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TUC and Which? attack ABI’s new pension submission

The ABI has again failed to prove its case that insurance companies can provide a better model for running Personal Accounts, says the TUC.
Speaking after the ABI unveiled the latest version of its proposal for how the scheme should be run, TUC general secretary Brendan Barber says the trade body’s submission is still overshadowed by the NPSS model set out by Lord Turner.
Barber welcomed the ‘many sensible points’ in the ABI’s paper and the fact it had tried to meet some of the criticisms of its earlier proposals.
But he says it is wrong for the ABI to suggest a random carousel system for the default option and to oppose both a limit on costs and a cost structure based on percentages.
Which? has also attacked the ABI’s new submission for similar reasons to the TUC, with personal finance campaign team leader Doug Henderson saying there is no appetite among the public for the ABI’s branded scheme.
Barber says: “This all fails the low and average paid workers who are meant to be the main beneficiaries of the new pensions scheme. People’s pension savings are too important to be left to the random workings of a carousel.
Expecting competition to keep charges down among pensions providers would be a triumph of hope over experience. Moving to flat rate charges would hit the lowest paid the hardest, and at a stroke deter thousands of lower paid workers from joining the NPSS.”

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