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ACA: Gov’t has failed to reinvigorate private pensions

Association of Consulting Actuaries chairman Stuart Southall says the Government has so far failed to deliver on its commitment to reinvigorate private pension saving.

The agreement, signed following the formation of the Conservative-Liberal democrat coalition in May, pledged to “reinvigorate occupational pensions”.

Speaking to Money Marketing ahead of an ACA speech last night, Southall urged policymakers to come up with “positive ideas” to deliver on the pledge.

He said: “To me, that coalition pledge read like some positive action, and that positive action needs some positive ideas. There clearly are some ideas there and when there’s a political will there seems to be the ability to put them forward.

“Now the DWP started to clear the decks, with Nest confirmed, the tax changes for high earners completed and state pension reform under way, my plea would be for the Government to turn its focus to that coalition pledge.”

Southall said pension risk-sharing, where defined-benefit and defined-contribution provision are combined, should be considered in more detail by the DWP.

In an interview with Money Marketing this week, pensions minister Steve Webb suggested the Government’s immediate focus was on driving through the current reform agenda.

He said: “There’s a lot to be done on the current agenda. The state pension green paper is a great first step but there’s a lot more work to be done on the proposition.

“Likewise with auto-enrolment, making it a success and not a flop is pretty crucial and there’s plenty to be done on that as well.”

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  1. Julian Stevens 8th April 2011 at 9:45 am

    The central plank of the coalition’s pre-election promises on pensions was that it would undo all the damage done to private pensions by 20 years of misguided government meddling, mainly under Crash Gordon. Apart from NEST, which I don’t think is the right way to go about it anyway, we’ve so far seen no action at all in line with that pledge.

    What about restoring Contributions Insurance (WoP)? What about restoring life cover as an integral element of a PP (subject only to payment of a minimum level of contributions to retirement benefits)? What about lifting the tax raid on dividend income? What about removing the shackle of annuity rates from retirement income levels? What about simplifying contribution limits? What about removing the LTA? What about removing the punitive tax charge on unspent funds in retirement?

    The list of things that need to be addressed is pretty straightforward and the relatively minor loss of tax revenues to the Exchequer would, I submit, be more than offset by the long term benefits of more people saving towards the accumulation of a fund to provide them with an independent retirement income.

    So far, this promise seems to have been nothing more than typical pre-election empty guff to win votes. Is it any wonder than people remain deeply cynical about anything that politicians promise?

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