Warm welcome for pension plan

Commenting on íPersonal Accounts: a new way to saveí - the Pensions White Paper published today, TUC General Secretary Brendan Barber said:

Todayís proposals are to be warmly welcomed. They are another important building block in a new pensions settlement. Compulsory employer contributions are a major gain for people at work.

In particular, we welcome the Governmentís rejection of employer lobbying for a waiting period before employees can join or rejoin the scheme in each new job. The Government is also right to hold fast to a default low-cost scheme and reject the pensions industryís campaign to introduce a íbattle of the brandsí that could only confuse savers and raise costs.

The success of the new pensions settlement will of course also depend on the Government pressing ahead with its plans to index link the state retirement pension to earnings and to reduce means testing, and the introduction of clear generic advice. And while it is right to examine the position of the low paid, critics of the new scheme fail to see that most employees would rather build up their own pension pot, rather than rely on the future vagaries of state pension benefits. Personal Accounts also ensure that all employers play their part in pension provision.

There are still some important details to be determined. The TUC will press for a strong member voice at every level - including the delivery authority - of the new system.

Our one disappointment is that the administration of the new scheme will take place in the private sector, even though the public sector already has experts collecting contributions from employees and employers in the shape of Her Majestyís Revenue and Customs.