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12/09/2005
TUC seeks 'compulsory' pension contributions
The TUC is to outline a blueprint for the future of pensions at the annual Congress being held this week in a proposal that will place an obligation on both employers and employees to contribute to a pension.
In addition, the TUC will call for an enhanced and indexed state pension to give everyone a firm foundation on which to build a second pension. This must give a fair deal to those - particularly women, carers and the very low paid - who miss out on current state pension arrangements, and greatly reduce the need for means testing.
The union body says that a revitalised state second pension should be shaped so that it particularly helps the low-paid build up an additional pension.
Calling for employers and employees to be compelled to contribute to a second pension either as part of the state second pension, an existing or new occupational pension or other arrangement, the TUC says that 15% of pay is required to build up a decent pension, that employers should contribute 10% and most employees should contribute 5%.
Launching the report at a press conference on the eve of the TUC's Brighton Congress, TUC General Secretary Brendan Barber said: "Credit is due to ministers for recognising our pensions problems and setting up the Pensions Commission, whose chair Adair Turner we will welcome on Wednesday. But only radical solutions can work, and ministers must start preparing the ground now for the big changes that are required.
"In particular they are going to have to take on the bulk of the employer lobby, and tell them that they cannot continue to walk away from their responsibility to contribute to pensions. Voluntarism - or even expensive incentives will not work - compulsion must be introduced."
The report recognises that this is a significant change and says that, as in Australia, the new contributions should be phased in.
The union says that pensions policy is too long term to be left to politicians alone and that a permanent Pensions Commission should be set up to run the system.
(SP/MB)
In addition, the TUC will call for an enhanced and indexed state pension to give everyone a firm foundation on which to build a second pension. This must give a fair deal to those - particularly women, carers and the very low paid - who miss out on current state pension arrangements, and greatly reduce the need for means testing.
The union body says that a revitalised state second pension should be shaped so that it particularly helps the low-paid build up an additional pension.
Calling for employers and employees to be compelled to contribute to a second pension either as part of the state second pension, an existing or new occupational pension or other arrangement, the TUC says that 15% of pay is required to build up a decent pension, that employers should contribute 10% and most employees should contribute 5%.
Launching the report at a press conference on the eve of the TUC's Brighton Congress, TUC General Secretary Brendan Barber said: "Credit is due to ministers for recognising our pensions problems and setting up the Pensions Commission, whose chair Adair Turner we will welcome on Wednesday. But only radical solutions can work, and ministers must start preparing the ground now for the big changes that are required.
"In particular they are going to have to take on the bulk of the employer lobby, and tell them that they cannot continue to walk away from their responsibility to contribute to pensions. Voluntarism - or even expensive incentives will not work - compulsion must be introduced."
The report recognises that this is a significant change and says that, as in Australia, the new contributions should be phased in.
The union says that pensions policy is too long term to be left to politicians alone and that a permanent Pensions Commission should be set up to run the system.
(SP/MB)
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Consultation On Pension Contribution Changes Published
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Consultation On Pension Contribution Changes Published
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