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Smith says Govt is not bringing in compulsion

Work and Pensions Secretary Andrew Smith has indicated that the Government will not introduce pension compulsion on employers or employees and has issued a call for an employer taskforce to aid the Green Paper consultation.

Smith told a CBI conference in London this week that he wanted to build on Britain&#39s tradition of voluntary occupational provision, leaving delegates in little doubt that compulsion beyond current National Insurance contribution limits is not on the Government&#39s agenda.

He also warned against employers using a switch from defined-benefit schemes to defined contribution as a cover for cutting contributions.

Smith&#39s announcement comes as Shadow Work and Pensions Secretary David Willetts pointed to fresh Opra figures showing that the number of live occupational pension schemes fell to 103,300 in 2001/02 from 130,300 in 1998/89, which he branded another piece of evidence of the decline of the occupational pension scheme.

Smith said: “We have a tradition – a strength that has served us well – of voluntary provision and I want to build on that tradition in a framework that makes it easier for people to make informed choices.

“For the Green Paper, I want to set up an employer taskforce to bring together big business leaders to build a consensus on improvements to employer-based schemes.”

CBI deputy director general John Cridland said: “We welcome the fact that compulsion is not on the Government&#39s agenda. The TUC wants it but employer compulsion on pensions would hit many com-panies hard.”

Clerical Medical pensions strategy manager Nigel Stammers says: “Compulsion would only be necessary when everything else has failed, not least because it is difficult to settle on a rate of compulsion that is right for everyone. Incentivisation still has a lot going for it before we get to compulsion.”

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