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Pension schemes &#39will not opt out of benefits&#39

Three-quarters of UK pension schemes believe proposals in the Pickering report on pension simplification do not go far enough to addressing the industry&#39s problems.

But while just over half of schemes say they would consider adopting Pickering&#39s proposal to make membership compulsory if demanded by an employer, the majority say they would not drop inflation indexation or spouses&#39 benefits, according to a survey.

The NAPF, which questioned 10 per cent of its 1,000 members, found that 75 per cent believe Pickering&#39s proposals are inadequate to solve the industry&#39s problems although 72 per cent think they would achieve some simplication.

Members are also concerned that the proposals would do little to encourage more saving.

Pickering&#39s controversial offer to relax controls on defined-benefit schemes would not be taken up by the majority of pension funds, with 76 per cent saying they would continue to provide inflation indexation and 81 per cent saying they would retain surviving spouse&#39s benefits.

Although 64 per cent of those polled think it unlikely that the Government would adopt Pickering&#39s proposal allowing employers to make scheme membership compulsory, 61 per cent say they would consider the option if it were offered.

Chief executive Christine Farnish says: “The message is that Pickering&#39s proposals would do much to simplify the pension regime but that more must be done to encourage retirement saving.

“It is reassuring that the majority of schemes want to retain additional benefits which many commentators feared might be jeopardised under the Pickering proposals. We would hope that many employers not currently providing pensions would be encouraged to do so if the rules were relaxed.”

Informed Choice managing director Nick Bamford says: “This shows the difference in reaction to the two reports out this summer. While the reaction to Sandler has been that he has put the cat among the pigeons, Pickering&#39s report is a non-event.”


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