A spokesman for ACA said: "The Association of Consulting Actuaries fully supports the pursuit of a consensus in pensions policy covering both state and private pension provision. This has been a policy objective of the Association for many years evidenced by the support the ACA gives to the all-party parliamentary group on occupational pensions.
"Across the political divide there does seem to be a growing consensus looking to a higher basic state pension - issues remain as to whether this is financed over the long-term by National Insurance (NI) contributions or whether it should be provided as a 'citizen's pension' financed out of NI and general taxes, but not NI contribution based. Political consensus would also permit honesty about the need to announce now an increase in retirement ages to take effect in ten to twenty years time. All know such an increase is inevitable, and prior warning allows those concerned to plan for it. Raising state pension age makes a good level of basic pension affordable.
"Such a move could also reduce the need for means-testing which, again, is an objective all parties seem to support. On private pensions, should the higher basic state pension happen, the issue will be whether over and above the state pension there should be a voluntary private pension regime encouraged by incentives or whether compulsory contributions should be required. The ACA believes compulsion will tend to lead to low minimum levels of contributions, will be seen as a tax rise and the results may disappoint savers - not a position for which any of the political parties might wish to be responsible. The ACA therefore thinks that it is possible to seek a consensus that there should be a voluntary regime encouraged by incentives as basic living costs will be met by the higher basic state pension.
"This was the prevailing position in years gone by (through deliberately generous contracting-out terms) and we know that, with incentives, good employers were willing to establish good schemes. However as well as a financial incentive, sponsors will want to be reassured that they can amend schemes over time to allow for changing circumstances and any unexpected rising costs. The obvious safety valve for schemes would be the ability to adjust retirement ages if longevity continues to improve. More schemes would still be open today to new members if such a sensible step were possible."
Stakeholder Response: ARPO50
John Ball, economist at ARP050 and former head of the pensions analysis division at the Department for Work and Pensions (DWP), said: "ARP050 warmly welcomes the prime minister's announcement that he hopes to get all party agreement to a new pensions regime. After nearly two decades of cuts in the relative value of state pensions by both Tory and Labour governments a new beginning is essential. Following these years of cuts, cross party agreement on the way forward for state pensions is vital if we are to restore confidence which would encourage people to save in private pensions again.
"ARP050 have already proposed that day to day administration of pensions should be undertaken by an independent body acting within a framework drawn up by parliament. This is likely to be the only way to stop Treasury salami slicing the pension system whenever savings in public spending are needed.
"However, ARP050 does not welcome the decision to put off everything until after an election. Following the reports of Pickering, Sandler and Turner we are close to consensus that there is too much means tested benefit and not enough basic pension in the current system. There is no serious dissent from this view. The only debate is how quickly we can move to a fairer system. The sooner we start fixing the details the sooner faith in the system will be restored and the greater will be the investment in their own pensions future which people will make."
Stakeholder Response: Help the Aged
Mervyn Kohler, head of public affairs at Help the Aged, said: "The PM is at long last giving pensions the attention which should have been given years ago. Today's 2002/2003 benefit take-up figures from the DWP show the continuing inability of means-testing to get help to significant numbers of pensioners who deserve it, with up to £3 billion left unclaimed.
"There is an emerging consensus about the problems in our pension system, and one of those problems is the remorseless growth of means-testing. When it comes to solutions, it would obviously be desirable to achieve a political consensus, but it would be equally desirable to set up an independent commission to monitor and advise on pension policies, and take them out of the day to day short-termism of politics."
