Actuaries say Act falls short

According to actuaries the Pensions Act 2004 has failed to properly address the problem of people retiring too soon, with too little. The Association of Consulting Actuaries’ (ACA) Pensions trends survey 2005 revealed 68% of members think the government is on the wrong path with its policy on promoting occupational pension schemes. Some 62% of employers claim the new Act will actually reduce occupational provision, and 82% predict increased costs.

Moves toward scheme simplification remain a priority, with 71% of ACA members supporting a change to allow employers to cut costs retrospectively. Such a move would avoid increased costs should the government lift the normal retirement age. Some 63% of respondents want lower-cost defined benefit schemes, with 73% viewing the shift away from DB as inevitable.

There is widespread belief that voluntary systems of pension saving will not work well without state pension reform, while some 89% support the consolidation of the basic state pension and the state second pension, S2P. Of those surveyed, 84% think current means-tested benefits act as a disincentive to save for retirement.