The Department for Work and Pensions has outlined proposals which reveals the government's first step towards implementation of compulsory pensions.
In its publication entitled Simplicity,security, and choice: informed choices for working and saving, Andrew Smith, secretary of state for work and pensions, says the government is now looking at three options on compulsion:
These moves would be matched by the introduction of an "online retirement planner" enabling people to obtain an overall picture of pensions benefits derived from both state and private pension provision.
The planner is intended to help people calculate any savings shortfalls, pointing out how much more needs to be saves and/or how much longer the person is required to remain in work.
Smith says the government understands it must also improve people's understanding of pension issues, which is why it is proposing to introduce personal finance to the national curriculum.
At the same time, companies that do not offer pensions to their employees will be obliged to “provide a decent standard of pensions information”.
The DWP is also promising to increase the information flow it provides. Targets now include: nine million state pension forecasts sent out annually by 2005-6, three million combined pension forecasts by the same fiscal year, and ensuring the online retirement planner comes to fruition.
Smith adds the new proposals boost the “Informed Choice” agenda, which has already seen papers published on issues such as pensions simplification – including tax issues – extending the working life, and providing new protection for occupational schemes.
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