UK - Consultants have accused the government of "ducking" the complex issues facing the pensions industry.
Mercer Human Resource Consulting’s head of retirement research, Paul Greenwood, said that while the government had sensibly proposed removing the excessive complexity of pensions regulation, it had only addressed the easy issues.
In particular he criticised the government for not scrapping the complex regime of contracting-out.
He said: “We do not believe the government has brought in sufficient incentives to stem the tide of employers reducing their commitment to occupational pension provision.
“Once more, it is an opportunity lost.”
Gissings director of corporate affairs Rodney Jagelman doubted whether the proposals would be enough to stem the tide of scheme closures.
And he was sceptical of the government’s proposals to change the minimum funding requirement.
He said: “Using a scheme-specific solvency method instead of the MFR ducks the problem. Who is going to decide what is, or is not, an acceptable funding standard?
“To state the obvious: a weak funding standard may be good for employers and a strong funding standard is good for employees.”
But Hewitt Bacon & Woodrow praised the Green Paper – specifically the tax changes.
Pension consultant Michael Pomery said the proposal of a £1.4m limit on tax concessions for an individual’s pension pot was uncharacteristically bold and radical.
And he added: “The Inland Revenue’s idea of a lifetime limit is unique around the world.
“The removal of red tape will not only reduce administration costs, but will also give a much greater incentive to employers to develop innovative and flexible pension designs that cope with the realities of the modern business environment.”
But he warned that continued dithering on reforming the protection regime could lead to further hardship and a loss of confidence in company pensions.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
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