Pension News Voluntary Pension Contributions May Be Doomed

01 February 2005

Employees might be forced to contribute a percentage of their salary towards a pension plan, according to a new report.

Actuarial consultancy Punter Southall has said pensions should be partly funded by forced contributions from both employers and employees, and partly by an improved voluntary system.

Danny Vassiliades, of Punter Southall, commented: “Compulsion is part of the solution to the pensions crisis.

“We are living in a world of hard choices and we need to accept that improving voluntary pensions contributions will not be sufficient on its own: either compulsory contributions or higher taxes are inevitable.

“We believe that providing a higher state pension by raising taxes would be both politically unacceptable and would represent poor value for money, so leaving compulsion as the only viable way of ensuring that all pensioners have a decent standard of living in retirement.”

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Written by Editorial Team