Pensions: The choice is simple - or hard

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Pensions: The choice is simple - or hard

Thu 8th Feb 2007

Employers must choose between simple or more complicated pension schemes ahead of the government's 2012 introduction of Personal Accounts (PAs) and compulsory pension contributions, Legal & General has declared.

Adam Boulding, Legal & General's pensions strategy director made the announcement at a briefing that took place at Cass Business School at City University.

According to Debbie Harrison, senior visiting fellow at the pensions institute, the vast majority of firms will opt for the default fund and could be as many as 99 per cent - based on existing defined contribution schemes.

Mr Boulding said: "If employers want to keep pensions cheap and simple, then PAs will offer a very basic product at minimum cost. But if they would like to tailor a pension plan to suit their business and appeal to their target employee audience, then traditional pensions offer more attractive features."

Both Mr Boulding and Ms Harrison were instrumental figures in the Department for Works and Pensions' reform of pensions last summer and during the briefing they focused on addressing a range of issues relating specifically to personal accounts and default investment fund choices.

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