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Actuaries castigate Government for turning firms away from pensions

The Association of Consulting Actuaries says Government is failing to put enough priority on encouraging employees and employers to make more substantial pension contributions.

Chairman Gordon Pollock says the Government&#39s most recent reform proposals, published in June, fail to encourage employers to continue with defined-benefit provision. In particular, he says there is almost nothing in the proposals to help firms which have not yet established occupational schemes.

The main measures may deliver greater protection for some existing scheme members but Pollock believes they are defensive and likely to turn an increasing number of employers away from their existing occupational arrangements.

Pension policy will have repercussions in several areas, he says. He believes there will be lower levels of pension contributions from employers and far more employees will be financially disadvantaged as employers react to the new forward liabilities being placed on them. He also says fewer new employers will offer any pension arrangements apart from stakeholder.

Pollock believes the Pensions Commission will have a key role in determining what part a voluntary app-roach will play in UK pension saving beyond 2005.

He says: “The most recent reform proposals have very little in them that will encourage employers to continue with defined-benefit provision. They are likely to turn an increasing number of employers away from their present occupational arrangements.”

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