'Good but not good enough' was the overall reaction as the government yesterday unveiled its plans t...
'Good but not good enough' was the overall reaction as the government yesterday unveiled its plans to increase protection for occupational pension scheme members.
Following Secretary of State for Work and Pensions Andrew Smith's announcement that he would ensure that employers delivered on their pension promises, the industry responded with divided reactions.
The Consumers' Association criticises the government for failing to acknowledge the true extent of the 'pensions crisis'.
Warning that this could leave future generations paying for its mistakes for many years to come, the CA attacks the government for not addressing the wider picture.
Introduction of insurance fund for final salary schemes is all well and good, says the CA, but it doesn't solve the problem on a grand scale as only one in five of the working population is an active member.
"If the Government thinks the action it has proposed today (Wednesday) solves the pension problem then it either doesn't understand what the crisis is or it lacks the political courage to deal with it," says Sheila McKechnie, director at CA.
Meanwhile, Scottish Equitable thinks the new proposal has become "political inevitable".
Scottish Equitable's pension development director Stewart Ritchie begs for vigilance.
He warns there is a "tightrope to be walked" between ensuring levies are high enough to fund the scheme but not too high so that employers will be discouraged to offer final salary pensions.
The Association of British Insurers also gave the government's announcement on the pensions green paper a cautious welcome, saying there are still "a number of important practical questions" remaining to be solved.
A lot more positive response came from NAPF that hopes this reform will act as a "catalyst" to rebuild confidence among pension scheme members.
Christine Farnish, chief executive at the NAPF says:
"The NAPF supports the government's moves to boost fragile public confidence in the occupational pensions system, and to strengthen the security of scheme members."
Also unveiled yesterday was the long-awaited date for the new simplified regime for taxing pensions.
Pensions guru and head of pensions strategy at Scottish Life Steve Bee applauds the announcement.
"Although less headline grabbing than news of a Pensions Protection Fund, knowing that the Government will implement the new simplified regime for taxing pensions from 6 April 2005 is massive for the industry."
Patting the industry in the back, Bee says the industry should take the credit for the settled date as the government at first wanted to implement the changes already in April 2004.
As well as proposing a pension protection fund, the government also intends to introduce a new pensions regulator.
But if this will replace Opra or not has not yet been confirmed.
Opra's comment on the government's latest move did not shed any further lights on the issue.
"We are not putting out a formal statement because it's a government policy issue but we are willing to comment as appropriate. But we do steer away from commenting on anything that is not fairly relevant to the regulator."
'Truly making a difference'
Avoidance, evasion and non-compliance
From 6 April 2019
Marcus Brookes appointed CIO