Senior industry figures are pleading for an early government announcement on pension tax relief restriction rules because "time is running out" for employers to implement changes.
The government said it will release the details in autumn, but LCP partner Jeremy Dell (pictured) said he feared this could be as late as December.
The new rules on tax relief are due to be implemented in April next year, but Dell said even if the details come out in September firms will have little chance to discuss and implement changes to benefits.
Dell said: “Companies don’t know who is going to be hit by this legislation and the extent to which people will be affected because we don’t know anything yet.
“If the government publishes its proposals next month in detail that only gives October, November and December to understand and digest legislation – employers will need to have started consultation before Christmas.”
Dell added late release of the details could cause more firms to pull out of defined benefit – and some could even pull out of pensions altogether.
He said: “If employers run out of time they might just go for the simplest solution to cut back on pensions completely and provide something as an alternative.”
Hewitt Associates principal consultant Tony Baily said: “Employers might not be able to change their scheme rules so they might have to consult with employees, which could take two to three months – so they effectively need to have communicated and made choices on it by the start of the year.
“If the government comes out in September with a clear view, that is only giving schemes about three or four months to make some fundamental decisions around the future of their final salary schemes.”
However, PricewaterhouseCoopers partner Raj Mody said the industry would prefer a decent workable outcome when it comes, rather than force the hand of government to regress to the unworkable proposals set out at the start of the year.
He said: “There are things companies can do by way of proprietary analysis even before the final regime has been announced.”
What made financial headlines over the weekend?
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000