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Politicians will be judged on commitment to workplace pension reform, says ACA

Politicians will be judged on their commitment to workplace pensions reform at the next election, according to the Association of Consulting Actuaries.

Chairman Keith Barton says the pensions industry, as well as the public, will be examining the stand politicians take on developing imaginative policies to promote private sector pensions.

Barton says: “For the last five years we have been commending to Government and both houses that there should be a new ‘middle way’ occupational pension solution available to employers which sits between defined benefit and defined contribution arrangements.

“These schemes would provide reasonably predictable levels of retirement income for members but would be free from some of the burdensome guarantees which have led to he demise of current schemes.”

In July, the ACA will give evidence in support of the ‘middle way’ alternative to defined contribution schemes to the review body looking into MPs pensions.

The ACA believes this approach should be a model for both private and public sectors because it keeps costs down and provides greater certainty of benefits than defined contribution schemes.

Ample Financial Services director Colin Parkin says introducing a middle way is just a way to reduce pension benefits and is likely to push back the age at which people are able to retire to 70.

Parkin says: “The new people coming through are working less, so we cannot afford to pay with the way the system is now.”

He says that at the moment there are two different types of pension systems, one enjoyed by Government and one for the “rest of the world”.

He says: “We need to make it the same for everyone. But we do not have the relevant people in position to solve the problems.”

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