Funds set up their own pensions inquiry

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The Independent Online
AN INQUIRY into the long-term shape of pensions has been launched by the National Association of Pension Funds, after the Government rejected a request that an official committee should be set up to do the work.

Ron Amy, chairman of the NAPF, said the key concerns were that occupational pensions had only reached half the working population and the basic state pension was falling as a proportion of earnings - yet its cost would still double over the next 40 years.

A further vital issue was the low level of contributions going into many personal pensions, nearly two-thirds of which consist of rebates on Serps contributions and nothing more.

There are fears that the pensions produced will be too small, bringing a serious problem in the next century.

The 18-month inquiry, chaired by Sir John Anson, former second permanent secretary at the Treasury, will try to resolve these conflicting pressures in a way that could form the basis of a political consensus.

The inquiry was welcomed by Peter Lilley, Social Security Secretary, and by opposition spokesmen.

Mr Lilley said the work would be 'in the context of major changes in pension arrangements' which he would be proposing as a result of the Goode report on pension law, European law on pension equality and the Conservative manifesto commitment to age-related rebates for personal pensions.

Mr Amy said the inquiry was distinct from the Goode report, which looked at improving regulation in the wake of the Maxwell affair, because it addressed long-term problems of pension provision. 'This really is a big socio-economic issue for the UK,' he said.

Mr Amy added that the NAPF had deliberately distanced itself from the inquiry by not putting its own representatives on Sir John's team. The NAPF's role would be to give evidence.

Age Concern, which is represented on the inquiry team, launched its own report on the future of pensions. It urged adequate support for all elderly people so they could fully participate in their communities and have real choice on spending. It also said there should be equal access to pensions for men and women.

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