Retirement

White paper proposals for simplifying the state pension system have been broadly welcomed but the role of advice still needs to be addressed to show the government has learnt its lesson from stakeholders, claims Alexander Forbes Financial Services.

The bulk annuity market looks set to expand from a market dominated by just two companies, to a more competitive sector with at least four new entrants announced in as many months.

Proposals to abolishing contracting-out for defined contribution (DC) pension schemes outlined in yesterday's white paper has caused concern among some sectors of the industry.

The Financial Services Authority (FSA) has announced it will delay its decision on the future of RU64 following publication of the government's white paper on pension reform.

The white paper on pensions reform has been given a lukewarm reception by the two opposing political parties, with the Liberal Democrats saying while some parts are welcome, the reforms will ultimately fail to deliver a pensions solution.

The Pensions Commission and the industry as a whole have broadly welcomed the government's white paper detailing its proposals for pensions reform.

Reforms to the state pension system announced in the DWP white paper will see a simplified system with a contributory principle to benefit women and carers apply to all people reaching state retirement age from 2010.

The department for work and pensions white paper on pensions reform - Security in retirement: towards a new pensions system - runs to 222 pages, but the main points are listed below.

The Financial Assistance Scheme (FAS) will be extended to assist eligible people who were within 15 years of their scheme pension age where their scheme collapsed on or before 14 May 2004.

Proposals to abolish contracting out of defined benefit (DB) schemes will be subject to ongoing review, but legislation to convert guaranteed minimum pensions rights into scheme benefits will be introduced as soon as possible.