Tuesday 19th February 2008
The Pensions Regulator has warned of a likely rise in costs associated with revised longevity expectations in the near future.
Chief executive of the organisation Tony Hobman explains that any increase in the expenses encountered by employers would be likely to be passed on to employees.
His comments come as the Pensions Regulator has recommended an "evidence-based" approach to calculating mortality.
In light of increased life expectancy, this could mean some pensions providers anticipate having to pay out over a longer period of time.
But any such increase could be passed on to the pension holder in the form of raised administrative costs, Mr Hobman suggests.
"Scheme members living longer adds to the cost of pensions," he says, adding that it is only natural for this to be reflected in the way such schemes are funded.
The spokesperson adds that the recommendations follow "significant developments" in the industrys understanding of mortality and the observation of trends in longevity.
Shadow pensions secretary Chris Grayling recently warned that the pensions system is suffering from more than a decade of poor policy-setting by the government.
"The decisions made by the prime minister since 1997 have been the equivalent of a series of logs placed on the camels back," Mr Grayling asserted.
"No wonder the camels back broke."
He argued that the introduction of a means-tested approach to personal accounts could result in some of the countrys lowest paid workers opting out.
As a result, he said, future generations of Britons and upcoming governments could face "a much larger cost for means-tested benefits".
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