ePolitix.com Stakeholders comment on the government's plans to reform the pensions system.

Party response: Liberal Democrats

Liberal Democrat work and pensions spokesperson Danny Alexander MP said: "The Government has a great deal of work to do to maintain the pensions consensus.

"The personal accounts scheme does offer real benefits, but is undermined by Gordon Brown’s mass means-tested state pension, which will remove the gains from saving for many.
 
"People with very low incomes, broken work records, or massive credit card debts need to be able to get independent advice about whether saving is worthwhile.

"If these problems are not addressed, a good idea will be seriously undermined."

Stakeholder response: Help the Aged

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Paul Cann, director of policy at Help the Aged, said: "Today's announcement in the House of Commons will bring about a host of small but significant changes to the state pension system. 

"Help the Aged is particularly pleased that the government is taking real steps forward to pay benefits to older people more automatically.

"Someone who claims pension credit over the phone will in future get council tax benefit and housing benefit as a matter of course, without the need to fill in any forms at all. We hope this will represent the beginning of a process to really simplify the benefits maze for older people, but there is much more still to be done and government must rise to the challenge.

"However, the announcement to reduce backdating for pensioners from 12 months to three months will mean that some pensioners who have not yet claimed what they are entitled to will miss out. We strongly urge the government to make a concerted push on take-up before this new rule comes in, so that as many people as possible can get a full year's backdating. 

"In the broader context of the Pensions Bill, the consolidation of people's SERPs, state second pension and other earnings-related pensions into one amount is a very positive move. Too often people struggle to understand even the state pension system and this should help address that for those considering their future pension saving and whether to save into the new personal accounts system which the Bill will establish."

Stakeholder response: Age Concern

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Gordon Lishman, Age Concern's director general, said: "This is a positive package of reforms that should change the face of retirement saving and finally make pensions worthwhile for the majority.

"We strongly welcome the introduction of personal accounts and are very supportive of the plans for automatic enrolment. A well designed personal accounts scheme will give hundreds of thousands of people, including many women, access to a decent pension.

"Cross-party consensus on the Bill will be essential if we are to help tomorrow's pensioners avoid poverty by saving today. Further investment in good quality information and advice about pensions and savings will also be vital to help people make informed choices about saving for their retirement."

Stakeholder response: CIPD

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Charles Cotton, CIPD reward adviser, said: "For the proposals contained within the Pensions Bill to be successfully implemented, the government and the delivery authority must listen to HR professionals. The danger is that too much attention is given to the design and not enough to the implementation.

"Communicating pensions effectively to the workforce, and therefore engaging employees is crucial. 

"CIPD research shows that the more effort that is made when communicating with employees about pensions, the more they value them. HR professionals have the knowledge, experience and day-to-day contact with employees to make a success of these proposals. A failure to engage properly with employers will leave these proposals dead in the water."

Stakeholder Response: Investment Management Association (IMA)

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Richard Saunders, Chief Executive of the Investment Management Association said: "The Pensions Bill is a new and important milestone in helping people to save for retirement.  We will now examine the detail of the Bill and are committed to ensuring that the Bill delivers a framework that will give maximum simplicity to enable employers to deliver an efficient, low-cost, long-term savings vehicle."

Stakeholder Response: ACA

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Ian Farr, ACA Chairman, said: "We welcome the modest reforms in the Bill so far. But we remain worried about what is not there. We have highlighted to Government over the last 2 years how risk sharing schemes could re-build good workplace defined benefit pensions in the UK. We have spelt out the simple legislative changes necessary and these in no way amount to a ‘new layer’ of pension regulation, which nobody wants on top of the new personal accounts layer as well. We welcome further urgent discussions with Government and other stakeholders to make real progress in finalising a better overall reform package provided these measures make it into this year’s Bill.

"The deregulatory reform proposals in the present Bill simply aren’t extensive enough at present. We’ve said this before, and the recognition by the Government that further work is needed on the reforms is a glint of light. But those discussions with Government must make major advances on what is presently proposed, and we look forward to providing the additional information which Government says it needs in order to be convinced that conditional indexation should be introduced."

Stakeholder response: Association of British Insurers (ABI)

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Maggie Craig, the ABI’s Director of Life and Savings, said: "The ABI supports personal accounts, providing they add to saving rather than undermining existing pension provision.

"There remains a risk of damage to existing provision if employers with good workplace schemes are not exempted from needing to run personal accounts, and therefore choose to level down contributions. And if random additional contributions can be made to personal accounts from other savings, this potentially moves personal accounts away from the focus on their target market or low and moderate earners.

"On both points, the Bill promises regulation but does not yet make clear what the Government will do. The ABI believes it is vital that these matters are clarified."