Plan to force staff to join company pension schemes
All employees will be forced to join company pension schemes as a top-up to the state pension, if the Government adopts the findings of a major new review it has commissioned.
The report by pensions analyst Alan Pickering, to be delivered to Work and Pensions Secretary Andrew Smith within weeks, seeks to turn back the clock to the 1980s before the Tories scrapped safeguards and encouraged free-market competition.
It will be seen as the first step to a compulsory second pension as a top-up to the state pension. Mr Smith told a TUC pensions conference last week that compulsion would be used as a last resort, but did not rule it out. Such a proposal would cause outrage among employers who claim it would it would push up costs.
Ministers are growing alarmed at the numbers of companies seeking to cut costs by opting out of company pension schemes altogether, or reducing the benefits by ending costly final salary schemes.
They also fear that many young people are being turned off the idea of saving for their old age because of distrust in pension schemes, exacerbated by the fall in world stock markets.
The TUC has been campaigning vigorously for a compulsory company pension scheme to ensure workers are protected for their retirement. Mr Smith signalled last week he is ready to relax the tax regulations to allow the elderly to carry on working beyond their normal retirement age into their 70s or 80s if they choose to do so, although there are no plans to change the retirement age.
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