29 May 2009
At a Money Marketing summit in Monte Carlo shadow pensions
minister Nigel Waterson told attendees that the Tories will do as
much as possible to help employers keep DB schemes open.
He said: "DB is still the best hope of providing a comfortable
retirement. There are a minimum of employers who, possibly for
paternalistic reasons, will always want to offer DB. I think they
should be encouraged.
"That means greater flexibility, conditional indexation,
statutory override, deregulation and the like. In short, anything
that will make it more attractive for employers to stay in the DB
business. Otherwise, the risk of levelling down is a very real
one."
Mr Waterson also raised the issue of forced annuitisation which
leads to savers having a lack of full control over their money. He
stated that as long as schemes provided a minimum level of income
to avoid a reliance on state benefits, there should be no
compulsory annuitisation.
"The Government has a blind spot on the issue. They do not like
the idea of people having flexibility over how they dispose of
their pension pots. Ministers got into such a mess over
alternatively secured pensions that they do not want to revisit
this issue at all. Well, if we get the chance, we will," said
Waterson.
Hargreaves Lansdown's Tom McPhail said: "I am comfortable with
the idea, as long as a minimum level of income is secured. It might
be an idea to cap the level of withdrawals and I also think that
any sur- plus should be allowed to pass on to beneficiaries,
subject to inheritance tax."
Last month David Cameron and senior Conservatives signed an
early day motion to revoke a raft of pensions regulations that were
due to come into force the same week.
The regulations allow trustees to override the rules of their
schemes to reduce the link between deferred and pensioner benefits
and inflation with the agreement of their sponsor.
The move will delay the introduction of the Occupational
Personal and Stakeholder Pension (Miscellaneous Amendment)
Regulations 2009.
The government estimated that the changes could save DB schemes
as much as £400m per annum.
Shadow pensions minister Nigel Waterson said: "These are complex
regulations which deserve a proper debate instead of being rubber
stamped.
"We also have concerns regarding statutory override. As the
instrument is currently drafted, pension schemes would only be able
to amend their rules by trustee resolution and not by employer
initiative."
