J. Kirkup and H. Watt
Daily Telegraph, May 31st 2011, p. 1 + 17
In a letter to the newspaper, David Pitt Watson of Hermes Fund Managers, has warned that Coalition government plans to automatically enrol workers in pension schemes will expose many to the danger of their money being invested in unsuitable funds that eat up much of their savings in fees. There will be no restrictions on the terms that can be offered by private providers of auto-enrolled pensions and history suggests that many employers will invest in schemes where 50% or more of potential pensions disappear in charges. There are also no restrictions on how the money can be invested, or adequate standards for records that providers keep. This leaves the system wide open to fraud.
Daily Telegraph, May 19th 2011, p. 6
The government is planning to increase the state pension age and equalise it at 66 for men and women by 2020, six years earlier than previously planned. Campaigners say that many women are therefore facing an unfairly sharp rise in their retirement age. At least 14 Liberal Democrat MPs are backing a campaign against the changes proposed in the Pensions Bill,
Department for Work and Pensions
London: TSO, 2011 (Cm 8053)
This paper details the Government's investigation into options for delivering a simpler and fairer state pension which rewards those who save for their retirement and is sustainable for future generations. The consultation is on two broad options for reform of the state pension, and the most appropriate mechanism for determining future changes to state pension age. The four guiding principles for pension reform are:
The Guardian, May 19th 2011, p. 14
Civil servants have voted to ballot on industrial action in protest against government's plans to cut jobs and change their pensions, paving the way for a 750,000-strong walk-out from schools, universities, courts and Whitehall in June 2011. The decision by the Public and Commercial Services Union (PCS) comes as talks set up to avoid strikes spreading across the public sector are threatening to grind to a halt, with ministers and unions failing to agree on even the basic starting point of negotiations.
The Times, May 31st 2011, p. 5
Local council staff face pay cuts of up to £9,000 as a result of the Chancellor's decision to raise pension contributions for six million public sector workers. Many are likely to leave the scheme if contributions rise too much especially as they are also having their pay frozen for two years.