Commenting, David Yeandle, EEF Deputy Director of Employment Policy, said:
"This Bill is the final piece in the pensions reform jigsaw. Personal accounts will provide many people with the chance to save for their retirement for the first time but some outstanding issues still need to be resolved."
In particular, EEF supports auto-enrolment into personal accounts with a modest compulsory employer contribution. It will now be very important for personal accounts to be developed and implemented in a way that ensures they are simple for employers to administer and individuals to understand.
However, some detailed aspects of personal accounts still have to be addressed by government, particularly the need for smaller employers to be provided with some initial financial assistance when personal accounts are introduced in 2012.
Furthermore, the deregulation of private pensions is a key element of the government's pension reform programme for many manufacturers. By doing this the government is giving a welcome supportive message in the Pensions Bill to help employers who voluntarily provide occupational pension schemes for their employees by reducing costs. The proposed reduction in the annual cap on revaluing deferred pensions from 5% to 2.5% is an encouraging first step in helping employers to achieve this. However, to be really effective, it must be supported by the introduction of statutory override (1) to help employers introduce this change.
David Yeandle added:-
"Government must now build on its initial steps on the deregulation of private pensions to reinforce the positive message that the Bill is sending to those manufacturers who are struggling to retain their defined benefit occupational pension scheme."
ENDS