Pension News Savings Scheme Threat To Personal Pensions Warns Expert
14 March 2006
Existing personal pensions could be put at risk by the government’s plans to launch an automatic National Pensions Savings Scheme, one expert has warned.
Alana Pickering, author of a report prior to Lord Turner’s, said that the NPSS “could do lethal damage to the existing fabric of occupational and personal pension arrangements”.
He reasoned that the diversity of the current pensions landscape was a strength that could be threatened by the introduction of a scheme like the NPSS.
He said that to him it appeared “the most unattractive recommendation”, while company schemes still had mileage in them and employers had a key part to play.
However, “well-intentioned, but misguided, interference in workplace pension scheme design by successive governments has been the single most important cause of the withdrawal of employers from risk-sharing pensions,” he said.
As set out in the pension commission’s recent report, any worker without an occupational pension would be signed up to the NPSS automatically, although they would also be able to opt out.
Employees would pay in five per cent of their salary, with the company in question contributing three per cent.
Mr Pickering is due to address the National Association of Pension Funds (NAPF) on the matter in Edinburgh.