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LibDems offer compulsory alternative to stakeholder

The Liberal Democrats have issued a discussion paper outlining their proposals for an alternative to stakeholder.

The scheme, called Owned Second Pension Account, would include full concurrency, compulsion both on employees and employers to contribute to the account and freedom for individuals to choose a provider.

It would be run by the private sector but regulated by strict criteria governed bythe principles of value for money and customer service standards.

To ensure that customers are protected, the LibDems propose a separate arm to be created within the FSA specifically to regulate pensions.

In addition, the Lib Dems would allow a third tier of voluntary pensions, where individuals would be able to con- tribute to Ospas or approved private schemes.

These proposals are not yet party policy and will be debated at the party&#39s conference in September.

Industry sources welcome the proposals as sound ideas but caution the difficulty of implementing them as practical initiatives.

Scottish Life head of communications Alisdair Buchanan says: “It sounds like a lot of good things there. The difficulty would be in translating good ideas into sound and workable proposals.

“Other parts of it, such as what the rates of contribu-tion would be, would need more work.”

Social Security spokesman Steve Webb says: “We are not afraid to use the word compulsion. Rather than stakeholder being something that one or two million people take out, everyone not ina good company scheme should have one.”

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