Press Release
ABI OPEN LETTER TO PAUL MYNERS: KEY PERSONAL ACCOUNTS ISSUES MUST BE ADDRESSED
Maggie Craig, the ABI’s Director of Life and Savings, has sent an open letter to Paul Myners, Chair of the Personal Accounts Delivery Authority.
The letter, published in the September 2007 issue of Pensions Age magazine, sets out the ABI’s key concerns on Personal Accounts and urges Mr Myners to address them as soon as possible in order to make a success of the new national pension system.
The text of the letter is reproduced below:
Dear Paul
Congratulations on your appointment to lead the Personal Accounts Delivery Authority.
I’m sure you’ll enjoy the great challenges it will present.
There are also great opportunities to get Britain’s pension system right.
The ABI has several key concerns which we believe you need to address as soon as possible, in order to ensure that the new system of pension saving achieves its full potential.
For a start, the public need to be very clear what Personal Accounts are all about. The Government says that Personal Accounts will ‘complement rather than compete’ with existing provision.
It would really help to hear how you see this working in practice. A clear understanding of how the new pensions environment will work is crucial to public confidence in the whole system.
Next, there is still much to be done to ensure that existing good quality pension provision is not undermined by Personal Accounts.
If this happened there would be real harm done to employees already in good employer-sponsored arrangements. In particular, there is the thorny problem of how automatic enrolment can be applied to Group Personal and Group Stakeholder Pensions. We are already engaged with the DWP to find potential solutions. I hope you will also work to support GPPs.
Finally, everyone must be clear that Personal Accounts will pay for themselves.
This is important for taxpayers, Personal Accounts customers and those with existing private pensions. To avoid unfair competition and a distorted market, there should be no State subsidy to pay for any setup or running costs of Personal Accounts.
Yours sincerely
Maggie Craig
Director of Life and Savings
Association of British Insurers
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