital issues including fraud and employer insolvency, according to the architect of the Australian mandatory model.
Senator Nick Sherry, Australian shadow minister for pensions, suggested the UK had the chance to solve these problems now as well addressing issues such as portability which were dogging the Australian model.
The senator’s remarks were based on a paper “Breaking New Ground: A new private pension model for the UK – some issues to consider” by Tor Financial Consulting.
“There are, for example, currently no suggestions as to how next of kin could access a person’s savings or what would happen if a firm became insolvent without having made the necessary contributions for it’s staff,” Sherry said.
He added: “If an employer is required to pay on a quaterly or half yearly basis then it could be quite a substantial amount of money that people could loose out on.”
He also suggested that 20% to 30% of people could opt out of the system and said the actual mechanics of how this would work had yet to be worked out.
“These are all areas which have not been given the attention they deserve,” he said.
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