Establishing independent reviews to address complex and sensitive issues and cuts is a tactic that the new coalition government is already making extensive use of. Figures published by the new Office for Budget Responsibility, that forecast a doubling of the cost of public-sector pensions to £9 billion over the next five years, were therefore swiftly followed by the announcement of the establishment of an independent commission, led by John Hutton, to investigate and recommend on this issue.
But while private-sector employers undoubtedly usually pay less into their occupational schemes, with the average supposedly “gold-plated” public-sector pensioner receiving just under £5,000 pa, we might question whether we should be encouraging private-sector “levelling up” rather than major public-sector cutbacks. Private-sector employers will, though, all welcome the promised review and simplification of the rules and regulations governing occupational pensions in order to help reduce their own costs.
Liberal Democrat Steve Webb has made an impressive start as pensions minister. Along with the bringing forward of the dates at which we see increases in the state pension age from 2025, as proposed by the previous government (the subject of another independent review set up within the pensions and savings bill), he is also pursuing the earliest possible abolition of the default retirement age. However – you guessed it – another consultation will be taking place on that.
Institute for Fiscal Studies research fellow Paul Johnson is also leading a review of the establishment of the National Savings Employment Trust which is targeted at lower income workers with no private or occupational pensions savings, as well as the proposals for automatic employee enrolment in such schemes.
Improved retirement planning, performance management and flexible working for older workers should therefore be high on the agenda of employers in all sectors in the years ahead.
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But while private-sector employers undoubtedly usually pay less into their occupational schemes, with the average supposedly “gold-plated” public-sector pensioner receiving just under £5,000 pa, we might question whether we should be encouraging private-sector “levelling up” rather than major public-sector cutbacks. Private-sector employers will, though, all welcome the promised review and simplification of the rules and regulations governing occupational pensions in order to help reduce their own costs.
Liberal Democrat Steve Webb has made an impressive start as pensions minister. Along with the bringing forward of the dates at which we see increases in the state pension age from 2025, as proposed by the previous government (the subject of another independent review set up within the pensions and savings bill), he is also pursuing the earliest possible abolition of the default retirement age. However – you guessed it – another consultation will be taking place on that.
Institute for Fiscal Studies research fellow Paul Johnson is also leading a review of the establishment of the National Savings Employment Trust which is targeted at lower income workers with no private or occupational pensions savings, as well as the proposals for automatic employee enrolment in such schemes.
Improved retirement planning, performance management and flexible working for older workers should therefore be high on the agenda of employers in all sectors in the years ahead.