In the wake of Lord Turner's pensions report ePolitix.com spoke to key parliamentarians and stakeholders to get their response.
Select Committee Response: Jenny Willott MP
Lib Dem MP Jenny Willott, a member of the work and pensions select committee, said the report showed that the pensions system "must change".
"Without a major change in the pensions system, we face a pensions meltdown," she warned.
"The government is sleepwalking towards a pensions precipice, relying on means testing.
"The Turner report is an alarm call. If the government doesn't wake up and smell the coffee, pensioners throughout Wales and the UK will suffer."
She added that the Lib Dems agreed with the "general direction" of the Turner report.
"The system needs a radical overhaul to be far simpler and sustainable in the long-term," said Willott.
"In particular, we thank the commission for exposing the huge problems with Gordon Brown's means-testing and his commitment to freezing spending on pensions."
Select Committee Response: Gregory Mulholland MP
Gregory Mulholland, also a Lib Dem member of the select committee, said the proposals were broadly "sensible affordable and pointing in the right direction".
"I think it is vitally important that we have a sensible debate about how we deal with the pensions crisis, which I think everyone agrees we have in this country," he told ePolitix.com.
"The big concern I think from people on the select committee is, however, that that debate maybe stifled.
"It is very important that, despite some of the utterances that we've had from the chancellor, we are all allowed to look at these proposals, that we are allowed to try and build a consensus on how to take this forward and to some extent this is not a party political issue but something that is vitally important the future economy of the country and the welfare of our older citizens.
"I think there are fundamental principles here and I haven't spoken to anyone inside or outside parliament that thinks that the deal that our older citizens get from this country is a remotely acceptable one.
"Whatever the commission may say about the success or not of the pension credit system, there is an overwhelming feeling that I detect that means testing is neither the way to treat people at the end of their lives or the way to encourage people to save their own money for retirement.
"Its not a question of scoring party political points, it's a questions of saying the current state pension is inadequate, means testing is insulting.
"We need to rectify that and at the same time encourage people to save privately. The state must ensure no one lives with the indignity of poverty."
Select Committee Response: Harry Cohen MP
Labour MP Harry Cohen said he "didn't enter politics to raise the retirement age and worsen pension conditions for working people".
He cautioned that many working class people work long hours in difficult, intense jobs and get burnt out.
They often die at a younger age too and it is not right for them to be cheated of their pension at a reasonable age, said Cohen.
Parliamentary Response: Frank Field MP, chairman of the Pensions Reform Group
Labour MP Frank Field said the report was a "powerful broadside against the government's strategy of forcing an ever growing proportion of pensioners onto means-tested help".
"The battleground will centre around the Pension Commission's idea of increasing the retirement age and increasing taxes to pay for a new pension and the Pension Reform Group's proposals of merging the current pay-as-you-go state pension with a new funded scheme controlled by the contributors," he said.
"The Pensions Reform Group's scheme is much more generous to lower income groups and allows all groups to plan safely for additional pensions above a universal adequate minimum."
Parliamentary Response: Baroness Greengross, Vice Chair of the ageing and older people group
Baroness Greengross, vice-chairman of the ageing and older people group, said: "I welcome the long-term focus of this report.
"I think the balance is right overall, but the real urgency for government is to achieve a workable consensus to take us through the next 20 to 30 years so that we can then plan for much more radical reform beyond that."
Parliamentary Response: Paul Burstow MP, Co Chair of the All Party Group on Ageing and Older People
Commenting on the Turner Commission report, Paul Burstow MP, said: "The Commission makes it clear that the present pension system is not fit for purpose. Too many people face a retirement dependent on means-testing to keep them above the poverty line.
"The report makes a powerful case for an end to mass means-testing and higher basic pension that lifts every pensioner out of poverty.
"Sustaining a new pensions settlement will mean changing the state pension age and Turner makes a good case for moving to 68 by 2050.
"This report provides a basis for reaching a workable consensus around which pension reform can proceed."
Stakeholder Response: Age Concern
Gordon Lishman, director general of Age Concern England, said: "This is a defining moment for the government.
"It is a time for bold leadership and not more hand-wringing. Millions of ordinary working people and their families will be poorer in retirement unless the government acts quickly and decisively.
"The Pensions Commission has provided us with a once-in-a-generation opportunity to reform our pension system for today's and tomorrow's needs and has highlighted the difficult decisions we face as a society.
"In particular, people on modest and average incomes need help to build an adequate retirement income, and women need a system fit for the 21st century and not the world of the 1940s.
"We support Turner’s emphasis on having a more generous state pension system and the recognition about the need to improve the situation for women, carers and lower income groups.
