The pensions timebomb – detonate or defuse
Pensions guru Dr Ros Altmann will deliver a keynote speech at Westminster Business School on Tuesday 23 November 2010. Dr Altmann’s Westminster Business School lecture – The Pensions Time Bomb – Detonate or Defuse? Will outline her vision of what must be done to combat the pensions’ crisis facing the UK.
Dr Altmann believes radical pension reform is needed and, because part of the solution must come from longer working lives, says age discrimination must be tackled, with employees given more help to stay in work longer. Without dramatic intervention the time bomb will explode, leaving a generation at risk of poverty, without pension provision, and increasing pressure on services and benefits. Dr Altmann also warns that if the pensions crisis is not tackled the UK will face an even greater financial catastrophe – in care funding.
The time bomb is ticking due to a number of factors. Demographic dangers are upon us, with the first baby boomers reaching 65 next year – a generation resistant to planning for the future but who live much longer than recent generations. Latest research reveals one third of over 50s have no pension provision. Company schemes are being closed and people are finding they get little or no pension from many pension funds. Measures coming from Brussels could increase the crisis with over-burdensome changes to investment backing for pension funds and annuities causing pension values to fall.
The coalition government is introducing the National Employment Savings Trust (NEST) but Dr Altmann does not believe this is enough She says: “We need radical state pension reform and social revolution to rethink our lives, with a re-evaluation of what ‘retirement’ should look like. Put simply, there needs to be more saving, and more working.” She continues: “So far the new government has expressed good intentions, now we need measures to back this up. As well as radical state pension reform there must be more help for the over 50s to stay in work (once they are out, they often stay out). In addition HR departments need to be encouraged to manage their older labour force better after the ending of the Default Retirement Age. This means having sensible discussions with older workers about perhaps shifting to part-time work, assessing them on the basis of their ability to do the job, not their chronological age.”
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