PensionsJul 9 2014

Employers told to review company pension schemes

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Speaking at a Hargreaves Lansdown conference, the Liberal Democrat pensions minister said: “Workplace pension provision is something that employers should review on a regular basis, and of course they’ll have to as new standards come in.”

His warning came as Bristol-based firm Hargreaves Lansdown published research revealing that 80 per cent of firms had no plans to change their existing company pension scheme. despite the major overhaul of pension legislation announced in the Budget.

A HL spokesman said: “The recent pension reforms mark a profound shift in the pensions landscape and should prompt a review of default strategies, retirement communications and the cost of advisory services.

“Almost every company pension scheme in the land will have to make changes to accommodate the new rules. But at present most employers seem to be seriously under-estimating the practical effect of these reforms.”

Mr Webb’s comments followed warnings by Andy Bell, chief executive of AJ Bell, who said plans to mitigate potential tax avoidance opportunities offered by proposed pension freedoms were unlikely to meet the key features of being: proportionate, simple and sustainable.

He said: “The government may attempt to adapt current recycling rules to restrict the possibility of tax avoidance, but I suggest these are not robust enough to deal with the issue.

“One alternative would be a delay between paying a contribution and taking advantage of this new pension freedom.