Member Article

Providing Pension Provisions

It seems as if you can’t pick up a paper, switch on TV or listen to the radio with out being bombarded by the statement “pension reform”. The pension world seems to be going though a process of major re adjustment. The state pension, public sector and private sector are all being subjected to “reform”.

So why all the changes and why Now?

In short mortality rates show that as a population we can expect to live longer sothere will be more pensioners in the future and those pensioners will be around for longer. This will put a massive strain on pension’s weather State, Public or Private sector. Although the reforms seem as if all happening now the policy behind them have been on the drafting table for some time, as an example the pension acts of 2007 and 2008 bringing changes to State provision and possibly the most radical reform in the private sector “Auto Enrolment” which starts to be rolled out in October this year.

For many years the presence of the state pension and pension credits has acted as a safety net for many, but as the pension minister Steve Webb reportedly remains fully committed to a new fair and sustainable model of a flat-rate state pension at £140 a week the emphasis is shifting away from state funded retirement and to work place funded provision.

Whether you are an employee or an employer you are going to have a responsibility in the future to provide pension provision and take responsibility for retirement planning for yourself or your work force. Despite governments best efforts to simplify pensions and the legislation connected to them they still remain a complex subject and with new compliance issues in relation to employer duties as part of auto enrolment coming to all firms over the next five years the need for professional advice and forward planning is very important.

Reform is necessary to bring pension provision in the UK and across all sectors into the twenty first century; the changes are going to be uncomfortable for many but required if the future retirement needs of a new demographic are to be met.

This was posted in Bdaily's Members' News section by Nigel Orrick .