The Association of Consulting Actuaries' 2008 Small Firms Pension Survey contains some illuminating information about employers' intentions following the introduction of personal accounts.
For example, two thirds of employers expect levelling-down of pension contributions and more than half of employers say that their scheme does not pass the exemption test contained in the Pensions Bill.
This survey should act as a huge wake-up call to the Government. The Government's own surveys, conducted by research organisations with no background in pensions, suggest that all in the garden is rosy. Yet speak to anyone involved in real dialogue, with real employers, and they will tell you that the ACA report, with its gloomy findings, isn't far off the mark.
The exemption test, particularly the bit relating to contributions and qualifying earnings is unworkable for most pension schemes. Current practice is to use basic earnings to calculate contributions. Comparing basic against band earnings and reconciling the difference annually won't work. Employers and employees do not want surprise additional contributions sprung upon them.
We have ended up with band earnings for no better reason than 'that was what the Pensions Commission recommended' (to ensure a smooth interface with state benefits and a 45% replacement rate). There is also a paranoid fear that using basic earnings would have allowed unscrupulous employers to reduce basic earnings and thus their payments into personal accounts (despite the numerous blunt instruments at regulators' disposal to stop employers coughing without permission).
The toxic effect upon the thousands of existing pension schemes appears to have received little consideration. These are schemes, lest we forget, established by employers voluntarily.
Most people in pensions support the general idea of encouraging more people to save for retirement. That after all is our business.
Between now and 2012, a lot of work is needed to ensure that personal accounts encourage those without access to a good pension to start saving. Policy makers must solve some difficult problems that are blocking the way, such as the impact of means testing, and that will take time.
Qualifying earnings is an altogether simpler puzzle. There are several workable solutions. In selecting such a solution, policy makers should avoid trying to ensure that no one will be a penny worse off. They should instead concentrate on the big picture of more people saving a reasonable amount - particularly lower earners.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till