NAPF calls for fresh overhaul of pension laws

Christine Farnish, the recently appointed chief executive of the National Association of Pension Funds (NAPF), will today launch a major attack on Government pensions policy.

She will call on the Chancellor, Gordon Brown, to simplify pensions law, improve occupation schemes and sweep away rules preventing people from continuing to work for a company once they start drawing a pension from it.

She said: "It's ridiculous that someone can spend 40 years working for Sainsbury, start drawing a pension and then go to work for Tesco because they cannot work for Sainsbury any more. The current state system for pension provision is too complicated. It leads to confusion among consumers, puts people off saving, and loads significant administrative burdens not just on the state, but also on employers and private pension providers."

In its submission to the House of Commons Working Pensions Select Committee the NAPF says pension saving through the workplace has significant advantages: savers benefit from additional contributions from the employer; the employer handles the administration of the scheme; employees' contributions are deducted from payroll and are therefore relatively painless.

"We will therefore be looking at ways of removing the barriers which currently make it difficult for employers to offer worthwhile schemes," she said. "But employees whose company goes bust can lose out on part or all of their expected pension entitlement, so we will be looking at fair and reasonable consumer protection where an employer faces financial difficulties."

In July, when she was appointed, Ms Farnish said: "Whether people should be compelled to save for their pension is a big political issue, but the Government needs to address whether we are going far enough to give incentives or remove disincentives. I'm not going to retire at 60, or even 65: I want to go on doing something, and it's a big area that needs exploring. The demographics will drive it, because otherwise there simply won't be enough people to do all the things we want done in this country."