A report saw a large number of employers fuming at the last year’s Pensions Act, claiming that the Act would only lessen pension provision levels in offices besides increasing ‘regulatory interference’.
As many as two-thirds of employers believed that the new act would unnecessarily amplify expenses as well as boost bureaucracy, according to the Association of Consulting Actuaries (ACA). In addition, the report cautioned that the Act could even ‘compel’ companies to donate to a pension, and if this happened, a reduction in taxes would become a must for counterbalancing of costs.
While the government asserted that the Pensions Act would increase people’s confidence in pensions with ministers believing that the act would ease regulations and reduce scheme-running costs, employers thought just the opposite. The study observed 80% companies thinking that the legislation would raise operational costs and ‘red tapism’ in pension schemes, hence trimming down company pension provisions.
Adrian Waddingham, the chairman of ACA commented, “Increasingly, we are worried that the delayed Scheme Funding regulations may place further harsh funding pressures on employers, thereby speeding up scheme closures. The thinking behind tough new regulations may be well-meaning, but this short-term approach can only damage ongoing pension provision and undermine employers' desire to offer good schemes.”
The ACA added that instead of compelling employers to add something to pensions, it would be a better idea to have a higher state pension.
Posted
on : Thu, 06 Oct 2005 20:25 GMT | Pensions News
By : Mark Richardson
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