UK - The National Audit Office "manipulated the facts" to reach its estimate that 10,000 people will be affected by the £1.4m savings cap, a consultant claims.
Mellon Human Resources & Investor Solutions says the figure – which is still double chancellor Gordon Brown’s original estimate – was the result of “asking the right questions to get the right answer”.
Head of technical services Kevin LeGrand (pictured) said the Treasury set the questions NAO used to calculate the figure so a number close to Brown’s 5000 estimate was inevitable.
LeGrand also claims forecasts that 1000 will be affected year on year thereafter is “seriously understated”.
But he claimed the industry was being forced to “play along” because the chancellor had threatened to scrap tax simplification unless there was “broad-based national consensus on the way forward”.
LeGrand said threatening to scrap the tax simplification package if agreement was not unanimous on one small part of it was extremely unfair.
He said: “When you look at the situation it makes your blood boil. It is unacceptable to push through tax simplification on a threat. We are being encouraged to play along with the chancellor because of the carrot he has dangled in front of us.”
LeGrand says the NAO’s figure does not take account of the fact that the 20:1 valuation factor used in the assessment does not reflect the actual pension that may be secured by a fund of £1.4m.
According to Mellon, employees with salaries as low as £55,700 will be caught by the pensions cap.
But consultants largely backed the NAO’s figure. Hewitt Bacon & Woodrow said the figures were “on the low side but not unreasonable”.
PricewaterhouseCoopers partner Peter Tompkins said: “The last thing we want to do is throw a spanner in the works – simplification for the vast majority will make things better.”
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