"Age Concern believes that Turner is right to say the solution to the pensions crisis must be a combination of more tax, longer working lives, and higher private savings.
"But to win public support for reform, people will need to see a clear connection between what they pay in and what they get back in retirement. And reforms must be fair to different generations, and people with different life and work experiences.
"The government's pensions policy stalled for three years after the publication of its green paper on pensions.
"The Turner report has re-ignited the debate and passed the baton back to the government. A clear timetable for action is now needed to protect future generations while continuing to tackle poverty among today’s pensioners."
Stakeholder Response: Help the Aged
Mervyn Kohler, head of public affairs at Help the Aged, said: "This is a powerful report which takes no prisoners in describing the hapless state of the UK pension system.
"Prescribing remedies was never going to be uncontroversial or painless, so the Pensions Commission deserves congratulation for biting the bullet and establishing a reform agenda which politicians, pensions professionals and the public must now take seriously.
"Kicking this landmark report into the long grass of political sniping would be a failure of epic proportions.
"Help the Aged's own research carried out by MORI has shown the gulf which the government must now bridge following this report. Almost two thirds of working adults think pensioner poverty has got worse in the last ten years while one in five of the respondents to our survey said they intended to rely on the basic state pension.
"Now is not the time for ministers to merely trumpet their successes when so much remains to be done. The Pensions Commission has made proposals to improve the state pension which are welcome but urgent if we are to address the poverty in the present generation of our older population.
"What's most remarkable about the report is the growing consensus around the need for a decent state pension linked to earnings, and the inadequacy of a means-tested alternative as a sustainable, long-term approach.
"Informed by the commission's report, it is now time to set aside other divisive arguments and embrace the need to compromise for the good of pensioners who are struggling in poverty today and those who look with trepidation to retirement tomorrow."
Stakeholder Response: Association of British Insurers
Stephen Haddrill, director general of the ABI, said: "The Pensions Commission’s report must be a springboard for closing the savings gap, and not an excuse for further delay.
"The ABI supports automatic enrolment into pension schemes, with a matching employer contribution where the employee does not opt out.
"But we don’t need to create a new, expensive and risky state quango; we should use the expertise and infrastructure of our existing private sector to put this vision into effect. Doing so will give Britain a head start.
"Adair Turner questions whether the private sector can do this at an acceptable cost. Provided that we are asked to deliver the same service under similar conditions, we believe that we can. As Lord Turner notes, we are already doing so for larger company schemes.
"Working with businesses to make sure that their contribution is affordable, we can increase overall levels of saving and achieve better pensions in retirement. Our industry can play a key role in achieving the goal that everyone wants, and offer better choice for the customer.
"It is clear that Britain faces a pensions gap and that urgent reform of the state system and private saving is needed. People need to save more for their retirement, and they need help and encouragement to do so.
"The ABI will make a constructive contribution to the government's decision-making. The Turner report is complex and requires extensive debate of the options. We need the government now to act in a way that builds a wide consensus on improving savings levels in Britain."
Stakeholder Response: Which?
Mick McAteer, principal policy adviser at Which?, said: "We have been advocating a National Pension Scheme for some time and it is really encouraging to see that today’s recommendations mirror our proposals so closely.
"The National Pension Scheme is the lifeline that could save pension provision in the UK from drowning. We need to make sure that the political in-fighting over state pension provision does not divert focus from the real opportunity it presents us with - for all our sakes.
"The scheme is a real breakthrough because it will keep the cost of accessing a pension low, giving people the confidence to provide for the future, whilst at the same time providing the economies of scale which keep the industry happy.
"The public need to know, however, that the government are serious about helping them provide for their retirement. There has been so much rhetoric about pensions that work should start right away on the crucial job of communicating what this development means for the public."
Stakeholder Response: Nationwide
Nationwide executive director Stuart Bernau said: "The Pensions Commission should act as a non-partisan body to oversee the publication of reliable data on pension provision, make recommendations to the government on future policy, and provide an annual review of the state of UK pensions.
"Nationwide believes that a permanent commission, comprising independent experts with the appropriate expertise and experience, should act as the nation's pensions trustees.
"The Bank of England's monetary policy committee provides a model for an independent committee successfully taking key economic decisions out of the political arena and this should be replicated for pensions.
"In addition, on Monday, chancellor Gordon Brown announced that the Office for National Statistics will be made independent of government. The move was intended to restore confidence in official statistics and persuade voters that public services are improving.
"Given the apparent lack of public confidence in pensions, the case for an independent, non-partisan body to advise on pensions is strong.
"Our recent research shows that when faced with decisions about their pension, the majority of people say that they would rather save more now (but have less to spend) than work to an older age: 52 per cent would save more but have less to spend now; 30 per cent would work to older retirement age; 18 per cent don't know.
