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Actuaries in plea for final-salary pensions

The Association of Consul-ting Actuaries is calling on the Government, the pension industry and employers to save occupational pensions.

Speaking at the ACA&#39s dinner in London last week, outgoing chairman Mike Arnold said more imaginative solutions are needed to promote occupational pensions or pensioner incomes will have to be met through tax rises.

He said there was a danger of the Government being complacent about the pension crisis as many more employers review their occupational pension package.

Evidence that the ACA has collected from its members shows that fewer than four out of 10 final-salary schemes are now open to new members and many employers are reducing contributions to new schemes.

The ACA is finding that employers which are continuing with final-salary schemes are having to increase contributions greatly to cover for reduced investment returns and improved longevity.

Arnold says stakeholder pensions, the state second pension, the pension credit or new money-purchase scheme illustrations are not enough to encourage the saving levels which are needed for the future.

The ACA will be commissioning research this summer to establish what is happening with big and small employers and will send its findings to the Government.

Arnold warned that tomorrow&#39s taxpayers will have to support a growing band of pensioners with inadequate incomes unless there are more incentives to save or high levels of compulsion.

He said: “Coping with a fast growing grey population is going to be one of the biggest political and social challenges of the next few decades. Imaginative solutions, thinking the unthinkable, are going to be needed.”

Arnold has ended his two-year term as chairman of the ACA and is succeeded by Gordon Pollock.


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