The Personal Accounts Delivery Authority (PADA) will ensure it does not present personal accounts as an opportunity for employers to reduce employee benefits, chairman Paul Myners says.
Speaking at the National Association of Pension Funds (NAPF) autumn conference today, Myners dismissed fears the scheme could lead to employers ending their existing schemes and levelling down benefits.
He says: “Although this is a risk that needs to be carefully managed it is not a reason to step back from reform. To do so would be to deny millions of people real access to a meaningful workplace pension for the first time.
“As the Pension Commission said 56% of the private sector workforce, including self employed people, currently has no occupational or private pension provision to supplement their state pension.”
He also repeated the words of Pensions Minister Mike O’Brien earlier today that personal accounts will complement rather than compete with existing pension schemes.
Myners says: “It(personal accounts) will not aggressively enter the market with the aim of taking business from good existing workplace schemes.”
He also says the scheme’s success hangs on employer and employee understanding of personal accounts. He says the scheme needs “simple and straightforward” messages and PADA will provide transparent communication.
He says: “Keeping our focus on clear simple communications is essential, but challenging. We aim with automatic enrolment to strongly encourage people to save while at the same time leaving them free to decide to opt out.
"The messages that accompany automatic enrolment need to be carefully designed to balance the need to make people aware of the benefits and the risks of saving.”
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