Malcolm McLean, Barnett Waddingham, comments on OECD report
Commenting on a report published today by the Organisation for Economic Cooperation and Development (OECD), Malcolm McLean, consultant at Barnett Waddingham, said:
“The OECD Report makes for interesting reading. It confirms amongst other things the need for a strong political commitment to supporting pension provision going forward and expresses a concern that because of the financial crisis some countries have been “dithering” and that by adopting a short term response to the crisis they are putting at risk long term sustainability and the long term strength of private pensions.
“I think we must all hope that our Government holds its nerve and doesn’t “dither” in the face of those strident voices that want to further defer or even cancel the programme of auto-enrolment of eligible workers into a workplace pension arrangement due to begin in October.
“Whilst it might be going too far to accuse them directly of “dithering” they have extended the programme to push back the take-on of employees in the smaller businesses to a point after the next general election in 2015 and created a doubt in the minds of some as to their commitment to seeing through this important stage of the operation.
“We should also all note the OECD’s assertion that the starting point for a successful defined contribution plan is a sufficiently high contribution rate, something the prescribed 8% minimum contribution in auto-enrolment is unlikely to achieve in most cases.”
For more information please contact Malcolm McLean or Steph Gold