Who’d Have Thought It…?
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It does seem, however, that the pace of change is escalating. Frankly this is no surprise either, given the current economic circumstances, the open ended cost and volatility of running such schemes, and the legislative complexity of complying with the over burdensome regulatory regime.
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And that’s before factoring in the increasing longevity of members – in other words, we’re all living too long for the actuaries to keep up – and the reforms to be introduced in 2012. I say this with some caution since it is just remotely possible that NEST will be spiked as many of us in the pension industry hope…at least in its current form.
But the one area the report flags up which should be of concern is the fact that employees are simply not saving enough for retirement. 60 percent of people won’t be able to retire at all due to lack of savings. Yet the previous government (and this one too if they don’t do something about it) thought that an 8 percent contribution into a monolithic money purchase scheme would be sufficient.
Actually the figure that will be invested is a mere 5.7 percent after the set up levy and management charges are taken off. Here’s a bit of advice that didn’t take a lot of research – IT ISN’T ENOUGH!!
It is no wonder that employers are incentivising their employees to transfer out of the DB arrangement into something less costly. Someone needs to get a grip of the pension arena. Who will be brave enough to do it, I wonder?
Have your say at Jennie Kreser’s blog spot: http://www.pensionlawyerblog.com
To contact Jennie, mail jik@silvermansherliker.co.uk or call +44 (0)20 7749 2700.
Click here to hear Jennie Kreser being interviewed on BBC Surrey and Sussex. |
