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Pension change could exclude graduates

Published: Friday, 16 May 2008   Category:

Plans to make UK companies recognise increased life expectancy levels in their pension schemes have been criticised.

Both the Confederation of British Industry (CBI) and National Association of Pension Funds (NAPF) have spoken out against rule changes proposed by the Pensions Regulator which would see pension trustees forced to raise the assumed lifespan of a working male from around 85 to 89.

Plans are aimed at combating potential fund shortfalls as pension-holders live longer, but critics are worried schemes may be closed to new entrants or even altogether as a result, restricting the ability of graduates to make financial provision for their retirement.

The CBI suggested that employers would be unhappy at having to inject extra cash into their funds, saying that while life expectancies were clearly increasing comma the scale of the trend was "no way as certain" as has been suggested.

Richard Lambert, CBI director general comma said firms were already taking action to protect pension funds, and the new regime would be "overly prescriptive".

Nigel Peaple, NAPF director of policy, claimed the scheme would unnecessarily add to trustee costs.

The Pensions Regulator, who claim to work to "improve confidence in work-based pensions by protecting members' benefits", announced further guidelines would be published in due course.

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