Home > News > 2008 > June 2008 > Lifeboats are of limited use if no one sets sail
Lifeboats are of limited use if no one sets sail
Financial Times 25 April 2008
From Mr Adrian Waddingham
Sir, Mike O'Brien, minister for pensions reform, emphasises the government's intention to ensure pension promises are kept (Letters, April 23). This is commendable but, by itself, is not enough.
It is ironic that recent legislation has given us such well-protected schemes, yet done nothing to ensure that there will be schemes in future to protect. His predecessors at the Department for Work and Pensions have "taxed" contracted-out schemes since April 2007 by setting the national insurance rebate below the amount deemed necessary by the Government Actuary to provide the equivalent benefits.
The pensions bill currently going through parliament does nothing to encourage workplace penion plans even though they are an excellent way to overcome savings apathy. The minister is not ready to take the current opportunity to remove the perverse ban on offering employees pensions unless those pensions carry guaranteed increases.
There are employers willing to offer benefits better than "money purchase", and for the sake of lower-paid employees in particular, government should be encouraging them. Lifeboats are of limited use if no one is setting sail.
Adrian Waddingham
Senior Partner
Barnett Waddingham LLP
London EC2V 6BW