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CBI sides with ABI to reject citizen’s pension

The CBI has joined the ABI in its criticism of the NAPF’s plan for a citizen’s pension and an end to contracting out.

The CBI has waded into the long-running argument between the pension industry’s two big trade bodies, warning in its response to the Turner Commission that a citizen’s pension – which was first put forward by the Liberal Democrats – would be unworkably expensive.

The NAPF is adamant that contracting out should be swept away as part of a wider simplification of state provision while the ABI wants contracting out to be kept but with improved incentives.

The CBI is backing the ABI’s call for an earnings-related state second pension. It wants to avoid pension compulsion and protect those most in need.

It also advocates a gradual move toward automatic enrolment rather than compulsion, as promoted by the TUC.

The TUC is calling for employers to contribute 10 per cent and employees 5 per cent. The NAPF backs automatic enrolment, believing that any form of compulsion must have an opt-out clause.

CBI director general Digby Jones says: “Supporters of a citizen’s pension are missing the point. A much bigger state pension is unnecessary and the country cannot afford it.”

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