"If the UK pension system was simplified, a large majority of people say that they would save more: 70 per cent would save more; 20 per cent would not save more; 10 per cent don't know."
Stakeholder Response: Equal Opportunities Commission
EOC chairman Jenny Watson said: "The EOC congratulates the Pensions Commission for putting the scandal of women's pensions at the heart of its recommendations.
"We support the report’s recognition that radical reform is needed across the whole pensions system. If we are to save more and work longer, the least we should expect in return is a decent income in retirement, which is sadly not the case for millions of today's female pensioners.
"It’s now time for the government to act: if we get it right for women we get it right for everyone.
"Pension reform must start with the state. A universal basic state pension, linked to earnings, is vital to guarantee everyone a basic income in retirement.
"Employers and individuals have a responsibility to contribute toward a second pension too but crucially, the government must recognise the contribution parents and carers make outside the workforce.
"State financial support towards pension contributions for parents, carers and low earners is necessary if their savings are to be meaningful.
"It is pointless to raise the state pension age if this is not combined with greater flexibility in employment. EOC research has found a 'missing million' of older workers who want to return to work.
"Wider availability of flexible working options - currently enjoyed by less than one in six older men and one in four older women - is a vital part of the solution.
"Auto-enrolment in a National Pensions Saving Scheme should ensure that all employees have the opportunity to save, with support from their employer, and could offer the kind of flexibility that women need to cope with their staggered working lives."
Stakeholder Response: FSB
Wilfred Mitchell, FSB policy chairman, said: "The proposed three percent compulsory employer contributions will be a tax too far for small businesses.
"The bottom line is that most small employers simply cannot afford it and would be forced to make damaging cuts in other areas.
"The FSB recognises the need to tackle the pension’s crisis and we welcome the current debate. But shackling small firms, the drivers of economic growth, with extra expense is not the answer.
"It is also disappointing to note that there has been very little debate about the self-employed.
"Furthermore, at a time when we are all being asked to make sacrifices, it was wholly wrong of the government to afford preferential treatment on the retirement age to the public sector."
Stakeholder Response: Investment Management Association
Richard Saunders, chief executive of the Investment Management Association, said: "IMA welcomes the publication of the Pension Commission’s report.
"There has been much discussion about the way forward for pensions and this sets out a real foundation for future action.
"The National Pension Savings Scheme is a potentially powerful and exciting idea and work is now needed on the detail.
"If introduced properly the scheme could bring about a real increase in the levels of saving, reaching those who currently do not save for their retirement.
"It will be important to ensure that the scheme does not have an adverse impact on the existing savings market.
"Getting the balance right will be a complex task. It is also crucial that the system does not fall into the trap of complexity with too many administrative options.
"Otherwise the Commission’s aspirations about keeping costs down will not be met. Careful scheme design will be critical. The key message is keep it simple.
"The investment management industry has a lot to offer here, and we stand ready to work with the government in developing and implementing these ideas."
Stakeholder Response: Council of Mortgage Lenders
Laurence Baxter, CML senior policy adviser, said: "The Turner report glosses over the role of housing equity in funding retirement income.
"This is a wasted opportunity, as there is a great deal that could be done to ensure that equity release becomes a more mainstream part of the retirement income mix.
"With a current market size of only £4.6bn, but unmortgaged equity of £1.15 trillion, the potential for equity release in retirement income is huge but untapped."
Stakeholder Response: Institute of Directors
Miles Templeman, director general of the IoD, said: "The second report is the most comprehensive analysis of the UK pension system ever undertaken.
"But we do not want the government to accept its recommendations on employer compulsion.
"The burden of pensions on employers is already high enough."
Stakeholder Response: GMB
Paul Kenny, GMB acting general secretary, said: "With average life expectancy for men in Glasgow of 69.3 years and for men in Kensington and Chelsea of 80.8 years, a uniform, compulsory retirement age of 67 is simply not acceptable.
"There is no way that GMB will go along with raising the state retirement age to 67. GMB will actively campaign against this proposal."
Stakeholder Response: Association of Consulting Actuaries
ACA chairman Adrian Waddingham said: "The ACA has long supported a higher basic state pension, consolidated with second state pension over a period of years, indexed to reflect earnings growth. Implicit in this reform is a reduction in means-testing.
"We share Turner's objectives, but are a bit disappointed that the commission's proposals look complex. We are not sure the public will be clear what state pension they are building their private pension on top of. Without clarity, new saving commitments might be difficult to encourage."
"We agree with moves towards a higher basic state pension financed by a state pension age gradually rising as longevity improves. But having split pension ages - one for the basic state pension and another for second state pension - is too complicated."
