EEF, the manufacturers’ organisation has confirmed its support for Lord Turner’s proposals for reforming the UK’s pensions system re-iterated today, but expressed concern that the issue must not become a ‘political football’.
EEF believes that these proposals set out a constructive and realistic structure that will involve government, employers and employees taking responsibility for funding future pension provision.
It has also consistently argued that, whilst there may need to be some debate about detail, the most important issue is that government should now lead a rational debate to build a consensus on the way forward.
Commenting on today’s report, EEF Director General, Martin Temple, said:
“Lord Turner’s proposals set out a constructive and realistic solution that will involve government, employers and individuals taking responsibility for tackling a problem for society as a whole.
“However, business will be dismayed that such an important issue appears to be being overshadowed by disputes in Downing Street. At a time when companies are wrestling with their pensions problems on a daily basis, today’s debate should be focusing on how we tackle this issue, not about an impasse at the highest level of government.”
EEF’s proposals in its report ‘Re-thinking Pensions – Preparing for an Ageing Society’ closely resemble those of Lord Turner. In particular, EEF remains the only business organisation to support a form of compulsory pension contributions by both employers and employees in order to provide a level playing field and encourage a system of long term saving.
However, it recognises that there will be issues of concern for small firms and believes measures must be introduced as part of any reform package to ease the burden on these companies.
EEF also backs the so-called ‘soft’ compulsion proposed as part of the auto-enrolment scheme, as well as an enhanced basic state pension, believing this will reduce the need for means tested benefits and remove the disincentive for those on lower incomes to save for retirement.