Jan 29 2008
Personal accounts are "a big social experiment", according to pensions firm AEGON.
The company states that it welcomes the personal accounts delivery authority (PADA) announcement that a consultation will take place on the charging structure for the new pensions system.
AEGON asserts that it is "encouraging" to see a clear acceptance that a flat annual management charge is not the obvious starting point to fund the scheme.
Too much focus on such a charge structure and keeping charges low at the beginning could pass financial pressures on to consumers at a later date, the company believes.
"Personal accounts are a big social experiment and the charging structure must be resilient to potentially major differences between experience and assumption," the firm added.
Concluding, AEGON states that PADA must make its assumptions clear so that a proper debate on the matter can take place to avoid the need for tax-payer subsidies in the future.
AEGON states that it is one of the largest life insurance and pension companies in the world.