"At present, millions of employees benefit from employer contributions ranging from six per cent to above 15 per cent of earnings. Will these generous contributions persist into the future?
"Faced with running a company scheme alongside a National Pension Savings Scheme arrangement, how many employers will feel it's logical to close the current higher cost company scheme on financial and administrative grounds? This would be a disturbing out-turn."
"We also agree that pensions are too important to be left to politicians: there should be a permanent independent pensions commission."
Stakeholder Response: Chartered Institute of Personnel and Development
Duncan Brown, assistant director general of the Chartered Institute of Personnel and Development, said: "Raising the state pension age may well increase the notional supply of older workers, but it won’t necessarily increase the actual supply of them, or demand for them.
"One quarter of men and one third of women aged between 50 and the current state pension age are already not in the labour market. These people illustrate the real pensions and retirement challenge.
"If we want people to work longer, then we are going to have to find ways of ensuring that employment is attractive to older workers, and that they have the skills to make a contribution to the workforce.
"Too many employers are lazy in their attitudes to older workers, happy to place them in the ‘out tray’ for years before they actually retire.
"This plays a part in declining job satisfaction amongst older workers. Keeping people working longer is one thing, but keeping them working productively and making full use of their skills and experience is a greater management challenge.
"The chances of an increase in the state pension age achieving the desired objectives and boosting UK productivity rest on the willingness and ability of employers to adapt their employment practices to engage older workers more fully, to motivate them, and to reduce their desire to retire early.
"If the government were to abolish the mandatory retirement age altogether, as Lord Turner recommends, they would remove the 'ejector seat' option from employers and encourage a more careful focus on effective management."
Stakeholder Response: Amicus
Amicus general secretary Derek Simpson said: "We are pleased that Lord Turner has concluded that compulsion is the only way to tackle the pensions crisis but disappointed that he is recommending individuals and companies should have the opportunity to opt out. Opts out will hurt those most in need.
"Our union will also oppose any plans to raise the statutory retirement age which will see many of the poorest people die before receiving the pensions they work their whole lives for.
"All of us saving more is the solution to the pensions crisis. Amicus wants to see the burden of this solution shared fairly between employee and employers."
Stakeholder Response: Carers UK
Imelda Redmond, Carers UK chief executive, said: "Carers UK welcomes the Turner report's recognition that the pension system needs to be more flexible if it is to deliver for people with caring responsibilities and interrupted working lives.
"Turner suggests improvements to the second state pension, with greater flexibility and contributions for carers.
"Government must go further to stop the injustice of poverty in retirement for carers, who contribute a staggering £57bn to the economy of the UK by the care they provide.
"Any future pension reform must recognise that it is not enough to ask carers to save for retirement. 80 per cent of carers are of working age.
"One in five carers of working age has given up work to care Health inequalities for carers are well documented, with carers providing long hours of care being twice as likely to be permanently sick or disabled.
"The government must take on the challenge of ensuring that those of us who contribute to society by caring are not discriminated against in retirement."
Stakeholder Response: ACCA
John Davies, head of business law at ACCA, said: "This is a commonsense report which makes credible recommendations to tackle the pensions time bomb in the UK.
"Any attempt to remove the high degree of uncertainty affecting pensions provision in the UK – both in the private and the public sector – can only be applauded."
"But ACCA would like to see the government, in its response to Turner, adopt a range of positive measures to incentivise the establishment and operation of good quality occupational schemes.
"We look forward to the publication of the government's white paper, announced by John Hutton in the Commons today, in the Spring 2006."
Stakeholder Response: ICAEW
Chief executive Eric Anstee said: "The principles that we believe are essential to rebuilding trust and confidence in the pensions system are simplicity, certainty and stability.
"Members of the ICAEW play an important role in pensions – for example, many are trustees of pension funds, others are finance directors responsible for pension scheme strategy; and are key players in helping to identify, measure and resolve large pension fund deficits.
"We have a responsibility to ensure that future generations aren’t faced with the same pension challenges and uncertainty that today’s Pensions Commission report has outlined."
"Over recent years, individuals have been subjected to a barrage of complicated and often conflicting information about the future of their pensions which has left them confused and uncertain about the state of their retirement provision or indeed what steps they should be taking.
"Individuals can only make informed choices about how they provide for their retirement if the pensions system introduced following the national debate is simple, certain and long term.
"All of us - government, pensions providers and employers - need to participate in an open and frank discussion without prejudging the outcome.
"We need to work together to bring greater certainty to pension provision over the long term and rebuild trust in the system as a whole.
"As our contribution, we will carry out this research and convene this roundtable to allow our members to have their say in this critical national debate."
