The government must review Pension Protection Fund and Financial Assistance Scheme levels of benefits or risk seeing pensioners becoming much poorer, Susan Andrews warns.
In an exclusive interview with PP, the Pensions Management Institute president-elect (pictured) said, while the PPF and FAS had been a “fantastic start” they were still only covering people to a level of 90% of their benefits subject to a fixed formula.
And she warned these members were also not getting pre-1997 increases in benefits something she feared would eat into pensions “significantly” in the future.
Andrews urged the government to conduct a review of benefits provided by the two life boat schemes to ensure members did not lose out.
She said: “They are not necessarily losing out at the moment by so much but in ten, 15 years down the line, I think there will be many poorer people in pensions.”
In the interview, Andrews also voiced her concern about the demise of defined benefit schemes and the switch to defined contribution alternatives with much lower contribution rates.
She said: “We seem to be deferring a problem, saving the costs now, but ultimately people won’t be able to afford to retire.”
Andrews also revealed the PMI would introduce an entry level qualification, the PMI Certificate (Cert PMI) tomorrow (1 July) as well as launching a Diploma in Employee Benefits and Retirement Savings.
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