The Pensions Bill's failure to safeguard existing good pension schemes represents a distraction from personal accounts' core function and target market, says the Association of British Insurers (ABI).
Ahead of the ABI’s meeting with the Commons Pensions Bill Committee this afternoon, the association says the Government must commit to a transfer and annual contribution limit to complement rather than compete with existing good group personal pension (GPP) schemes.
The ABI says introducing complex additional features such as lump sum contribution facilities to personal accounts would greatly increase the schemes’ operational and behavioural risks. It calls on the Government to remove provisions allowing additional lump sum contributions above the annual contributions cap.
A statement from the ABI says: “Achieving the Government’s objective of improving pensions savings for several million employees via personal accounts will be challenging enough. The reforms should concentrate on getting the basics right to ensure that the core policy objectives are achieved.”
The ABI says the Bill contradicts ministers’ commitments and provides excessively broad flexibility regarding the reforms’ scope and nature.
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