Pension call based on career earnings

Wed, 02 Jan 2008

According to the Association of Consulting Actuaries, the proposed governmental reforms to the pension system are not far-reaching enough, and employers need to offer pensions based on career earnings.

Concern exists amongst the ACA about the barring of pension holders from final-salary pension schemes . The ACA make it clear that although the government is trying to extend pension provision, it wishes greater action to encourage employers to offer better schemes.

The chairman of the ACA, Ian Farr, reportedly commented: "Most private-sector defined benefit schemes are closed to new entrants and there is mounting evidence of closures affecting existing members. All around we see evidence of employers looking for ways to cap their liabilities for the future, including 'selling off' their schemes to outside organisations."

The ACA reportedly advised the government to: "simply remove the ban on employers being able to offer 'middle way' conditionally indexed pension schemes - a type of system that prospers in the Netherlands, stabilising there the retirement incomes of millions of people."
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