Reform could lead to less retirement security
Proposed pension reform could result in state pensions being too low, forcing the elderly to claim means tested benefit, the Actuarial Profession claims.
In response to the recent government white paper on pension reform, the group expressed concerns that the introduction of defined contribution personal accounts could mean that some savers are adversely affected by fluctuations in investment returns.
Stewart Ritchie, president of the Faculty of Actuaries, said: "The degree of means-testing remains a major problem with the government's proposals.
"Auto-enrolment for many lower earners may simply mean that private pension replaces mean-tested pension and several million such employees may have little extra to show for the personal account contributions of themselves and their employers."
The group's reservations contrast with the backing of the government reforms recently given by the Investment Management Association, who described the changes as the "best deal" for all involved.
Scottish Widows commented that the plan was "significant improvement" but had reservations about practicalities.
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