ABI Says Personal Pensions Must Complement Existing Products

18 May 2007
The new personal account pensions must complement, not compete with, existing pensions provision, the ABI’s director general, Stephen Haddrill, has warned.

Although the government had promised the two schemes would be interdependent, it appears to be “failing to live up to that promise”, he claimed.

The government has said it is aiming for automatic enrolment into all work-based private pensions, but detailed EU legislation means that auto-enrolment into work-based Group Personal Pensions may not be possible, Mr Haddrill remarked.

If the EU legislation takes precedence, “unfair discrimination will be created between the different forms of work-based savings”, he warned.

Auto-enrolment should be avoided if it results in a “two-tier workplace pensions structure” which would divide employees on private schemes from those provided for by the personal accounts, he said.

The Department of Work and Pensions must take steps to ensure its policy measures do not impinge on “existing good pension provision”, he stressed.

Nevertheless, he commended the government for its work so far in seeking to realise its “idea of expanding saving and increasing the number of savers”.

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Written by Editorial Team