Steve Webb challenges pension industry to provide ‘money-safe’ pension scheme

Steve Webb, the pensions minister, is addressing pension executives today and will be challenging them to provide a money-back guarantee to everyone who will be saving for their pensions through a new workplace defined contributions plan. This kind of scheme would ensure that people get back, as a minimum, the value of the contributions they have paid in.

This is one of several proposals which will be consulted on later in the year. Other ideas include collective risk sharing, which allows pension companies to pool their accounts and share the investment risk.

You can read the full article in the Financial Times here.

 

* Mary Reid is a contributing editor on Lib Dem Voice. She was a councillor in Kingston upon Thames and is a member of Federal Conference Committee.

Read more by or more about or .
This entry was posted in News.
Advert

7 Comments

  • Excuse my ignorance but is this adjusted for inflation?

  • The state must take responsibility for looking after citizens to old to earn their keep themselves with an income that rewards them for the contribution they have made to society during their active years. Private pensions are alright as a top-up – icing on the cake – but it is wrong to expect the nation to rely on private pension providers for a basic living pension because
    1) Pension providers like banks can go bankrupt and in-house employee schemes are open to embezzlement and misappropriation of funds
    2)Works pensions can tie the employee to the company for a lifetime restricting him/her like a slave denied a career opportunity with another firm
    3) The ups and downs of life can compel a n individual to abandon a pension policy and take a heavy loss with a “paid up” policy. Also policy holders have to sacrifice part of their contributions to salesman commissions and high portfolio management fees . In other words private pension providers are in the business for profit: the policyholder is their pawn

  • @ Mike C

    I think your infomation is out of date. your point 1 was very true until the at old Labour MP Robert Maxwell exposed how susceptable they were.

    These days there is a celar seperation fo company pension funds control and managment of businesses.

    On point 2 that is only if a pension is sufficiently generous to make moving to an equivolent remunerated job difficult as the employee recieves such a generous arnagement where they are.

    Point 3 would take more time to explain.

  • Barry Fleet 4th Jul '12 - 5:50pm

    re Mike C’s post, the information is so out of date and plain wrong !
    re point 1, there is the Policyholder Protection Scheme, the Financial Services Compensation Scheme and the Pensions Protection Fund to provide the necessary safety nets for insurer and company failures;
    re point 2, this is just not true. A much bigger problem is employees foolishly declining to join pension schemes and then not benefiting from employer contributions which is essentially declining a pay increase ! ;
    re point 3, charges and costs may be an issue and there is scope for improvement but no pension plan is worse than an over priced one particularly when so many don’t trust the State and think state pensions will be abolished by a future Government as unaffordable.

  • Nice to see people from the pensions industry on here defending themselves. If we could replace all the people working in the pensions industry who are paid to pick shares with monkeys, picking stocks at random and paid with bananas, we could reduce the current stupidly high overheads down to a sensible level and our pensions would be more valuable. That is the scandal of pensions. Experts sucking whacking percentages out of portfolios every year whether they are successful or not.

  • Richard Dean 5th Jul '12 - 10:44am

    Money grows only if it is invested. All investmens have risks, and the value of your investment can go down as well as up. Even if you employ monkeys! So it seems that the only way to make a money-safe scheme is to top up from today’s contributors if the investment income goes down too much.

  • In reply to my critics,
    Protection schemes are fine for the individual concerned but these schemes have to be funded and in a roundabout way it is the policyholders themselves who pay for their own compensation through a percentage of the premium creamed off to go into the compensation fund.In the event of fraud or bankruptcy everybody is a loser to a greater or lesser extent. Also there are ways of planning for retirement which do not come under the umbrella of these schemes,
    Incidentally if the state pension is scrapped, what do we do about the disabled and minimum wage low paid who cannot afford to go into a pension scheme: do we offer them euthanasia at 65 ?
    And I would dismiss the excuse “unaffordable” as justification for scrapping the state pension: if the mighty state has not got sufficient resources, who has. Or does unaffordable mean that governments facing re-election are scared of adding a few pennies to National Insurance or income tax?
    I believe that we take a big risk in trusting the “City” and its institutions: the present scandals confirm this: I prefer to put my trust in the state flawed as it may be. If the “City” lets me down I am impotent, if the state betrays me then as a political activist in a democracy I have a chance of doing something to correct the situation

Post a Comment

Lib Dem Voice welcomes comments from everyone but we ask you to be polite, to be on topic and to be who you say you are. You can read our comments policy in full here. Please respect it and all readers of the site.

If you are a member of the party, you can have the Lib Dem Logo appear next to your comments to show this. You must be registered for our forum and can then login on this public site with the same username and password.

To have your photo next to your comment please signup your email address with Gravatar.

Your email is never published. Required fields are marked *

*
*
Please complete the name of this site, Liberal Democrat ...?

Advert



Recent Comments

  • User AvatarRossMcL 17th Nov - 11:00pm
    @Yousouf "It’s very likely that she will lose her Westminster seat." Really? How do you know that Yousouf? Are you local to East Dunbartonshire? Do...
  • User AvatarPaul Barker 17th Nov - 10:34pm
    Its much too early to give up on our chances in this Election, the situation is highly unstable. The Government is currently more unpopular than...
  • User AvatarAshley 17th Nov - 10:04pm
    I’ve seen and heard gender and age used in these reports about us being excluded from the debates. Neither is relevant. What is relevant is...
  • User AvatarPeter Martin 17th Nov - 9:44pm
    I'm trying to make some sense of Jo Swinson's line in this election. The Lib Dems seem to be stuck at around 15%-16% of the...
  • User AvatarTim Hill 17th Nov - 9:10pm
    Yousuf - She'll hold her seat with a bigger majority. Nicholson, the SNP person who defeated her in 2015, is standing elsewhere. That says it...
  • User AvatarMike Read 17th Nov - 8:49pm
    I listened to Jo's LBC Iain Dale interview this morning. I thought she handled the questions really well.