The Pensions and Lifetime Savings Association has outlined four priorities for workplace pensions for the next government to consider, in order to improve outcomes for savers.
In a policy manifesto for the up-coming general election on December 12, published today (November 7), the PLSA called for the new government to increase contributions, promote effective saver engagement with pensions, improve scheme governance, and introduce more options for consolidation.
Nigel Peaple, director of policy and research at the PLSA, said: “The Pension Schemes Bill must be reintroduced as soon as practicably possible.
"After that, and with the retirements of millions of people hanging in the balance, the next government cannot allow pensions to become a back-burner issue.
“Ensuring adequate contributions, fostering effective engagement and allowing well-run schemes to operate at appropriate scale provides the blueprint for making the greatest difference to the greatest number of savers.
“Together with the pensions industry, the government must seize this enormous opportunity to help more people achieve a better income in retirement.”
The PLSA wants to see auto-enrolment contributions increased to 12 per cent of salary by 2030, with a 50:50 split between employer and employee.
Currently the minimum contribution is 8 per cent, of which at least 3 per cent must be paid by the employer.
The PLSA also wants the lower earnings limit, which is £6,136 annually, £512.00 monthly, or £118.00 weekly for the 2019/20 tax year, to be abolished so that everyone who is employed is auto-enrolled.
The outgoing government was in the process of pushing through its the pensions bill, which has now been dropped ahead of the election.
The bill included rules for the development of pension dashboards so savers can see all their pensions in one place.
The PLSA urged the next government to continue to support this development and to further ensure the dashboard is non-commercial, has access to data, and protects consumer information, while also making sure that the state pension is included.
It also called for quick legislation to give The Pensions Regulator powers to take action sooner on reckless behaviour with defined benefit schemes.
Furthermore it wants the new government to take forward proposals for a new DB funding code so that TPR can set clear funding standards for schemes.
The code will aim to help trustees and employers agree funding outcomes for their schemes and better equip TPR to take enforcement action.
Finally the PLSA called for greater pension scheme consolidation and the acceleration of so-called “superfunds”.
The trade association said DB schemes should be allowed to enter into a superfund at a lower cost than insurance buyout to give employers greater flexibility while also protecting savers.
Chairman of the Work and Pensions select committee Frank Field has previously warned that the government risked a new pension scandal if legislation for defined benefit superfunds was not introduced.
He warned if a superfund came to existence tomorrow or next week, it would be based on a voluntary regulation process, paving the way for pension scams.