The Government plans to launch a multi-million pound advertising and education campaign promoting st...
The Government plans to launch a multi-million pound advertising and education campaign promoting stakeholder, pensions minister Jeff Rooker announced to the NAPF.
Rooker, speaking to delegates at the annual NAPF conference last week, said: "We have to sell to the public the need for second pension provision. We also have to find the resources to do that. It's going to be worth mega millions as far as media and education campaigns are concerned. We are not in the business of selling individual products but we will ensure that the ground is fertile so when people come to meet a provider, maybe through an employer, people will be aware this is what the Government wants them to do."
Ann Robinson, director general of NAPF, said the campaign should not specifically target stakeholder pensions but should aim to promote pensions across the board.
The NAPF has warned that the Government is in danger of setting up a two-tier system of pensions through targeting stakeholder pensions at people who earn between £9,000pa and £20,000pa.
Alan Pickering, chairman of the NAPF, said: "When I first came into pensions 25 years ago, the colour of your collar determined the quality of your pension. This is no longer the case. It would be a shame if, by concentrating stakeholders on the low paid, our pension system became class-based once more.
"The Government runs the risk of creating pensions apartheid by using stakeholder pensions to target those in the low income bracket who are not making pension provision. Occupational pension schemes can do a good job across the income spectrums so too can stakeholders."
The 300 delegates at the conference unanimously agreed that the Government would not reach its target of having 50% of people within the £9,000-£20,000 pay range currently without a pension taking out a stakeholder pension within five years of launch. The delegates believed it likely that compulsion will be introduced.
In his speech, Pickering also called for concurrent membership of all forms of pension schemes to be allowed. Defined benefits were left outside the Government's proposed defined contributions regime, which allows parallel membership.
Pickering said: "Defined benefit plans are too important to be left out in the cold. It would be a tragedy if this facility was denied to nine million people because of a fear that a minority would defer too much tax."
Rooker told the conference that the issue of parallel provision with regards to defined benefits schemes has not been ruled out by Government.
He said: "If the industry can come up with a proposal that works in a way which doesn't rip off the Inland Revenue and can make the case for the need for doing this, then we are still open minded about that."
Ceremony will take place 13 November
300 organisations signed charter
Tough year for the sector
Targeting annual yield of 4%