We now have the possibility of people drawing their pension
for longer than they have worked. He said for example,
"my mother had brought-up a family, had worked for
25 years and has now drawn her company pension for 31
years".
He went on to say that Actuaries know they have something
to account for. Why, otherwise, would they now be wishing
to limit their liability? Too many Actuaries were lazy
at setting adequate contribution rates for employers.
He now feels there is a need for smaller actuarial firms
who might provide a better more continuous service.
In respect of raising the pension age, Mr. Field said
it was important to remember that some people, because
of ill-health, cannot now continue working up to the present
State Retirement age. Any significant raising of the retirement
age for the State Pension will need to be accompanied
by the introduction of an effectively policed Disability
Benefit.
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"senior
people
are in different schemes to the main workforce"
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He
went on to say that the minimum income guarantee
and the pension credit make it absurd for half of
the population to save. We know that the Chancellor's
(Gordon Brown) schemes won't last and that people
are simply reacting rationally to these schemes
by not saving. But |
cannot be good for the longer-term. Furthermore he said
he is delighted, but not surprised, that the take up for
the Government's stakeholder pensions was so small because
if it was successful, the government would be charged
with the largest mis-selling scandal ever.
He continued to explain
that at the moment too many people push the line that
everything will be solved by simply giving advice. Advice
cannot make good the basic fault in the system that
we do not have an adequate first pension. The solution
was not simply to give more advice but to make good
this inadequacy. The Pension Reform Group has advocated
a major reform, which deals with this issue (www.universalprotectedpension.org)
using initially the rebate of national insurance contributions
that would aim to give everyone a pension above means
testing level, everything people save will be in addition
to this pension. This would then lead to savings taking
off because everyone will know what they will get and
that private provisions would not be set off against
the State pension, so there would be an incentive to
save.
We asked Mr. Field if the availability of tax breaks
for senior executives and directors under company pension
schemes should be linked to the take up of the scheme
by works and staff employees as this link is tried and
tested in the US and works well.
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"the
levy should
be on employees
rather than on
the firm itself"
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Mr.
Field said that because of the earnings cap, most
senior people are in different schemes to the main
workforce and this has undermined the natural defence
of the main scheme which is that the senior people
would lose out if the scheme is wound up. |
Mr. Field was fairly impressed with the
Pensions Bill. It follows his private pensions bill
that was blocked by the Government in 2002 and 2003.
He said the levy should be on employees rather than
on the firm itself. What will be the effect on companies
when the Government pronounces that they are a bad risk,
or that their scheme is at risk? No sensible Government
will want to get itself into making such judgements
and then publishing them.
On the subject of members
of pension schemes that are in deficit, although Gordon
Brown stated in the Budget he is to take unclaimed assets
for charities, Mr. Field was confident they could re-claim
this money for the 60,000 people that lost their pension
money when their company became insolvent. The cost
of this would be about £3bn, well within the unclaimed
assets at about £20bn.
Mr. Field would also
like a provision to prevent employers transferring their
pension liabilities into one subsidiary and then walking
away, without having to make good the deficit.
sharingPensions.com would like to thank
Mr. Field for sparing the time from his very busy schedule
for this interesting interview.
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