Government urged to set timetable for AE reform implementation

A survey by the association - which questioned 308 employers of all sizes - revealed 82% of respondents support payment of AE contributions from the first pound of earnings, while 85% support reducing the minimum eligibility age to 18.

It also found larger employers support raising the contribution level to a 12% minimum, with 82% of all respondents noting the April 2018 increase "did not impact adversely on scheme participation", and 81% stating the same following the April 2019 increase.

Three quarters (75%) of employers said the current pension tax structure is "too complicated" and "needs simplification", while 67% also said reform should target lower income groups.

The Pension Trends survey also revealed 70% of employers are opposed to the pensions dashboard launching without the inclusion of state pension benefits, and 64% of those running defined benefit (DB) schemes said it will take more than two years to fully equalise pensions for the effect of guaranteed minimum pensions (GMPs).

ACA chairwoman Jenny Condron said: "Without commitment from government to ensure that sums saved into AE are increased, we see little prospect that as a society, we will be able to address the fears of a growing gulf in retirement income from one generation to the next."

She added: "Whilst the re-tabled pension schemes bill will address certain DB scheme reforms that are needed, our survey findings stress that some important simplifications, facilitated by GMP equalisation and conversion, remain a priority if millions of members are to better understand the very valuable benefits of such schemes and enable employees to address any savings gap to their desired level of retirement income.

"The new government needs to build on the momentum for reform in its pension and savings strategy."

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• Topics
• Industry
• ACA
• Association of Consulting Actuaries
• Jenny Condron
• AE
• pension reform