UK pensions minister Stephen Timms has challenged the industry to come up with an alternative model to the National Pensions Saving Scheme outlined in in the report of the pensions Commission (see page 8).
Speaking at a conference in London, Timms urged all parties to “work out the details” and submit proposals by early February 2006.
Interested parties would be then be given the opportunity to present their models to the government at an event, which will form part of the national pensions debate.
“Success in pension reform requires government and industry to work in partnership with employers and employees. The voice of the industry has always been at the heart of our consultations on reform – and we need it to be at the heart of our response to Turner,” said Timms.
The Investment Management Association (IMA) says it has already made a submission to the Department for Work and Pensions in October, but that it would be updated in light of the Turner Report.
The Association of Britis Insurers said - given a level playing field - it could put together an industry-led model, which would do “a better job” than the model proposed by Lord Turner.
The DWP broadly welcomed the framework of the Pensions Commission’s proposals, stating they laid a “good basis for the debate to come”. However, Timms added that much of the framework’s detail was still a matter for discussion – personal accounts being one such area.
He reiterated that any kind of pensions reform would need to comply with government principles of fairness, affordability, simplicity and sustainability.
According to Timms, new models should strive to achieve a radical extension of pensions coverage and a radical reduction in cost, creating an opportunity for society as a whole to save affordably for pensions.
“If you can design a detailed, workable model that meets these criteria and can match the Turner version for a broadly comparable level of charging, then that will be very attractive to us in government.”
He continued: “The decision when we make it will be a pragmatic one. We are serious about building consensus, and we are in no doubt as to the potential attraction of an industry-led model.”

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