04 August 2006
Banks, life assurers and fund managers are to be given leading
roles in setting up and eventually running the proposed low-cost
national pensions savings scheme, according to pensions minister
James Purnell.
In an interview with the Financial Times, Mr Purnell said top
executives from the financial services industry would be recruited
to a proposed "delivery authority". Its job will be to establish
the system of so-called personal accounts, into which up to 10m
employees will be automatically enrolled, with their employers
compelled to contribute.
In an attempt to dispel fears that personal accounts could lead
to the nationalisation of the savings industry, Mr Purnell said the
"vast majority of functions" in running the scheme, starting in
2012, would be carried out by the private sector, whichever scheme
model the Government decides on. Ministers have said the model
proposed by the Pensions Commission is the frontrunner because of
its projected low running costs, but the Government is still
examining alternatives.
Mr Purnell said whatever the model, there would have to be a
central organisation to oversee collection arrangements, set
service standards, deal with complaints and set contracts with
private sector operators for administration and fund management.
These tasks would be taken on, in the first instance, by a delivery
body run by industry experts as early as spring 2007.
