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Thursday, 20 June, 2002, 15:00 GMT 16:00 UK
Employers blamed for pensions 'crisis'
TUC conference
Unions, employers and government ministers met at the conference
Employers should be made to pay into workers' retirement plans, the TUC has said, warning that the pensions crisis represented a time bomb for the government.

TUC deputy general secretary Brendan Barber has blamed employers for the unease among Britons about provision for their retirement.

"I am afraid that the primary cause of the growing sense of pensions crisis is the collapse in employer commitment to pension provision," Mr Barber told a TUC pensions conference in London.

He urged government action to tackle an issue, which is "ticking away like transport did during Labour's first term" in office.

'High priority'

The TUC claimed public support for its stance, with a congress poll showing that four out of five people supported the idea of compulsory employer contributions to workers' pension plans.

Half of the 1,800 people surveyed said pensions were now a "high priority" for Britain.

"This poll shows just how concerned voters are at the employer retreat from providing quality pensions," Mr Barber said.

Inland Revenue figures show that In the 12 years to 2000, employers saved around �19bn ($28.3bn), by taking contributions holidays.

Red tape

Thursday's conference was also told of concerns about the levels of regulation burdening the sector.

Alan Pickering
Mr Pickering's report is due in the summer

Alan Pickering, a government pensions adviser who is working on a review of the pensions market, condemned the "layer upon layer of legislation" the sector has suffered.

"Each layer has been quite benign... but the accumulation has become quite toxic," Mr Pickering said.

The high level of red tape was "a turn-off for those already grappling within the system and... an even bigger turnoff for those thinking about stepping into the pensions world".

Much of the regulation was ill-focused, he added.

"The government should say what they want to happen and the private sector should get on and deliver."

Delayed retirement

Work and Pensions Secretary Andrew Smith, while rebuffing calls for a fundamental pensions shake-up, agreed that the current system could be simplified, and red tape cut.

Andrew Smith
Andrew Smith's first speech in his new job

But, giving his first speech since succeeding Alastair Darling, now Transport Secretary, Mr Smith focused on the potential for tackling the pensions gap by encouraging longer careers through "flexible retirement".

"We need to be able to provide real opportunities and incentives to enable people to stay in the workplace for longer - where they want to," Mr Smith said.

He also highlighted a need to remove "the perverse incentive to retire even when it might suit people to carry on working, perhaps part time, for longer".

Cautious welcome

Rodney Bickerstaffe, president of the National Pensioners Convention, gave Mr Smith a cautious welcome.

"I am pleased that the new secretary of state was at a conference where there were both pensioners and work partners," he said.

But he said that the government's stakeholder pension had probably "nudged" a lot of employers into closing their final salary schemes.

And echoing the TUC's call for compulsory pensions, said the government must make it compulsory for employers to contribute into their staff's pensions.

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News image Work and Pensions Secretary Andrew Smith MP
"The crucial thing is to get the framework right"

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17 Jun 02 | Business
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