UK – With the period of consultation of the UK government’s proposals for pension reform ending today, IPE looks at the suggestions and comments put forward from industry participants since the publication of the Green Paper in December.

Mercer Human Resource Consulting expressed its views: “The government has fudged two of the fundamental issues that led to the review – the nature of employers’ commitment to occupational schemes, and the need for incentives to help them carry the costs and risks of this commitment,” said Tim Keogh, European partner at Mercer. Mercer suggests that employers provide a minimum level of secure benefits, with additional benefits dependent on the affordability of the employers.

The National Association of Pension Funds has warned that the proposals “would do nothing to boost public confidence in pensions by simplifying the complex state pension system. Nor would they offer incentives to save, either to pension scheme members or employers who provide them.” The NAPF concluded that, with growing numbers of employers closing their final salary pension schemes to new members, the proposals will not reverse this trend, and are unlikely even to halt it.

The Chartered Institute of Personnel and Development has said that it is concerned with the lack of encouragement and incentive for employers to stick with their existing scheme or pay into a new one. CIPD adviser, Charles Cotton says: “The green paper does not recognise the extreme financial pressures that many employers are currently facing. Organisations cannot be expected to support open-ended obligations that are influenced by factors outside their control.” The institute is urging employers to take a more flexible and creative approach to overall reward – such as help with cost of childcare, health care cover.

Jardine Lloyd Thompson, the largest UK and European-based risk and employee benefits business says the paper’s proposals are not radical enough, and that the system needs to be simplified further. JLT is also disappointed that no additional tax incentives have been proposed in the Inland Revenue’s paper to encourage those on low to moderate incomes to save for retirement.

Commenting on the Green Paper, Invesco has proposed that the distinctions between pensions and savings should be removed and saving for all occasions promoted.

The Trades Union Congress is pressing for further action in three main areas. It wants: more protection for scheme members when schemes are wound up, long term pensions security for all through a new compulsion on employers to contribute to employee pensions; and linking the state retirement pension to wages to guarantee it can continue as a foundation on which everyone can build additional pension; and a new occupational pensions regime that ensures schemes can meet their obligations through solvency insurance and a new Pension Protection Fund.

Such suggestions by the TUC have come under fire from the Confederation of British Industry, which says that contribution compulsion will make firms more reluctant to employ people and threaten the viability of some smaller companies.

The Association of British Insurers has called for the Government to establish a clear direction for pension policy by setting explicit targets against which success can be measured. “The Government needs to set clear and demanding targets, both for reforming the state pension and for increasing voluntary saving, and progress must measured regularly against them,” says Mary Francis ABI’s director general.

A spokeswoman at the Department of Work and Pensions said that now the consultation period is over, the proposals and ideas would be discussed and investigated further. No time frame is given for when the final reform decisions will be made, but the NAPF is urging for swift action.

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