Pension tension as coalition cracks appear
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Nigel Waterson says political tensions in the coalition means the new Government is working to a reduced timescale for pension reform.
He said the tension between the Tories and the LibDems make it unlikely that the Government will last the full term.
Waterson said: “In the world of pensions, we may have swapped a four or five-year timescale for one of two or three years.”
He said the LibDems, in particular, would come under pressure from their voters and suggested that, with falling support in the polls already, many MPs will start to question the wisdom of remaining the junior partner in the coalition.
Waterson said the one thing that is holding the LibDems in the coalition is the promise of the vote on electoral reform scheduled for next May. But he said that, after this, the LibDems will have less and less reason to remain part of a coalition. He says: “The coalition will hang on until at least May and the vote on alternative voting systems.”2004 pension architecture.”
Waterson said the CBI has estimated that if Solvency II equivalent rules are introduced for pension funds, British companies could need to inject an extra £500bn into their final-salary pension schemes.
He said: “Whoever is in Government, we need a firm policy of resisting further encroachment from the EU. My concern is over the tension between the impeccably Euro-skeptic Iain Duncan Smith and the Europhile LibDems.”
Waterson urged ministers to focus heavily on UK pension reform in the coming months.
He said: “What issues should be at the top of ministers’ in-trays? I believe they are tax relief, annuities, Nest and workplace pension saving, basic state pensions, the state pension age and default retirement age, public sector pensions and EU regulation.”
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