‘Grave disquiet’ over occupational pensions - ACA

Nearly seven in ten firms say current policies in place to drive up occupational pensions are not having the desired effect, new research indicates.

A survey from the Association of Consulting Actuaries (ACA), questioning 392 firms covering more than 2.8 million members, finds 62% believe the new Pensions Act will in fact have the opposite affect by reducing occupational provision.

Moreover, 82% of those questioned say the Act will add to costs and not reduce them, which the regulatory assessment claims.

Adrian Waddingham, chairman of the ACA says firms are feeling ‘grave disquiet’ with public policy towards occupational pensions.

He says: “Something must be amiss when, having just passed a major Pensions Act after long and involved consultations, the Government - within weeks - is hinting a Pensions Bill will be a high priority in the next Parliament.”

Waddingham argues the 2004 Act was moulded in the tradition of public pensions policy stretching over the past two decades, with a theory that the drive up of occupational pensions should be encouraged by adding protective measures despite the adverse regulatory costs associated with such a strategy.

He continues: “Whilst we accept actions were needed to better secure the position of members through the Pension Protection Fund, the much-needed accompanying simplification agenda for occupational pensions was largely lost.”

ACA also finds nine in ten firms are in favour of a radical change in the State pension system, with a further 89% in support of the consolidation of the Basic State Pension and S2P, while a majority favour the abolition of contracting-out.

Following its submission to the Pensions Commission, the ACA says it will seek to take up with the new Government the following issues:

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