UK Government must act to save occupational pension schemes
The Government needs to act to save occupational pension schemes from long-term decline warns ACCA (the Association of Chartered Certified Accountants) today in a letter to the Rt. Hon. John Hutton MP, Secretary of State for Work and Pensions.
The letter from Allen Blewitt, ACCA's Chief Executive, is a timely reminder in the lead up to National Pensions Day on 18 March, that the Government must address the problems facing occupational pension schemes in its response to the report of the Turner Commission.
The letter says that while Lord Turner's report - "A New Pension Settlement for the 21st Century" - focussed heavily on the hard choices to be made for state provision in the coming years, it offered few words of encouragement for occupational schemes and for the employers which pay for them. As a result, ACCA says employers are feeling isolated and tangible support from Government is needed to counter this.
Allen Blewitt said:
"After the succession of blows with which the sector has had to cope in recent years, I believe that the Government’s promised White Paper on post-Tuner pensions reform offers the chance to affirm meaningful and tangible support for the role of occupational schemes."
Over the last few years, employers have had to cope with a series of issues which have collectively contributed to the high levels of deficits - resulting in companies re-appraising their commitment to running pension schemes for their staff.
But the letter goes on to say that the causes of these deficit problems - low interest rates, poor stock market returns, abolition of tax relief on dividends - have often been beyond the powers of employers and trustees to control.
Allen Blewitt added:
"The occupational sector still has a vital role to play in the future pensions environment of the UK and that it is appropriate for the Government to take practical steps to sustain it. I believe that such steps would be welcomed by business and would provide much-needed re-invigoration of the entire sector in the interests of all concerned."
For further information, please contact:
John Davies, Head of Business Law
020 7059 5972
Helen Thompson, ACCA Press Office
020 7059 5759 / 07725 498654