CBI pensions paper will contribute to debate, but does not provide all the answers

The CBIís contribution to the pensions debate is welcome, but leaves some questions unanswered, according to the Chartered Institute of Personnel and Development (CIPD).

Charles Cotton, Pensions adviser at the CIPD, calling for a wider debate to reach a workable consensus on the future of retirement, said:

In our response to the Governmentís 2002 green paper, we called on the government to review the existing scheme to provide a simple safety net and for a debate around the level at which the net should be pitched and how it should be funded. Todayís contribution to that debate from the CBI is welcome.

However, there are no quick fixes to the pensions conundrum. The CBIís own response appears to offer little to counter inevitable criticisms that their solution will lead to backwards steps in efforts to tackle pensioner poverty.

What is clear is that further work is needed from all interested parties to ensure that a workable consensus can be reached before the pensions issue really does become a crisis.

The CIPD has contributed to the debate by supporting the research of the Tomorrow Project in its publication Reshaping Retirement. This advocates a íflexible state pensioní that is:

*Paid to everyone, irrespective of contribution records, on a residency basis and at a flat rate.

*Set significantly above the pensioner poverty line.

*Indexed to earnings.

*Linked to other measures to ensure individuals have increased choice over when they start to receive their flexible pension.

*Flexible enough to ensure it can be received at a reduced rate 10 years before the state pension age, or an enhanced one for 10 years afterwards.

*Funded by a rise in the state pension age, probably to around 70.

*Phased in over a 10-year period, starting in 2030.