The TUC has again called for compulsory pension savings to be included in Government plans alleviate the current pensions crisis.
In its submission response to the Pension Commission, the TUC believes that in order to achieve a decent retirement, individuals need to save as much as 15% of their salaries, adding new compulsory system should see employers contributing 10% with employees the remaining 5%.
The trade body urges for a new compulsory savings regime to be operated by a group modelled in close fashion to the Low Pay Commission while incorporating unions, employer representatives and an independent brains trust.
The TUC adds in order to fund a compulsory system would require a hybrid of defined benefit and defined contribution schemes to be created where risk is shared alongside a ‘revitalised’ state second pension (S2P).
The TUC has also further argued for the basic state pension to be increased in line with earnings, while further attention should be applied to the needs of women, specifically with a new pensions settlement based on every individual female acquiring their own pension rights.
TUC General Secretary Brendan Barber says: “When we first proposed compulsion, most commentators said that we had little hope of making headway. Yet the tide is turning in our direction, and the Turner Commission’s first report made clear that it would be hard to solve the pensions problem without compulsion.”IFAonline
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