With the government continuing to look at ways to encourage workers to save for retirement, the question of early withdrawal of pension savings is back on the agenda

Nest Corporation’s chief executive Tim Jones reveals why he plans to usher in the new year with an overhaul on the terminology used to explain pensions to future members

This year is going to be really exciting – well, in pension terms at least. The launch of the National Employment Savings Trust (Nest) this spring, in the lead-up to the introduction of automatic enrolment in 2012, will herald a fundamental change in workplace pensions provision in the UK. Nest will give many organisations and their workers access to a low charge pension scheme for the first time.

It was back in 1978 when the then pensions minister Barbara Castle introduced the second-tier state pension, that she made the bold statement: “Let us take politics out of pensions.” – an admirable proposition if a somewhat futile hope.

Despite her words, it seems politicians cannot help but tamper with pensions and surrounding legislation. The reason for this, of course, is tax relief. In the endeavour to persuade individuals to save for their retirement, there has to be some incentive and tax relief has always been perceived as the simplest and most effective way of achieving this. However, tax relief in one area of the economy creates a tax burden elsewhere.

The government has made a botched job of presenting a change from Retail Prices Index (RPI) to Consumer Prices Index (CPI) as the basis of future indexation for inflation of certain state benefits, public sector pensions and statutory requirements for private-sector defined benefit (DB) pensions. By actively encouraging the reporting of this change as being mainly about homeownership costs, it has sewn suspicion in the minds of pension beneficiaries that this is just a money-saving stitch-up with no basis in fairness.

The not-so-subtle move from defined benefit (DB) schemes to defined contribution (DC)schemes is concentrating the minds of trustees and their advisers on their responsibilities to retiring members who have some or all of their pension entitlement built up under DC arrangements. This leads to the question of what responsibilities do trustees have for ensuring a retiring member obtains the best possible annuity rate?

A traditional annuity may be a good choice for those whose top priority is to generate a guaranteed income until death with minimal hassle. But what about the growing numbers who don’t fit into that pigeonhole?
These people tend to have two main criticisms. They only get the iron-clad income guarantee by agreeing to give up all control over the investments and income, and once in, they cannot escape, even if better opportunities come up later on.

Employers have the on-the-ground experience to create pensions policy, and should be an active part of the decision-making process, rather than it being left as political football

The RU64 rule was designed to ensure that advisers clearly document any decision to recommend a non-stakeholder plan, but this should not dissuade them from offering alternatives

While the industry and DWP endeavour to get people interested in pensions, legislation since A-day has created too many obstacles for the savings process to be simple

While pensions are still in the headlines, individuals and providers must work together to focus the UK workforce on saving now to retire in comfort in years to come

Longer life expectancies mean mortality risk is having an increasing impact on pension funding. But how great is the effect, and can the changes be measured accurately?

Trustees faced with making difficult portfolio decisions will need help and guidance if they choose to follow actuarial advice and invest more heavily in bonds

It appears some institutions have axed their environmental initiatives to cut costs, but responsible investing should be seen as more than just an optional extra