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September 30, 2006
Actuaries criticise NPSS
In its response to the Government’s White Paper, the Association of Consulting Actuaries said it was supportive of proposals designed to expand pension provision to a wider number of people.
But it added that this should only be done if it did not undermine good existing pension provision.
According to the body, the Government’s plans will still result in too many pensioners remaining on means-tested benefits in 2050.
As a result, the association warns that there are “real dangers” of mis-selling the proposed new personal accounts, particularly to low earners.
It adds that there could also be high levels of opt-outs, making the system less cost efficient.
It its response to the government’s White Paper, Standard Life raised similar concerns over the appropriateness of the NPSS for lower income employees.
It stated: “Very few people earning less than UK median full-time earnings (£25,000) and over 40 years of age in 2012 will benefit from having a personal account.
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Posted by Tom Troceen